5 Ways Selling SaaS To SMBs Is Different Than Enterprise Sales

November 10, 2016 Richard Bayston

Why sell to SMBs at all?

After all, everyone wants to hunt the big game and land big deals, and there’s no getting around the fact that an SMB deal will be smaller. Plus, there are plenty of small businesses that will be small forever or won’t even survive. They’re poor prospects for a recurring business model.

All those arguments are solid. But they also miss the point.

Almost half of American tech workers work in small businesses. SMBs account for 54% of US sales. And even where they’re just a single person, it’s a mistake to think of them as mom-and-pop outfits that aren’t interested in the future: SMBs account for 24% of new patents and their interest in, and reliance on, tech is growing.

Plenty of small businesses aren’t planning on staying small. In 1998, Google was running on $100,000 in seed money. Yes, the vast majority of SMBs aren’t destined for Google-like success. But SMBs are among the fastest growing businesses. If your offering scales well for the buyer, SMBs could represent a revenue source that grows itself.

SMBs are interested in tech because they know it can help them grow their business, even where they don’t know much about it. And they’re a valuable market to sell to.

But to succeed, sales needs to approach SMBs in a different way to the enterprise-appropriate methods we’re accustomed to.

Here are five key ways that you’ll need to sell differently if you’re selling to SMBs.
 

1. Address Different Pain Points

Survival, success and repeatable business processes are major SMB concerns.

SMBs care about different things than enterprise buyers. They’re facing different threats and seeking different rewards. That’s partly because they’re working with smaller budgets. But they’re also usually working to achieve enterprise-level business processes, rather than to work with those processes to achieve enterprise goals.

For SMBs, growth is a pain point. Where larger enterprises see growth as a strategic aim to be weighed against other strategic concerns, for an SMB, growth is the strategy. If they don’t grow, they won’t survive. The business owner who’s running the whole operation out of her personal bank account, or building on very limited financial support from family and friends, isn’t unusual. So growth is a personal pain point for these founder-CEOs.

The flipside of that is that they’re not constrained by a desire to be seen to be saving budget. Enterprise sales often stall when a group of decision makers and stakeholders can’t see the benefit clearly, but the cost is staring them in the face. When that happens, says Challenger Sale author Brent Adamson, enterprises often default to one basic behavior: “What's the one thing we can all agree on? ‘Well let's try to save the company a buck,’ right?”

Early-stage startups or SMBs struggling to grow to the next level are often caught between trying to keep their heads above water financially, and seeking the business process transformations that will propel them forward. So they’re actually less concerned with budget than larger organizations, and more likely to see spending on business process improvement as an investment. But the reward has to be apparent and relatively rapid.
 

2. Offer Different Business Benefits

Benefits that appeal to corporate or enterprise clients don’t always mean much to SMBs.

Many SMBs are seeking to get themselves into the position your enterprise clients are in already. Enterprises are often chiefly concerned with multi-year projects aimed at major leaps in market share or revenue, or at internal alterations to fit the changing business environment. SMBs are concerned with repeatability and profitability, and their benefits can’t come five years down the line. They need to show up a lot quicker than that.

That means your offering’s time to value and its benefits and features can be smaller and lighter. For SMBs, time to value is a dealbreaker. Corporate sales teams overwhelmingly use huge, powerful sales tools like Salesforce, which had over a thousand $1m customers in 2014. By comparison, around 34% of American businesses — all of them relatively small — are still using Windows XP. Why? Because they know how to use it. When the owner, CEO, office manager, IT staff and sales team are all the same person, anything that takes time and doesn’t pay right away is never going to make it to the top of the to-do list. So the benefits of your offering need to be presented to SMB customers in a way that shows how they can get value out of it right now.

Sales tools

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In a way, this is similar to the requirements of consumer facing products — time to value is a key metric for consumer mobile app designers, for example. But that value is subjective. SMB owners aren’t looking for pleasure and enjoyment (would you use XP if you were?) they’re looking for a step up in their business. Deliver that, without taking extra time, and they’re all ears.
 

3. Align With a Different Buyer Process

The buying process in SMBs is a lot shorter, less well-defined and less content-intensive.

