Advertising Small Businesses Market Research

Think small: five mistakes big businesses make when dealing with SMEs

By James Wood | head of Earnest Labs



The Drum Network article

This content is produced by The Drum Network, a paid-for membership club for CEOs and their agencies who want to share their expertise and grow their business.

Find out more

December 5, 2017 | 6 min read

The small business market is, in fact, rather large. Over 99% of all businesses in the EU are classed as SMEs (small-to-medium-sized enterprises) and in the UK alone their combined revenue is around £1.8 trillion. (Source: Eurostat)

Small businesses

Clearly selling to small businesses is a huge deal for big businesses, and many are savvy to the opportunity. 70% of marketers have said they believe the SME market is extremely important to their business and 38% have said they are looking to aggressively boost their SME marketing investments. (Source: CEB)

But there’s a problem

Despite the size of the prize, a staggering 90% of brands struggle to identify and connect with small business decision-makers. (Source: CMO Council)

And when we say ‘struggle’, one small business owner best summed up the situation when he said: “If people talked to you the way that corporates speak to small businesses you would punch them in the face”

So why are big businesses finding it so hard to connect with their potential small business customers?

Through our research in partnership with Imperial College London, we identified five obstacles big businesses are facing.

Treating all small businesses the same

It might sound obvious, but not all small business are equal. Despite this, most of the time brands are adopting lazy and ineffective segmentation – simply looking at location, size of business and industry.

Think of that in the context of high street of retailers. How much does the hipster artisan baker really have in common with the 99p shop next door? Yet, using the usual firmographic segmentation they would be considered exactly the same. If you try to address everyone, you ultimately address no one.

The solution

Businesses need to reframe how they see small businesses, using psychographics to take into account the human part of the business decision and taking into consideration explicit goals (driven by the organisation) as well as implicit goals (driven by the individual) – especially considering that in business decisions, personal drivers outweigh business drivers 2:1 (Source: CEB)

The Volume/Value quandary

One of the biggest challenges for B2B marketers approaching the SME segment is a tactical one: small businesses offer a lower deal size than the ‘enterprise’ sell but a smaller market size compared to the ‘consumer’ sell. This leaves them stuck between the big business prospect that justifies an expensive sales team and the consumer audience, which can be efficiently served by broadcast media.

The solution

Marketers need to adapt to the new way small businesses buy. The old, lazy way of selling is ineffective; 82% of SMEs say that telemarketing doesn’t work and under 1% respond to cold emails. B2B marketers need to understand that small businesses are doing their own research online in the early stages of the purchase journey, and in the research stage are taking recommendations from family, friends and industry peers. This means brands really need to step up and make the effort to help them throughout the buyer journey and create experiences that people are going to talk to their peers about in a positive way.

Marketing cynicism

A lot like in the consumer world, small businesses are losing trust in traditional advertising, and even in the marketing messages that they are hit with through social media. As we mentioned above, they want to do their own research and take recommendations from their local community. The old ways of ‘spray and pray’ just isn’t going to cut it.

The solution

Businesses need to invest in being ‘the most helpful’ brand out there – providing content that will help buyers along their purchase journey and nurture the ‘soft sell’ as much as possible by always being there for potential customers when they need them. This approach pays off: we found that nearly half of small businesses end up buying from a supplier that has provided helpful content at some point.

Using the wrong tone of voice

Let’s face it, big brands often manage to talk a lot of jargon while at the same time unwittingly patronising small businesses. Just look at the term SME: one of the research participants said “As for the ‘smee’ word, what is that all about? I never call myself a smee. I don’t want to be patronised”

The solution

It seems simple, but brands have to talk to small business owners as real people, and in terms of their real issues and challenges (take, for example, Earnest’s campaign for Canon that did exactly this). But to do this, brands really need to take time to understand their audience and the world they live in, better –something we saw in The Trip around the UK.

Small business owners, like everyone else, expect a good experience

At the end of the day, small businesses want to have a great experience from people they work with. Partner businesses are so important to small business owners that communication and customer experience are paramount. But often brands aren’t stepping up to the mark. As one Small Business owner said: “We considered three or four options. Most didn’t pick up, were expensive or too rude.”

The solution

Big businesses need to ensure they design and deliver great experiences by mapping out customer journeys, asking customers for feedback post-purchase and always looking at new ways they can add value once someone is a customer. They also need to treat small business customers with as much respect as anyone else – ensuring not to patronise and put off a potential sale.

If big businesses can focus on tackling these five obstacles, they will be on the road to connecting with and selling to more small businesses.

The full Think Small report can be viewed here.

James Wood is head of Earnest Labs at Earnest B2B agency.

Advertising Small Businesses Market Research

Content by The Drum Network member:


Earnest is the award-winning B2B marketing agency that’s chasing out the humdrum in London and New York.

Find out more

More from Advertising

View all


Industry insights

View all
Add your own content +