MSPs have to deal with a huge range of businesses, from small one-or-two-person startups to huge enterprises, all looking to make a difference in their respective markets. But when it comes to small and medium enterprises, what are the differences when pitching to them? Let’s take a deep dive.
The Basics: Definition of Small and Medium Businesses
Let’s start with the basics of what a small and medium business is. For Europe and the UK, they differ slightly, but they follow a similar set of guidelines:
Small business (98.3%)
- Fewer than 50 employees
- Under €10 million turnover
Medium business (0.8%)
- Fewer than 250 employees
- Under €50 million turnover
In the US, there is no official distinction between small and medium businesses. The Small Business Association makes it more complex by having different standards for different industries — a small business could be defined as under 250 employees in one instance and under 1,500 employees in another! Turnover could be from around $10 million to $40 million, as well.
Roughly speaking, however, it’s a good rule of thumb to describe a small business in the United States as:
- Fewer than 500 employees
- Under $20 million turnover
They make up 99.9% of all businesses in the US.
Canada has its own definitions, and there is no revenue requirement:
Small business (97.9%)
- Fewer than 100 employees
Medium business (1.9%)
- Fewer than 500 employees
Across most countries, medium businesses make up a fraction of the economy, but they often have a similar economic impact as small businesses. The reasons are fairly intuitive:
- Majority of small businesses consist of one person (the owner).
- Most small businesses fail to make a taxable profit.
- Medium enterprises must have reasonable cash flow to employ people.
For MSPs, medium-size businesses offer an incredible opportunity to generate margin, but they often struggle to close these deals. That’s sometimes because they treat them the same as small enterprises, but the reality is that they’re often decidedly different.
Small Businesses: What Are Their Quirks?
We’ll start with small businesses (as defined in the EU definition — under 50 employees). In most cases, these won’t apply to micro businesses (sub 5 people), although there are often opportunities for MSPs to install unified communications in businesses even this small.
It’s personal
Small businesses often see a direct correlation between how well they’re doing and the salaries of those involved in the negotiation. While businesses will try to think of the potential return on any investment, they’ll also feel the sting of a major purchase, especially if it goes wrong — and it’s often the decisionmaker’s own money that’s on the line.
This means that small businesses are often concerned with the monetary aspect of a purchase more than the potential positive impact of that purchase. As a result, they often look to lowering their costs rather than making long‑term investments.
Shorter license terms are a good way for MSPs to show small businesses that if they’re not satisfied with the overall quality of a system, they can quickly change it. In addition, they can gradually build up their system over time, adding in new features as the business grows. Because there’s no long‑term cost, they’re able to be flexible.
Finally, using a more advanced cloud system such as Wildix allows them to have an enterprise-ready solution that grows with them, even as they move offices, expand, shrink and weather the storms that affect small businesses.
No specialization
Small businesses often struggle with having a lot of general talent but not enough people specialized in any particular area. As a result, one person often has to do a lot of tasks that would be split up in a larger organization.
For example, a marketing specialist might have to create copy, generate graphics, mine databases and deliver materials for shows and other events on their own. They’ll often be making significant decisions with limited resources.
Sales may be handling both presales and post-sales followup, acting as a general liaison between the customer and the rest of the team. Again, there are often multiple pressures on time, bringing in new business and engaging current customers through the same person.
MSPs can help by reinforcing the efficiency of the interaction process through unified communications, enabling stressed sales teams to reduce the time spent on admin. In addition, they can keep chats in a single place.
Lack of process
Small businesses tend to have fewer processes for doing things. That’s because a process is only used when you want everyone to follow the same trajectory — and that’s not needed when there’s only one or two people to work with on any project.
But that also means there’s no tendency towards consistency. The requirements of a system may change daily during a tender, and the final decision tends to be made based on the gut instinct of the owner.
For many small businesses, the personal touch is the most important aspect of a transaction. This means that MSPs with a well-documented system such as Wildix often stand out because they can efficiently put in a system and keep it running smoothly.
Medium Businesses: Their Quirks
For those that are significantly bigger than small businesses, they often have slightly different priorities. These are often caused by the following reasons.
