There are currently 33.2 million small businesses in the United States. That’s an impressive statistic as is, but even more so then you learn that small businesses make up 99.9% of all businesses in the USA. This means that no matter their industry, business owners need to have the SMB sector on their radar.
While many sales teams prioritize enterprise accounts for a variety of reasons, the SMB sector is just too big to ignore.
Today, we're going to show you everything sales professionals need to know about SMB sales.
SMB sales is an act of selling to small and mid-sized businesses.
By definition, small to mid-sized businesses are companies with under 1,000 employees and less than $1 billion in annual revenue. Small businesses typically have under 100 employees and a revenue of $1-40 million USD.
As opposed to enterprise sales, selling to SMBs has its own unique benefits and challenges. Some of these companies are fairly new or only operate locally, so they have different needs and requirements compared to enterprise buyers.
Based on the sheer number of SMBs, creating a sales strategy for these businesses can significantly boost your revenue. Let's see some pros of selling to SMBs compared to enterprise organizations.
While there are some downsides to selling to small and mid-sized companies, there are plenty of pros to this business sales model.
Fewer employees also means fewer business leaders in charge of purchasing decisions. While larger companies can take months (and sometimes years) to travel from first contact to purchase, SMBs usually close within weeks.
This means that despite the smaller average deal size, your sales reps can close more SMB deals in less time. With a shorter customer journey you can come up with more effective sales strategies for turning leads into customers.
Selling to enterprise customers means you have a much smaller segment of businesses to target. This gets even smaller once you whittle it down to companies that actually need the product or service you're selling.
On the other hand, SMBs make up almost the entire market (as mentioned, 99.9% of companies in the USA) creating a much larger pool of potential leads. Finding companies that fit your ideal customer profile is going to be much easier and as a result, you'll see your sales velocity improve.
Every business wants to grow, this applies to both enterprises and SMBs. Small to midsize businesses however have more opportunity to expand their services and grow quickly which can mean massive opportunities for you as their provider.
When your customers grow, so does your recurring revenue. These long term relationships can help in other ways too: you can use them as social proof for your outbound channels and evidence of your company’s effectiveness.
Communication is much easier when working with SMBs. You can get in touch with decision makers in these companies and ask them to recommend you to other businesses in their area or industry.
SMBs are usually very well connected within their industry. So a recommendation from a key business decision maker can hold a lot of weight.
The SMB sales process is not ideal, especially if you're used to selling to enterprise audiences. These challenges can definitely hinder your sales efforts which is why it’s good to be aware of them.
You'll need a specific sales strategy when selling to small and midsize businesses. SMBs value every dollar they spend or invest so cross-selling or upselling these customers can turn into a real challenge.
And even though the decision making process is shorter, you'll find yourself running into walls often because of price complaints and other common sales objections. There are lucrative customers in the SMB segment, but you have to determine if their business model supports your prices.
The great thing about enterprise sales is that the deal sizes are much bigger. If a sales rep closes an account with a $20,000 sale, that means a hefty commission. In SMB sales, the average deal size is much smaller, which can hinder your business growth.
As a result, you have to amp up the volume of closed sales, which can lead to burnout in your sales team.
You may need to alter your sales approach, otherwise, your reps may end up chasing a massive number of sales to boost their commission. It is difficult to create great sales pipelines if you don't consider all the variables like: the buying cycle, the average deal size, the pricing model you use and more.
A potential customer in the SMB segment is cautious with every single dollar they spend. This means that they will shop around, compare you against your competitors, ask for discounts, and in general, make your sales activities harder.
On the positive it allows you to find out potential pain points that your customers face.
You don't have to wait till you arrange a call or face to face meeting to address these objections. Instead you can cover them in your blog articles, customer testimonials and other content materials.
There certainly are some challenges in selling to SMBs, but it's nothing that proper preparation, organization and hard work can’t overcome. Here are some of the best tips for selling to small and mid-sized businesses.
