Serving small businesses can’t be a side project
Last Friday, I spent part of a sunny afternoon on the patio of Delancey’s Crossroads Café, chatting over coffee and tea with Randy Almond, Yola’s VP of Marketing. Yola, which recently rebranded (from Synthasite) and relaunched at this year’s Web 2.0 Expo, has developed a killer drag-and-drop browser-based platform for small businesses to develop their own websites and blogs. I’ve tried it out, and it’s a superior product.
Yola’s still working on positioning itself as a small business specialist, but its potential seems awesome. They currently operate a “freemium” business model, charging nothing for the product and the hosting (which is also free of ads), but cross-selling custom domains and SEM to their users. More importantly, as Yola ramps up its user base, it’ll have the relationships with customers to further cross-sell online services, especially when they want to bring e-commerce or apps to their sites.
As I learned in my years developing small business products at Wells Fargo, SMB’s needs are wildly different from those of consumers or large enterprises. “No-duh,” you’re thinking. But I’ve come to be unsurprised whenever I meet someone struggling to market services to SMB, simply because they don’t understand how their customers operate and why they buy.
A couple months ago, I met with two sales executives at Network Solutions in Virginia. Like Yola, NetSol also positions itself as a SMB-focused service company, a market niche made necessary by losing its domain registration monopoly in the late ’90s. (The reg business, 90% of their revenues just six years ago, is now just 45%.) NetSol successfully figured out that the vast majority of SMBs are very small indeed, and that domain registration is just the first handshake in what can be a broad service relationship. Broading this relationship, however, requires NetSol to cross-sell and service the customer effectively and respectfully. But it took much of this decade for Network Solutions to get the formula right.
Meanwhile, all types of SMBs are trying to figure out how to leverage online tools and platforms to drive customer acquisition. SEM and SEO are king and queen of this realm, but they’re relatively new and utterly confusing to most SMB managers. If Clickable’s research is accurate, it’s unsurprising that only 50% of Google self-service advertisers return the next year. But think of all the opportunity Google has to turn that around by making their platform and corollary services ever more SMB-oriented.
Yelp is another site that’s potentially awesome (or disastrous) for SMB. Just two weeks ago, I got my hair cut at Spargo in downtown SF, based on Yelp’s wildly positive recommendations. When I told my haircutter that Yelp brought me there, she seemed about as surprised as she did when I admitted I’d never had a manicure. Yelp relies on a community of consumers to build support for a business, but also permits a business like Spargo to augment its presence with pictures and even a “June Caveman Special.” (Yelp has unfortunately also taken heat from business owners who claim that buying advertising will get you special treatment, like deleting disputed reviews.)
So what do small businesses want? While a one-person plumbing operation and a 35-employee web services company may seem to have little in common (and any company wishing to serve both should have a segmentation strategy), small business owners have some broad things in common. They want:
- to be respected. Small business owners have neither time nor money to waste. As a Twitter evangelist learned the hard way in a San Francisco Small Business Week event two weeks ago, SMB managers want to understand, decide, and move on. They do not want to be told to “play around with it.” They’ve don’t have the bandwidth to fiddle; they’ve got to make payroll this week.
- to be served NOW. When they have a problem with you, they need a solution. Now. And on their schedule, which is often not regular business hours. Business owners often spend business hours working in the business, and off-hours working on the business.
- numbers. Small businesses have books to balance, and scarce capital to monitor. If they’re not getting a positive ROI on something, they’ll probably bail and focus elsewhere.
- help. Small businesses are burdened with demands — cash flow, health care costs, red tape, complicated tax laws, hiring and keeping the best people, and finding and keeping their customers. They seek value and simplicity to balance this all. Can you improve the bottom line and make things easier? You win.
- to be a part of something. Business owners are the rock pillars of many communities, physical and virtual. They see themselves as the leaders upon whom this great country depends. They are generally pro-market and pro-freedom, but they believe in collective action to improve conditions for everyone. Are you a part of their communities, too?
SMB is the engine of America’s economy, responsible for more than 90% of private sector employment. Like America’s population, they’re diversifying rapidly, but some things remain the same. Including this: Your business can’t serve SMB as a side project. It requires understanding, focus, the right products, and unequivocable value.