Retailers worldwide are looking to expand their market share, but many are so focused on traditional B2C retail that they overlook an entire section of their consumer base: businesses, especially SMBs. These companies represent enormous market potential for conventional
retailers looking to sell to business customers, according to Carlo Savino, executive director of North America eCommerce at Lenovo. This is partly because many SMBs already source supplies through legacy retail channels.
“Seventy-five percent of [SMBs we work with] actually buy PCs through retail,” Savino estimated. “About 10 percent of it owned by them through a channel partner and about 10 percent of them buy direct.”
So many SMBs rely on such retailers to provide their electronics that it is easy to see why B2C businesses are interested in selling to corporate customers. The question becomes, then, how can traditional B2C retailers looking to expand their services to a business audience capture this dynamic market segment?
PYMNTS interviewed Savino about his work with LenovoPRO, a multitiered program that provides SMBs with hardware and software solutionsas well as supporting services to optimize their IT capabilities . He also explained the complexities of making and receiving B2B payments, and how the program serves SMB customers’ unique payment and IT requirements. The answers appear to depend on the relationship.
Many SMBs often face similar logistical difficulties in B2B payments, but there is no one-size-fits-all B2B solution, Savino explained. The term “SMB” is a catchall, with a definition that can change depending upon who is using it, meaning it can be easy to forget how diverse SMBs actually are.
“The reality is there are hundreds of thousands of permutations of what might constitute a small business, and in each one of them has their own needs,” Savino said. “It’s [important] to serve everybody and understand what each individual customer is looking for right now.”
He cautions against assuming all SMBs have similar payment needs, however, because needs can change drastically between subsegments. Lenovo.com’s audience is largely composed of one to 150 seed-sized eCommerce merchants that typically use credit cards to pay for supplies they purchased from original equipment manufacturers (OEMs) like Lenovo.
“[American Express] represents a sizable portion of our pay mix for SMBs,” Savino says, along with Visa and Mastercard. He also explains that many SMBs express interest in using digital payment offerings, including mobile payments.
“Amazon payments and PayPal Express are . . . two other payment types that we offer,” he explains.
There is yet a third group of LenovoPRO members. According to Savino, some SMBs “don’t necessarily want to go put a purchase on a credit card, but are looking for very favorable terms to pay out over time or the ability to go take advantage of some of our frequent, exclusive low-interest types of offers for purchases on our website.”
He estimates that such offerings are used by as much as 99 percent of the LenovoPRO program’s SMBs. This is a radical departure from the payment methods commonly used among enterprises with more than 250 employees, which more commonly transact via legacy methods like paper checks and ACH. Retailers looking to capture this market segment would be advised to provide such options as opposed to credit-based solutions.
Rules of thumb like these can help traditional B2C retailers better tailor their services to their intended audiences’ needs and demands, but they are no match for the insights that can arise from open, honest communications between them and their clients.
Customization is a crucial component of doing business with SMBs, but impossible to achieve without communication. Retailers and clients that maintain open, honest dialogs about their commercial and infrastructural needs stand better chances of reaching payment terms that suit both parties.
Lenovo aims to accomplish this by providing a multitiered approach, Savino said. LenovoPRO members can access a wide array of payments products — including credit lines — as well as speak with online consultants who can advise them on information technology decisions. These consultants provide clients with real-time solutions to issues that arise in using or paying for Lenovo’s services.
High-tech solutions are not the only way to offer business services with a personal touch . All companies, regardless of size, are run by individuals, Savino explained, who must build strong, interpersonal relationships and be communicative about their payment and business needs.
“[My advice] is very simple and maybe even overly simple,” he said. “[I recommend that] B2B businesses [that] are trying to [target] B2B remember [those companies] are still made up of people . These are people who appreciate friendly, personalized, proper experiences and, quite frankly, the little things go a long way in speeding up onboarding. It is personal touches like these that can help retailers form stronger interpersonal relationships with the people [who] power these small businesses.”
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