T or F: 45% of SMBs Don’t Want New Leads?

It’s certainly “counterintuitive” but during my SEO, SEM & Directories panel at Borrell last week, Clickable CEO David Kidder presented a datapoint that was very interesting: 45% of SMBs don’t want new business.

What? That’s almost half.

We can debate the truth or inaccuracy of the 45% figure. But let’s assume for argument that the number is correct or that, at the very least, a substantial number of SMBs don’t want new business. I know people are still thinking “I don’t buy it.” However think about the doctor or dentist whose practice is full — or the contractor who may be completely busy.

As an aside, there may be a more nuanced idea here. Some businesses may need new leads/customers occasionally or seasonally but not regularly. Think of it as inventory management.

There is a sizable chunk of the SMB market, however, that doesn’t want to grow beyond a certain point. This is the philosophical essence of the 45% number. Where is the product for this large group that basically just wants to manage its existing customer relationships?

There’s generally a “hole” in the online marketing products out there seeking to deliver “leads” to small businesses. The reputation managment products (i.e., Marchex) now emerging offer to meet an important slice of these needs but reputation management is only part of the story.

Right now the CRM platforms for small business are:

  • Email
  • Facebook, Twitter
  • Mobile/SMS marketing
  • Coupons

These are being utilized to varying degrees and with variable effectiveness (mostly ineffectively). For example, most SMBs don’t know exactly what to do with a Facebook page.

If you were to walk down the street and ask SMB owners, “Do you want more business, more money?” most would say yes I’m sure. But there is a group out there, however large, of businesses that just wants to do a better job of managing their existing customers. Email is right now the main tool for this. It’s also a neglected part of the SEM/SEO/Etc. product mix. I would expect it to be added in by more channels over time accordingly.

But this new leads/existing customers dichotomy is something to consider in thinking about the future of the SMB product suite.

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There’s also the idea of business networking, something that MerchantCircle does. This is not a “product” exactly. But the idea of a place where SMBs can talk to each other and get questions answered is another interesting ongoing need that’s not well served online.

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18 Responses to “T or F: 45% of SMBs Don’t Want New Leads?”

  1. Tim Cohn Says:

    Excellent observation.

  2. Bill Says:

    The ‘old’ ways of thinking could be to just grow a few percentage points a year. Turn over employees and make a decent living for the owners, yes? Ridiculous but very true.

  3. Greg Sterling Says:

    Also known as “lifestyle” business.

  4. Dean McEvoy Says:

    Interesting data point. A little scary. The 45% probably includes the SMB who has been “sold” to so many times that answering yes to wanting more leads means they are going to be pitched to and convinced to try some complex SEM / online marketing campaign. SMB’s will do anything to avoid complexity.

  5. Ben Saren Says:

    We’ve definitely heard that, Greg. In fact, when a candidate is going through our interview process to be a sales rep, that’s one of the roll-plays we use: “I dont need anymore customers! I got customers coming outta my ears! I’m having a hard enough time just closing down at night to go home…” It’s definitely more common than most people think. Some businesses just have too much work – auto repair shops, some doctors – you get an appointment for weeks out because they just can’t fit you in, and expanding their business is not on their radars.

    • Ben Saren Says:

      I meant role-play, not roll-play. Although it does sound fun.

    • Dean McEvoy Says:

      Sorry for the repost I meant to click reply and wanted to flag it to Ben “Ben, Do you think they actually do have too much work or its a combination of them “talking up” how good their business is and a tactic to make sales people go away?”

  6. Dean McEvoy Says:

    Ben, Do you think they actually do have too much work or its a combination of them “talking up” how good their business is and a tactic to make sales people go away?

    • Ben Saren Says:

      Hey Dean! That varies greatly, in my perspective.
      – Some businesses are just really good at what they do.
      – Some are the only one in a specific market.
      – Some are seasonal.
      – Some have a niche.

      I can think of examples of all these things. So it’s hard to generalize it.

      This is not the majority of SMBs, in my opinion and from what we’ve seen. But it’s not uncommon either.

  7. Dan Greco Says:

    I think this metric is fine in a static situation. Every month we (Infogroup) average roughly160,000 new business additions and 120,000 business deletions to our US businesses databases. Yes, every month. I am sure that of the 55% who ARE looking for new leads, many of those are new businesses.

