SMBs: The next growth opportunity for high tech
September 13, 2022
Small and medium businesses (SMBs) represent an enormous opportunity for the high tech industry to generate new and recurring revenue – and this market is hugely untapped and doing business differently. As more of these companies embark on digital transformation, they’re boosting their investment in IT products and services. In fact, according to Gartner, global SMB IT spending will increase at up to a 6.1% compound annual growth rate (CAGR) between 2020 and 2025.
SMBs are demonstrating enormous resiliency in meeting the change in demand as we come out of the pandemic. They are now looking towards growth and increased revenue as things return to normal.
High tech companies have a great opportunity to tap this market and capture new customers, generate more revenue and establish recurring revenue streams for the future. However, many high tech companies are unable to effectively target, service and grow this market because they don’t fully understand SMB needs and expectations. As these companies continue shifting towards as-a-service business models, they are realizing the importance of the SMB market and looking to improve their core offering for them.
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The Need for Relationships at Scale
Small businesses represent over 90% of all firms globally, provide roughly 70% of all employment and, by some estimates, contribute up to 70% of global GDP. While the time is right for high tech companies to engage and capture this fast-growing market, these smaller companies and enterprises are clearly not on the same page — and they need to be. The graphics highlights, there is a major disconnect between these two groups. While there is a gap in trust, SMBs feel a larger divide in the caring, understanding and relationships in the market.
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While there is Trust, there is still a gap in Caring, Understanding and Relationship, resulting in an empty trust.
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How High Tech Companies Can Help
With SMBs becoming more digital, high tech providers should be tailoring an approach to engage and help them succeed. They can enable smaller companies to make the shift from physical to digital enterprises, scale operations and provide solutions to drive innovation in customer experience. High tech enterprises have an opportunity to advise SMBs on their journey to growth by leveraging solutions, having had the experience of helping other similar organization. Below are some of the ways high tech enterprises can help SMBs become more digital:
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Employee enablement
Expand use throughout the employee base and improve employee technologies and services, keeping focused on core capabilities
- Simple and personalized user onboarding
- Intelligent device management
- Proactive company specific updates and resolutions
Infrastructure & Connectivity
Increase resiliency and digital maturity to remain ahead of their growth ensure security and scalability
- Plan and leverage best practices, especially at technical inflection point
- Consultative services with intelligent account insights
- Co-visualization of hardware/software/services
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Edge
Grow or utilize edge services by providing companies efficiency and insight across the entire organization
- Cloud and IoT solutions
- Simple and intuitive setup and connection
- Physical space assessments and collaboration
X-as-a-Service & Software
Increase speed to value with optimized consumption and most relevant features utilization thereby create opportunities for SMBs to innovate and grow
- Self-service engagement and transaction management
- Customer education and product feature adoption
- Timely cross-sell and renewals management
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As SMBs grow, they likely will need multiple solutions. However, high tech companies struggle to appropriately identify where SMBs are in their digital journey and customize offering bundles for relevant clusters, leading to further disconnect. Companies have earlier access to SMBs – employee tech is the most purchased offering by SMBs, and they have an opportunity to advise SMBs as they expand their needs on the initial purchases.
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While the highest percentage of products are used for employee tech, the majority of products are used for cloud, collaboration and productivity.
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The Grow SMB Solution
Many companies today have “pockets” of excellence that activate pieces of the go-to-market (GTM) cycle. Some have capabilities to leverage third-party data to enrich leads, while others may have a winning inside sales team, but fail to identify the right prospects using AI and analytics.
The combination of outcome-focused offerings paired with recommendations on addressing challenges, all powered by an intelligent automation platform to unlock personalization at scale, can drive new business through the following ways:
- Accessible intelligence tailored to the SMB customer use cases, from initial solution research all the way through adoption and ongoing engagement, with expanded and targeted addressable prospects. As an example, a major software provider experienced ~$130M in potential value for two industry verticals.
- Intelligent automation and personalization to improve efficiency, customer engagement and experience. A high tech consumer company to identify up to ~15-20% uplift in their sales and marketing productivity.
- Big data/AI engine to deliver intelligence and insights at scale throughout the customer engagement — from omni-channel targeting and lead generation, cross-selling, and renewal management through deal velocity/customer follow up and sales and partner enablement.
Unfortunately, very few high tech companies have a cohesive, end-to-end marketing and sales approach specific for SMBs. Combining proper identification of prospects and the necessary value propositions through personalized marketing campaigns can help engage SMBs better. For example, through the use of third-party data, AI-sensing and pre-built AI and ML algorithms, companies can gain insights up to 30-40% faster to tailor their approach to SMB marketing, sales and relationship strategy. Companies who have engaged their SMB clients with this type of approach have reaped enormous financial benefits, typically around 6 – 8% increased revenue. This can enable a cohesive collaboration with channel partners by providing leads and opportunities that are much more targeted and could be best served by these channel partners. This improves the accountability from channel partners, which is often a challenge in the high tech space.
Is Grow SMB right for you? High tech executives should ask themselves a series of questions before they engage on their campaign to help SMBs. These include:
- Would your smaller and medium-sized customers classify your relationship as a value-add?
- Are you seeing growth in the SMB segment in-line with the disruption in their segment?
- Do you have the appropriate scale to market and do you sell to them in a cost-efficient manner?
- Do you think that actively engaging the SMB market would lead to an improved success rate for your company?
Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.
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