Small businesses are a pillar of the American economy, representing 99.7% of all employer firms, employing half of all private sector employees and paying 44% of total U.S. private payrolls, according to the U.S. Small Business Administration's Office of Advocacy. Small doesn't mean easy, however: Marketers hoping to connect with these executives must learn and address the unique challenges they face as they struggle to bounce back from the economic recession.
The most significant challenge small businesses face post-recession is poor sales, said Stephen Smyth, director of member strategy for Enterprise Council on Small Business (see Q&A, this page). “Marketers would be wise to craft messages that demonstrate an appreciation for the inability of small-business owners to make the sales that they had hoped for,” he said.
For example, he said, a marketer might demonstrate how its product or service will free up time for the small-business owner to spend more time selling or free up capital that can then be reinvested in selling efforts.
At the same time, however, marketers should appeal to small-business owners' inherent sense of optimism, said Tim Rodgers, CEO of advertising agency Rodgers Townsend, St. Louis. “It's an attitude that's going to be prevalent across all small businesses,” he said. “They want to work with companies that are equally hopeful and believe that better things are ahead.”
That optimism remains intact despite the country's economic difficulties, according to a recent study by marketing agency Doremus, New York, and Forbes Insights, the custom research division of Forbes Media. The study, “Engine of Growth: Understanding SMB Decision-Makers,” polled 700 senior executives online from companies with between five and 999 employees (excluding home offices and franchises). Fifty-five percent said they expect to see growth for their companies over the next five years, and 29% said they expected their businesses to double in size over that time.
“Certainly, if you're an entrepreneur, you're an optimist by nature—otherwise you don't become an entrepreneur,” said Hope Picker, director of strategic research for Doremus. “But the amount of growth they were expecting even in this economy is fairly staggering.”
The study also asked respondents to rate on a scale of 1 to 10 how willing they are to take risks in their business decision-making, with 1 being “not at all willing” and 10 being “very willing.” Eighteen percent indicated they were a 9 or 10, and more than half said they were a 7 or 8. “They're not wild and crazy, but they're risk-friendly people,” Picker said. “You see a lot of [marketing] that gives them kudos for being an entrepreneur in the first place, but not so much that [highlights] tools and information to support their decision-making so they can take those risks intelligently.”
Small-business executives love what they do, and marketing targeted at them should reflect that passion, Rodgers said. “Advertising that specifically calls out small business means a lot to them; it's more than half the battle,” he said. “[It should be done] in a way that is flattering to them—not overly serious or overly earnest, showing these people working themselves to death. They enjoy what they do, make it look like they do.”
Time—or lack thereof—is a huge issue for small-business executives, so marketing directed at them needs to be quick and to the point, said Janine Popick, CEO-founder of VerticalResponse, a provider of e-mail marketing tools for small businesses. “The small-business owner often wears a ton of hats. They're often the ones going to the bank, taking out the trash, doing the business plan, doing the marketing,” she said. “We try to stress that we're going to be really easy for them and save them a lot of time and make them money. Those are the things that are real hot buttons for small businesses.”
A marketer's website and online efforts are particularly important in marketing to small businesses, said Rodgers, whose agency created a website with customer stories for the Hartford as part of an integrated campaign targeting small businesses. “It lets them control the amount of information that they receive and lets them do it at whatever time works best for them,” he said.
Marketers should also remember that small businesses are not one big, homogeneous group, Rodgers said. “You have to be aware of the number of small businesses that are women-owned and minority-owned,” he said. “Things like respect and work-life balance are big issues that you can relate to the benefits of your product that are especially important to those audiences of women and minorities—but also more and more to men, who are taking on more responsibilities in households.”