Decision-makers are more removed
For medium-sized businesses, the focus is often less about making money and more about creating turnover. As a result, decision-makers often don’t have a personal stake in the business, which means they’re more likely to take risks on newer technologies. If they authorize a few thousand dollars a year for a new communications system, that’s still cheaper than an on-prem solution, and it can help them hit their KPIs through enhanced efficiency.
The personal stake becomes “How do I meet my KPIs” rather than “How does this make me money.”
This attitude starts to shift the focus away from profit and towards the personal value that we talk about in our ValueSelling courses.
Wildix training can therefore make a huge difference when it comes to selling to medium-sized businesses in particular, as it helps you understand the motivations behind a decision. Carefully building up the picture is vital.
Multiple decision-makers
In addition to the decision-makers being more removed from the core ideal of making money, you also have more of them. While with a small business you might have one or two, in a medium business, you could have five or six people who could say “no.”
Medium businesses tend to start delegating decisions to “no” decision-makers fairly quickly, making it far harder to get to the “yes” decision-makers. The key is to win over the people who can say “no” by understanding their pain points and building up support within the organization.
This naturally takes longer, but the payoff is worth it. Getting into a company with 250 seats is generally more efficient than getting into 10 companies with 25 seats — and the overall revenues per seat are often higher, as well.
Using Wildix means that you can get all the decisionmakers into a single room, and the power of the solution lets you solve multiple issues simultaneously through integrations via APIs and iframes.
More specialization
Often, the core reason for multiple decision-makers is because people become more specialized. Rather than having two salespeople doing multiple jobs, you might now have a team that focuses on new business opportunities and a team that looks at maintaining current opportunities.
Or you might have an entire marketing department that has copy, graphics, web and other specialists who focus on their core areas of marketing. Consequently, teams become more siloed in a medium business because they’re not constantly involved in every decision.
Unified communications at this stage becomes about connecting individuals effectively through the organization of chats, reducing siloing, while helping them maintain focus on their tasks. In addition, organizations will need to be able to easily add and remove people as they join and leave the company — a common issue for medium-sized businesses.
The ability to cater to more specific needs and reduce overall distractions is vital, and Wildix helps through the organization of chats, being easy to add and remove licenses, and quickly assign new seats to employees as needed.
More processes (not necessarily efficient ones!)
As more people join the company, it starts to pivot toward writing down formal processes to avoid issues. Typically, it discovers it has a problem and creates a process to solve that problem.
However, these processes quickly become outdated as the company pivots further, often changing its teams and how they’re organized. In many cases, the overall decision-maker isn’t clear, especially when a reorganization has happened recently, and it can be difficult to make headway.
Through the clear hierarchical structure within Wildix, it’s easier to define which licenses each person needs, where they are in the hierarchy and makes it simpler to assign the right person the right work.
And again, integrations that make use of the latest technologies become attractive for medium enterprises as they can start reaping the benefits of scale — by making 10 employees become more effective, they don’t have to hire another one if business starts booming, saving money.
Remote work
Complicating matters is the growing movement toward remote work. People working outside the office can become removed from it, and reliable systems are required to effectively work from home — especially for customer-facing roles. They need to create good processes to solve issues.
Good communication is needed for remote workers, and a good unified communications solution with reliable video, text and voice allow managers to more effectively manage their reports. This is crucial for medium organizations that are transitioning from a tighter office-based workforce to one that’s more distributed.
Their pain points are solved through persistent chats, high-quality communications and business phone numbers that are controlled through a single pane of glass. Those numbers are accessible from the computer and from a mobile phone or tablet, so those employees are easy to contact wherever they are.
In addition, the tools that they use can be accessible from that same pane of glass, resulting in higher productivity and reduced errors.
The SMB Lowdown
Ultimately, SMBs are often put together, but they have markedly different requirements — and even businesses with similar sizes in the same space can have different pain points. However, treating a medium business like a small business can be a tactical error and can lose an MSP a valuable deal.
With Wildix, MSPs always have options to capture small and medium businesses — all the way up to large enterprises — and we have the sales training you need to deliver the value they want. Check out our blog post on ValueSelling, our sales methodology, for more information.
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