Tricks for Selling Tech to SMBs

Technology companies would do a much better job of selling their services to small businesses if they would keep things simple and treat SMBs more like consumers.

This is one of the leading insights from a recent article on selling tech to SMBs by the consulting firm AT Kearney. The article mirrors much of what we have written on this blog, based on our conversations with small businesses, product and marketing professionals, sales leaders and others in SMB SaaS, and validated by our Modern Commerce Monitor™️ research. The article also pokes holes in some popular strategies like selling through channel partners and pursuing a vertical market focus.

To establish their bona fides, the article’s five credited authors note that among them, they have sold more than 2 million tech products to SMBs over the past 15 years. Among the authors is Ben T. Smith, the MerchantCircle co-founder who is now a senior AT Kearney partner.

Noting that 80% of the estimated 30 million U.S. SMBs are sole proprietors and most with fewer than three employees, the authors contend that a feature-driven approach that might work on an enterprise buyer will fail miserably at the smaller end of the SMB market.

“These time-strapped entrepreneurs are not likely to be experts in your product—and they don’t want to be. They’re busy trying to be the best plumbers, lawyers, or florists that they can be, and they don’t care much about the number of widgets your product provides,” the authors argue. “In our experience, the more features or choices you offer a small business, the less likely the sale.”

We heard very similar messages directly from small business operators at our June Engage event in Washington, D.C.

We found similar insights in the MCM around complexity suppressing product engagement among SMBs (see chart below). Both insights draw from the same reality — that SMBs are time-starved and equate complexity with additional work. If you can make the case that they can make more sales, retain more customers, generate more insights from their customer data without falling down the rabbit hole of a steep product learning curve, then you might get their attention.

Source: Modern Commerce Monitor™️(2019)

The article makes several other recommendations, including:

  • Reduce Friction by Removing Choices. Making the purchase process fast and simple will boost sales. The fewer the steps to complete the purchase and the easier the payment process the better.
  • Deliver Value Quickly. Easier said than done, but if your product doesn’t deliver clear value within the first 90 days of subscription sale, churn is likely.
  • Use AI to Acquire at Scale. SMB sales is a volume game and the authors argue it’s hard to scale via channel partnerships. The advocate for an “AI-infused approach can prioritize where more personalized higher-cost sales efforts should be made and when to capitalize on the ‘discovery period’ that offers increased opportunity.”

As noted, the article takes aim at two common go to market approaches is SMB software — vertical product focus and scaling via channel partnerships.

“Although tech companies can succeed by focusing on a small-business niche (for example, dentists), growth will slow at some point unless you take your product to a broader market (such as healthcare).”

Regarding scaling via channels (vs direct sales), the authors say only, “Because it’s rare that small-business channel acquisition strategies work at scale (for example, selling through chambers of commerce or through a brokerage), assume you will be selling direct to the business owner.”

Do you agree with these recommendations? Share your comments below. We encourage you to read the full article as well.

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