Cater to Small Businesses’ Total Needs

American small businesses generate the third-largest economy in the world, behind only the United States and Japan, and businesses with fewer than 10 employees represent 85 percent of the market.

The problem marketers face is that the small-business market is fragmented across hundreds of industries and multiple geographies. The challenge for marketers is to create a strategy that will resonate equally well with the small bicycle retailer in Ohio and the growing computer consulting firm in Georgia.

The key commonality of all small businesses. Despite the fragmentation challenge, there are commonalties in all small businesses that can be leveraged. A 1999 study by Dun & Bradstreet on the small-business market found that the top 10 challenges faced by small business are management-related and include employee management, operations, finances and sales. Most small-business owners and managers wear multiple hats and simply lack the fundamental business management skills, information and staff. An example is the engineering consultant suddenly in the position of hiring, selling and negotiating. Historically, recognizing and appreciating management need is a key element in developing profitable relationships in this segment.

The traditional marketing approach to small business is flawed. Marketers have had reasonable success marketing to the midmarket (companies with 500-10,000 employees) because they are essentially mirrors of a large corporation. Midmarket companies have buyers who are well-versed in market research, possess departmental structures with specific buying responsibilities and follow well-documented purchasing cycles. They have a defined product need. For example, a Fortune 500 courier firm can maintain a dialogue with its target buyer, the head shipper of a manufacturing company. The shipper has a “product need” because he simply fulfills a continuing purchase cycle over an extremely narrow range of responsibilities. As a marketer, targeting the midmarket firms is relatively simple.

Marketers make the fatal assumption that a small business can be approached in the same product-need way. Thus, the courier sends the same newsletter to the small-business owner/manager. Not only does it fail to register with the recipients because they are preoccupied with managing dozens of issues other than shipping, but it also risks alienating the business owner because the communication does not coincide with his needs. In wearing many hats, the business owner/manager faces a number of management responsibilities across a variety of functions, best described as “total need.” Examples include employee training, communication strategies, selling, project management, finance, technology and dozens of other key challenges.

How to use a total-needs approach to engage small business. Small businesses engage in more than 50 different management processes. The Web provides the rich medium for building a total-need relationship with prospects and customers based on their management needs. Helping deliver support information to address these key management issues helps demonstrate that you understand their wide range of needs. If a corporation could address this fundamental and total need of small businesses, it would instantly have relevancy to the many management issues the small-business owner is facing and thus the ability to begin a compelling dialogue to create need.

Meeting total need begins a powerful marketing process. Offering this type of support has powerful marketing implications. A regional telephone company could be a convenient source of management support information across dozens of management topics through its Web site. A customer using information on conducting interviews, employee motivation or regional hiring regulations could be inferred to be very likely to grow because hiring of employees is a key indicator of growth. This sets the stage for true one-to-one customization because growth-related products can be offered in the context of growing the staff. The total-need approach is about letting customers express their needs naturally rather than bothering them to fill in customer surveys, which are proven to be completed inaccurately.

How to use the total-need approach. Using the total-need approach means an integrated marketing approach involving these key elements:

• An engaging customer-centric approach. Become the conduit for key management information critically needed by your resource-challenged small-business prospects. This will allow you to begin a dialogue outside your limited product set and help you prove that you understand your small-business prospect’s true needs.

• Gather customer intelligence – intelligently. Ensure your approach has the capability to enable you to gather intelligence on the actual needs of small-business customers. Which ones need time-saving solutions? Which ones want to save money? Which ones are owned by a female? Which have an affinity for technology? Which ones are growing rapidly? Each of these answers can be a key determinant of their future product needs. Rather than relying on product transaction history to determine who is a valuable customer, you can begin to segment based on actual need.

• Leverage marketing capabilities. Your small-business marketing portal provides you with an instantly credible platform to create a direct-to-desktop marketing channel integrating your offers, products or newsletters. Enhancements to assist this effort can include live customer service, direct e-mail campaigns and viral marketing capabilities enabling customers to their colleagues. Your channel members can also participate by offering support to their customers.

• Deliver total need under your brand. Delivering a credible offering to small businesses is your chance to build your own brand equity. Avoid third-party partners who want access to your customers. For example, several well-intentioned marketers have partnered with dot-com companies who offer free small-business content, tools or applications under their dot-com brand. Dot-com companies have no vested interest in helping a marketer understand their market segment and increase its value. They only seek customers for their own fledging sites.

David Ceolin is the CEO of Digital Cement, a provider of corporate marketing portals based in Westboro, MA.

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