Small businesses represent 99.7% of all employer firms and create more than half of the nonfarm private gross domestic product in the US, according to the US Small Business Administration. Firms with fewer than 500 employees accounted for 64% — or 14.5 million — of the 22.5 million net new jobs (gains minus losses) created between 1993 and the third quarter of 2008, according to the SBA.
“Over half of our customers are small businesses,” says Christine Martin, senior director of customer marketing and strategy at Pitney Bowes. “They generate a significant portion of our revenue. I’m sure it’s the same for many large companies. So, they represent a big opportunity. We pay attention to them, and I think others should as well.”
Despite financial struggles over the past year, nearly three-quarters (73%) of small business owners say they are optimistic about the future of their companies, according to a survey commissioned by Pitney Bowes and conducted by International Communications Research. The study polled 504 small businesses about their financial state and outlook for this year.
The survey also revealed insights that will help brands more effectively market to this important business-to-business segment. DMNews talked with Martin about her company’s research and how to market to small businesses.
A personalized approach is very important. Small businesses focus on their customers, so they expect to be treated with the same level of care, service and respect. “We’ve found in the research, but also in our experience, that in marketing to small businesses, the more you know about them and their needs and personalize the message to them, the more successful you’ll be in marketing,” says Martin.
Keep the message clear and concise. “[Small business owners] wear many hats. An owner can also be doing the payroll, talking to customers, and doing everything else themselves, so you need to be very brief and clear and to the point,” advises Martin. “Cutting through the clutter with a message that’s easy for them to understand the value in is very important when you market to them.”
Make it easy for small business owners to respond. Martin also recommends making it easy for small business owners to respond to marketing, including offering several response channels, including telephone, web, fax and mail. “Offer as many options as possible because they’re business. You’ll get more responses and your marketing will be more effective,” she adds.
Tie products and services to pain points of small businesses. The economy is a critical factor for small businesses of all sizes. Pitney Bowes’ research showed that some of the top financial stressors for small business owners in today’s economy include: decreased sales (74%), healthcare costs (52%), late payments from customers (42%) and greater restrictions on financing (42%). Many small business owners say they are very worried about cash flow. “If a company has a solution for one of those, people are going to be very interested in hearing about it,” Martin says.
Promote creative solutions. When approaching small business, think creatively and with an open mind. Smaller companies have more flexibility than larger companies. “Small businesses who want to do business with other small businesses have the opportunity to do things like bartering arrangements, for instance,” says Martin. “Larger companies can offer [small businesses] ways to reduce work hours, or new technologies that improve their business. Or they can provide ways to be more efficient with the people they have on board.”
Keep messaging positive. Pitney Bowes’ research revealed the resiliency of entrepreneurs and their commitment to stay in business for the long haul. Even if forced to close, 28% of small business owners said they would start a new business. “They’re doing more things to get through this difficult time. They’re looking for ways to make it through this economy,” says Martin. “They’re not thinking, ‘I give up.’”