    I agree that some SMB’s want to just better manage existing customers. I more or less agree that “Leads” are not the way to do it. I think instead of using leads, SMB’s should be using Data. Data allows our customers to update their customer information platform. Data allows SMB’s to better understand their customers and thus better serve them. It also allows them to have a way of finding out what the best and highest lifetime value customers look like, and then replicate them. Marketing Science stuff, not just tweeting and facebooking. When combined with listening to customers on the social media outlets, data management can be a powerful tool to retain and satisfy customers. Especially existing ones.

    I believe this article is right on with the lead providers that metaphorically toss a list to the SMB and then walk away, but Infogroup seeks to engage SMB’s in the total management of customers. I think a great many people have seen us as a list company in the past. I invite you to reinvestigate what Infogroup is doing for SMB’s. Leads may be seasonal, but I would make the argument that data management is ongoing in a well run business, even an established and comfortable business. We are meeting those needs for our customers too. We don’t ask our customers to be Marketing wizards. All we ask them to do is call us, and tell us what they are trying to accomplish. We can take it from there.
    Long Story short – The answer is true, they don’t want new leads, they want better data. Even if they don’t know it.

  8. Leopold Bloom Says:

    I don’t believe this 45% figure for a second. Most small businesses want (good, profitable) leads. What they don’t want is constant sales pitches from SEM or online advertising companies.

    It used to be that the radio ad guy would call the SMB, then the neighborhood newspaper, then the Yellow Pages rep, then the Police Retirement fund, then Valpak, then the supermarket shopping cart guy, then the billboard lady, then the Little League T-shirt sponsorship–all day long, every day, all trying to get their hands on a piece of the SMB’s very limited advertising budget. Today you can add the constant calls from numerous internet-related businesses whose product the SMB has never heard of, and doesn’t understand anyway.

    So the quickest way to get your name off the prospect list permanently is to say, “I don’t need, or want your leads” to the fourth, 22-year-old ex-barrista to call them this morning on an 800 number and a bad VOIP connection.

    The sales manager(s) need to stop whining, change their pitch, AND figure out what the prospect is REALLY telling them.

    • Todd Leiser Says:

      It may not be that SMBs DON’T want new leads/more business but rather they CAN’T.

      Increasing business means potentially needing to hire more employees which takes time to recruit, interview, train, and retain while increasing overhead, taxes, insurance premiums etc.

      Not to mention the cost of the advertising being presented that will presumably bring that new business to them.

      I’ve found that many SMBs are happy with the lifestyle their business is financing for them and may just want more time.

      Time to spend with their family, on their boat, on the golf course, etc.

    • Dan Greco Says:

      22-year-old ex-barrista …So funny and So true. Great!

  9. Suresh Srinivasan Says:

    I think another factor to consider is the age of the business. A 1 year old business is in a different frame of mind than a 10 year old business.

  10. Greg Sterling Says:

    Thanks for all the great comments and discussion. I think age of business is definitely a relevant variable here and I’ve seen that in survey research. Younger businesses typically want to grow; more established businesses may have their hands full with existing customers — which as was said may be an issue of capacity.

  11. Perry Says:

    I recall a segmentation study done many years ago that concluded there are three types of SMB’s – with about equal proportion. The growth third, the maintenance third and the sun setting third.

    Pretty consistent – one third want leads badly; the middle third are in optimizing mode (some, want leads, some want better demand-supply matching), the bottom third are managing to cash flow or downscaling.

    This aligns – the 55% feel like the growth third plus the middle third who are looking for more business in a measured way). The “other half of the middle third” would rarely respond well to a lead/growth centric message. My guess is they will respond well to demand-supply matching/optimization.

  12. Rich Rosen Says:

    Our data at FastCall411 indicates that as many as 1/3 of SMBs listed in organic results will have a disconnected phone, busy or no answer (these merchants must not want leads if they cant seem to answer their phones.) As many as 1/3 will have an answering machine or IVR. And I agree w Perry. Wanting leads has to do with stage of business. I don’t think this is a “I don’t want leads, so don’t sell me” answer. I think this is a “I retired a year ago” or “I am in a very specif niche and don’t sell to consumers” answer. There are 100s of reasons SMB dont want leads and these are legit. Finding merchants who do want leads is the next frontier in local search (and the focus of FastCall411)

  13. Get Back To Where Your Listings Once Belonged Says:

    [...] as Clickable CEO David Kidder pointed out, nearly 45% of SMB’s don’t want new customers. Maybe Sandra is one of [...]

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