How many of your potential leads match your ideal customer profile? Given the sheer volume of possible prospects, you need to be very strict about who you're trying to sell to. This can be accomplished by using a lead qualification process.
Any good CRM will have this feature. It allows you to set certain criteria to qualify and grade your leads based on them. For example:
- the location of the business
- number of employees
- industry and niche
This allows your sales reps to prioritize and spend time on those customers who are the most likely to purchase. It also helps to make the buying experience more effective for them.
This also allows for flexible personalization. As the reps open up the CRM, they'll know what kind of approach to use to reach customers. By combining your CRM with emails, you can do effective personalization at scale for your outreach channels.
With enterprise sales, you'll talk to a dedicated person in charge of your area of expertise, things are a bit different in SMB. There are fewer key business decision makers in SMBs, and often, you'll be talking to the CMO or a manager that does not know much about the product you're selling.
This means that you should tone down the jargon and try to explain the problem in terms that they can understand.
Here's an example: you're trying to sell project management software. Instead of talking about Kanban boards, time tracking capabilities, issue tracking, real-time computing, dependencies, and other terms, think about the benefits they need.
Instead tell them that PM software allows them to see what each employee is doing at any point in time. They can get an overview of entire company operations and see what is stuck, where it is stuck and why.
It may sound oversimplified, but the principle remains the same. Make the purchase process easy by speaking the SMB customers' language. You can create different types of sales content and train your entire sales team to speak on the level of the customer.
For larger organizations, forking out thousands of dollars at a time is not an issue. However, small and medium businesses will often object to the price of your products and services. With these types of customers, you can set their mind at ease by providing special conditions for them. Some examples include:
- Offering discounts for purchasing annual plans if it's an ideal company for your business
- Giving special business contracts that allow them to pay per month rather than paying for a year upfront
- Offering extended free trials for the best inbound leads
- Throwing in a bonus such as an extra month of service or the help of a dedicated account manager who can be there to set things up
- Segmenting your cold leads to with sales acceleration tools to attract a higher percentage of customers from the start
The more you sell, the more you'll become familiar with your specific B2B sales process. You'll learn what matters to your customers and how to adjust the offer and sweeten the deal to increase their customer lifetime value.
Use this approach everywhere, from cold sales emails to the scripts your sales representatives use.
Enterprise customers have entire teams that are dedicated to implementing the tools and products they purchase. For example, someone purchasing an email marketing tool likely have a dedicated email marketing manager if their team is large enough.
On the other hand, a small business has one or two people wearing multiple hats. They won't have time to go through complex onboarding and product setup. In fact, they'd probably like to purchase and start getting value from the tool or product the very same day.
Make it easy for them to achieve their business objectives by simplifying the way your tool is used. Focus on creating super easy onboarding and perhaps assisting the customer to help them overcome their business challenges in days, rather than weeks or months.
B2B customers are used to a more complex sales process. They need to be wooed and convinced that the solution is right for them. Enterprise companies specifically receive free trials, demos, conversations, lead magnets, white papers, ebooks and more. Things are a bit different for SMBs, but you can still build a scalable selling process.
Show the value of your product or service at the very beginning of your process, then immediately address their pain points. The simpler the pitch, the higher your chances of success. Remember that if you're talking to the CEO of a small business, they won't have time to sit through 15 meetings and demos so a standard sales template does not apply.
Small and medium-sized businesses present a huge opportunity for every business especially in the B2B sector. So if you adapt your sales processes to these audiences, you stand a chance of massively growing your potential revenue.
It all starts with building relationships, and this is where a great CRM tool can help. Make it easier for your sales and marketing teams to align themselves and track who you're selling to, when and how. Personalize the buying process and make it easier for both your sales team and your customers.
Sounds like a dream come true? Try Capsule CRM free for 14 days and we'll show you how to make the most of your customer interactions.