With so many B2B marketing products out there, why are so many marketing, sales and customer success teams unhappy with the options? We interviewed dozens of teams and found it came down to a single reason: most B2B offerings aren’t made for marketers targeting small-and-medium-sized (SMB) businesses.
SMB marketers have long been bucketed into general B2B marketing, or even consumer marketing. However, given the unique challenges of marketing to SMBs, we believe it deserves its own category: something we’ve describe as “B2SMB” sales and marketing.
That’s why Enigma recently launched a Sales and Marketing data platform for teams targeting SMBs. In this post, we’ll dive into three major challenges that have plagued B2SMB sales and marketing - a data challenge, a marketing challenge, and a business challenge - and how recent changes in the SMB ecosystem are enabling sales associates, customer success members, and marketers to meet these challenges.
SMBs are defined by diversity - in size, in industry, and in structure. Enigma clients targeting small businesses mentioned diversity in:
SMB marketers are faced with a dilemma: they have a strong need for data to help sort diverse SMBs, yet there is sparse intelligence on small businesses. Additionally, these teams can’t take a traditional enterprise approach (e.g., assign a rep to each individual lead and customize every deal), because there are so many small businesses.
A variety of tech trends have converged to make data on SMBs more dynamic and easier to collect. This data, in turn, has enabled financial services companies to segment the highly diverse SMB market. Data sources include:
Enigma Sales and Marketing sits at the intersection of web data, credit card data, and hundreds of additional private and public sources. Card data, in particular, makes understanding SMB size and health easier: McKinsey found that 82% of Americans used some form of digital payment in 2021, up significantly from 72% in 2016. As consumers use these payment types, businesses adapt to changing preferences. Industries that previously didn’t accept credit or debit card transactions – like construction or HVAC – now see increasing card penetration, while the share of cards is increasing within card-dominant industries.
SMB marketing costs are rising due to, traditionally, a heavy reliance on digital ad players. A Profitwell study found that costs of customer acquisition (CAC) increased 60-75% for B2C and B2B businesses from 2014 to 2019, for example.
At the same time as costs rise, marketers are paradoxically getting asked to grow with lower costs. In an August 2021 CMO survey, 59% and 45% of marketers said there was growing pressure to prove results from CEOs and CFOs, respectively. With ever decreasing ROI of the major digital ad platforms, marketers are searching for alternative means of acquiring leads.
In order to spend less for better results, marketers need to invest in direct sourcing of SMB leads. This includes both purchasing data, as well as investing in data driven tools to improve ROI, CAC, and program efficacy. Data that includes contact information, near-real-time revenues, buying intent, and industry granularity, can help marketers get ahead.
With this data, sales and marketing teams no longer need to be solely driven by referrals or web leads through high digital ad spend. Instead, they can instead optimize tactics and outreach.
Small and-medium-sized businesses (SMBs) – defined as independent businesses having fewer than 500 employees – represent a significant market, with approximately 33.2 million small businesses in the United States accounting for 99.9% of all businesses in the country. However, World Bank and the International Finance Corporation (IFC) estimate that there is about a $5.2 trillion global finance gap in what SMBs need versus the amount they are actually able to get through traditional loans.
The success of SMB-focused financial services has proven that seemingly small sections of the SMB market can represent giant market opportunities. Square, for example, has become a behemoth in card processing and payment facilitation due to its relentless focus on the smallest of merchants, i.e. so called “micro-merchants” earning less than a million a year. By making it free and painless to set up a card accepting terminal with nothing more than a mobile phone, Square became a 10B+ company.
Within SMBs, vertical SaaS has shown that industry-by-industry focus can build highly successful companies.
According to Fractal, more vertical SaaS companies went public in Q1 to Q3 of 2021 than in any prior year. From Toast in restaurants to Phorest in hair salons, many of these companies are targeting specific SMB verticals to serve unique needs from a seemingly small portion of the SMB economy.
In part, the growth of these SMB-focused platforms is due to growth in data surrounding SMBs that come from companies like Enigma. However, the open banking ecosystem, as well as data from card processing, has also helped enable merchant cash advances.
The number of successful financial services businesses serving SMBs has increased overall demand for partnerships. The expense of off-the-shelf SMB marketing has pushed financial services firms to search for new solutions. The explosion of available data has made a solution for sales and marketing teams targeting SMBs possible.
Enigma’s newest product – Sales and Marketing – is a comprehensive data platform to help you target, acquire, and up-sell SMBs in your ideal customer profile.