The typical enterprise client has a well-defined buying process. You can mesh with it to create the best results. But many SMBs have no well-defined internal processes at all. That doesn’t mean they don’t have a process by which they buy, just that it’s unstructured. Instead of being defined by prearranged processes and access to diverse professional skills, it’s defined by personal trust.

The good news is that selling to SMBs can be far faster than selling to enterprises, and it offers a greater range of action for the salesperson. We’ve had to get used to an environment in which the majority of the buying journey — 60% to 80% — is complete before you get on board. Content takes the place of the educating sales person: 48% of enterprise-level business buyers will look at 2 to 5 pieces of content (they overwhelmingly prefer white papers) before making a purchase decision. By contrast, SMB buyers are less self-educating because they don’t have the time or professional capacity: most SMBs that offer mechanical services have a mechanic at the wheel, not a business graduate.

This has implications for digital and content: search and review sites are far more important for SMB sales than content — and social selling will often falter at the first hurdle, failing to locate any active profiles that are business-oriented. It also has implications for constructing a selling process for SMBs. If it’s to work it has to be adaptable, and combine being personal with being educative. It can’t assume pre-existing knowledge and it has to allow for a fast sales cycle.
 

4. Sell to Different Decision Makers

Decision makers are fewer in number, have more authority, and different concerns — because there’s little distance between them and the business.

Selling to enterprises in the age of consensus means that even when you’re near the wire with a prospect, you still have another 4.4 people to convince. They’ll be a mix of professionals at different levels in the company, different areas of expertise and with different concerns. Each of them has to be approached differently, and the benefits of your offering have to be explained in 5.4 different languages: a CIO sees something very different to an accountant or a CEO.

Selling to SMBs often involves a single decision maker. If you’re on the phone to Bob’s Flowers, the odds are good that the lone decision-maker will be Bob. And he might buy right now. There’s no-one to consult, and no ‘budget’ — he either has the money or he doesn’t. If he does and he thinks your offering might work out for him, he’ll tell you so. (If he doesn’t he’ll likely tell you that too. Expect hard nos or yesses in the SMB sale.) 98% of tech purchase decisions in SMBs are made by the CEO. The other 2% are delegated to someone the owner/CEO trusts. Whoever you have on the phone is either taking a message, or they’re the buyer.
 

5. Do More With Less

There are fewer prospecting tools and a lot less data available, and it’s in different places.

Favorite prospecting tools and methods are going to leave you dead in the water for SMB sales if you rely on them to work like they would for enterprise sales. SMB buyers often aren’t even on the same networks, because they don’t see the benefit. They’re on Facebook (58%), Twitter (30%), and Google Plus (19%); and they’re on review sites like Yelp (14%). Are they on LinkedIn? Nope: only 9% are on ‘other’ social networks at all, and 29% are on none.

So, how do you prospect and contact SMB buyers?

By going back to the basics. Email and phone calls.

Looking for an email address? A Whois search on their website often reveals the name and email address of the owner. Phone calls can be the best first approach, unlike when you’re dealing with enterprise buyers who live in their inbox.

Looking for information on the business owner? Consider checking out the review sites and forums that SMB owners and CEOs use to judge each other. Learn what you can about priorities, attitudes, knowledge and temperament from forum posts and comments.

When it comes to the later stages of the sale, it’s important to remember that SMBs need personal nurturing. These sales are often multi-touch because they’re about personal trust and making it to the top of the to-do list. So be persistent and offer value. Remember that SMB owner/CEOs often have little time and little knowledge outside of what they do, so offer collateral that’s digestible and upfront but educational.
 

Conclusion

SMBs require a different approach, one that reflects the priorities of SMB owners and CEOs. They’re chiefly concerned with stability and profitability and often have little business or tech knowledge. But they’re ready to spend if they can see the benefits, and sales cycles are short and relatively simple: nurturing in the lead stage may require persistence but few SMB sales fall through because of an unexpected objection from the CIO or a budget reallocation. SMBs aren’t just enterprises, but smaller. You’ll find different requirements, structures and processes. However, if you can approach them the right way, SMBs can represent a valuable source of sales and revenue.

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