The small- to medium-sized business (SMB) space offers an outsize opportunity for B2B growth.
Despite the attractive white space, financial services, merchant services and vertical Software-as-a-Service (SaaS) organizations often need better, more effective help to reach SMBs efficiently and productively.
Today’s ongoing digitization provides an evergreen source of data-rich insights to help organizations frame up the right approach to qualify and convert leads with their sales and marketing programs while staying ahead of the competition.
“Targeting SMBs looks quite different from your standard B2B marketing or retail marketing strategies,” Charles Zhu, vice president of product at data intelligence platform Enigma, told PYMNTS.
The reason is that SMBs are extremely diverse in terms of size, making them their own unique animal, Zhu added.
“The revenue an SMB could be making might be $10,000, $100,000, $10 million or more,” he said. “The potential lifetime value varies so much, there’s no analogous situation in other types of [B2B] approaches. What if we told you one of the consumers in your pipeline was worth a thousand times the value of another?”
No two SMBs are the same, and Zhu explained that “sizing and prioritization” are critical to an effective B2SMB (business to SMB) strategy.
That’s because a foundational principle of business is understanding that not every organization out there is an ideal customer.
Beyond that, targeting an unmediated group of businesses introduces unnecessary risk. Within today’s tumultuous macroclimate, knowing who you are doing business with and how to ensure that the business relationship remains healthy and sustainable for the long term is more important than ever before.
“A lot of SMBs want and crave the kind of personal relationships that an enterprise might give them, paired at the same time with the type of turnkey, self-serve needs that a consumer might want,” he said, underscoring that while it might sound like a contradictory set of requests, if an organization gets it right for the SMB they’re targeting, they can “win very, very big.”
The secret sauce?
It’s striking the balance of a hands-off, hands-on relationship where the vendor is there to pick up on the first ring but also provides a product or service the SMB feels confident and comfortable in operating themselves with minimal setup out of the box.
To do that, businesses looking to optimize their B2SMB approach need to use data to make informed, accurate decisions around identifying potential customers with the greatest return on investment and the lowest risk.
At times, businesses inadvertently refrain from paying the appropriate amount of attention to the significance of accurately defining their target audience, jumping into campaigns without crafting an ideal customer profile (ICP), which is essential to building a successful growth strategy.
“A spray and pray tactic in today’s increasingly competitive financial service and merchant services landscape is a recipe for disaster,” Zhu said. “You’re essentially revealing that you haven’t differentiated yourself to tackle a market in any kind of way.”
“It’s not just looking at size or industry but looking at variables that may not be obvious at first until you have enough data to actually surface these niche in-roads and best-fit synergies,” Zhu added.
He explained that the data initially used to source a prospect may be out of date by the time the B2SMB approach kicks off.
“Being able to understand in real time what is relevant to your targeting strategy is critical for prioritization and defining your ideal customer profile,” Zhu said, adding that to have an optimized and predictive model of which SMBs may eventually be convertible is something that “you can only get if you have lots of data.”
That’s where the diversity of SMBs comes into play, he noted.
As for what the product leader is most excited about?
“Beyond the launch of our newest sales and marketing product, I’m really excited about all the companies being able to leverage data to offer better and more effectively underwritten credit solutions to SMBs, and giving SMBs that access to capital which has traditionally been so hard to come by for them,” Zhu said.
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