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SMB Panel: The Demand for Service and the Problem of Scale

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After another successful SMB digital marketing bootcamp yesterday at Yelp’s San Francisco office, we kicked off the Tech Adoption Summit, which continues today, with a presentation of new data on small business technology adoption. That was followed by a panel discussion of small business owners.

The panel included the owner of a multiple office dental practice, the owner of a 39-person termite control company, a plumber, a mortgage broker and an executive from a small but rapidly growing accounting firm. It was a great cross-section of business owners. With the exception of the plumber these were relatively sophisticated businesses that had multiple employees.

SMBs

The panelists were asked about a number of issues, among them:

  • Their adoption of software to help run their businesses
  • Their use of cloud tools
  • Their interactions with sales representatives and their likes and dislikes about those encounters
  • Their use of marketing services and what they’re looking for in a provider
  • Their criteria for making buying decisions
  • Their price sensitivity

Business Owners Using Multiple Tools

All of these businesses were using digital marketing, desktop and cloud software. Most complained of the lack of integration of all these tools and systems. The business owner with the most straightforward situation was the plumber, who was simply buying leads from HomeAdvisor, AngiesList (now part of HomeAdvisor), Thumbtack and Yelp. Asked which one(s) performed the best, he cited Thumbtack and then Yelp.

It would have been valuable for every reader of this post to have been in the room. There were no truly unexpected revelations or “findings,” however the color and nuance that came out in the discussion were instructive.

We asked whether they recognized themselves in the Tech Adoption data slides that had come before the panel. Mostly they said “yes,” though there were some disagreements with the aggregate SMB data. For example, none of them saw their IT support reps as their desired “go-to” marketing people.

Frustrated with Unprepared Sales Reps

One consistent message that these business owners conveyed is that they encounter sales reps (whether software or marketing services) that don’t really know their businesses. The pitches they generally hear are generic and not sufficiently personalized to interest them.

Another complaint, related to the above, was generally poor customer service and follow-up on “day 2,” after the sale.

There was a lot of talk about “ROI.” These business owners said that as long as they were seeing a return they didn’t mind paying for services. One of the business owners ways paying more than $60,000 per year on marketing. However, in many cases they weren’t seeing sufficient ROI to continue working with their marketing providers. They were not unsophisticated about ROI calculations and the value of a lead.

One particularly detailed and scathing discussion involved a well-known web hosting and marketing company. The business owner said that she was paying in excess of $2,000 per month and seeing “two or three” poor quality leads. She cancelled after three months — the most common time frame for SMB churn. She received mostly perfunctory service from the provider it sounded like.

They Don’t Just Copy Their Competitors

Another interesting point that came out involved competition. It’s often assumed that SMBs are going to simply ape their competitors or will be motivated to act if they see a competitor is doing something. The panelists said that these types of considerations were a factor but not a decisive one in their decision-making about whom to work with and the tactics to adopt.

The challenge facing marketing providers and SMB SaaS companies to some degree is a structural one. These business owners wanted considerable attention from knowledgeable sales and customer service reps. — they wanted a relationship.

They were willing to do self-service but to varying degrees would prefer to work with a partner. In most cases they recognized that they weren’t going to develop the expertise to market themselves effectively across channels.

Problem: How to Deliver Good Service at Scale

The desired scenarios that they described are mostly not scalable from a provider standpoint. Also, because the vendors didn’t really know these businesses well enough, they weren’t doing a great job, for example, with paid-search fulfillment. They were likely using templated approaches that weren’t specific or “personalized” enough.

Increasingly sophisticated technology and “AI” might be able to close the gap through:

  • Better segmentation and targeting of businesses (being done unevenly)
  • More up-front preparation and knowledge of the business  (this is available today but under-utilized)
  • Improved fulfillment and budget allocation

The thing that technology and tools can’t do is substitute for human relationships. All these businesses wanted better service. They also wanted a partner that understood them and was committed to their success.

2 Responses to “SMB Panel: The Demand for Service and the Problem of Scale”

  1. Puli Kiran says:

    Useful insights Mr.Greg. Recently I started reading your blog posts & I was very impressed with your posts and I am learning new things from your survey.

  2. Greg Sterling says:

    Thanks

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