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By Hank Barnes
The small to mid-sized business (SMB) market continues to hold appeal as a large growth opportunity for many high technology companies. As those organizations experience increased competition for large enterprise sales, they often see the SMB market as an opportunity to continue their growth, without the fierce competition that occurs in the enterprise space. This is an overly simplistic view that does not take into account the needs and characteristics of the SMB market.
Small and mid-sized businesses need many of the same technology capabilities of larger enterprises, but they need it at a level of affordability that makes sense for their business. In addition, they expect to receive appropriate levels of support to help them implement the solution in their enterprise. For the latter, organizations have realized that SMBs will not tolerate “crippled” or “feature limited’ editions of their product and are starting to configure solutions that are truly designed for SMB customers. The support needs are a bigger challenge, one that is much more difficult to try to overcome.
Technology providers have three primary distribution strategies available to them:
• Direct Sales
• E-Commerce
• Channel Sales
Each of these choices carries with it a similar strategy for support. The choice of approach is driven by the number of different factors including technology maturity, opportunity size (revenue), and target market. It is not easy to implement multiple distribution strategies at the same time for similar products; therefore, one approach typical dominates.
If a business has targeted enterprises, they probably sell and service through a direct model. They may partner with systems integrators for implementation assistance, but these integrators typically have the same profile. The challenge for the SMB market is that selling and supporting solutions for SMBs often requires a similar sales and service approach to selling direct, albeit on a slightly smaller scale (i.e. smaller teams, shorter decision reviews). As a result the cost structure of an organization that has sold to enterprises does not lend itself to selling to SMBs.
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