SMB Market Getting ‘Noisier’ by the Day

At the Borrell show last week there were a ton of terrific speakers and sessions. I had lots of interesting conversations “in the hallways.” But one thought keep coming back to me: no one is really seeing the world through the eyes of the SMB.  

In the opening session Jeff Jarvis discussed the movement from “selling scarcity to selling service.” I thought this was a clever slogan to capture changes in the market: the difference between selling a limited number of ad placements in your own publication to providing an array of marketing options and services to your customers that reach beyond your O&O properties.

In general Jarvis said some insightful and compelling things and there was also some, I would argue, naive thinking he put forward. But the concept he discussed — scarcity to service — is right.

Perhaps because it was an industry conference few people discussed the SMB’s perspective or predicament. There were a few mentions in some of the sessions I attended — I wasn’t at all of them of course — and I tried to do this in my two sessions. But most people discussed their margins and how the new product offerings would grow them or preserve them, etc. People also discussed why they were better positioned than the other one to sell into the SMB or local market. 

While the YP publishers have been selling SEM and related services for several years now (since late 2004), newspapers, radio stations, TV affiliates, credit card issuers and a range of others are now in the hunt. There are lots of platforms and white label SMB marketing “solutions” providers out there. It’s pretty “turnkey” to start selling SEM, SEO, websites, etc. to the SMB market these days. 

The market is getting more and more noisy. And many of the platform companies now are also moving into direct sales (e.g., WebVisible). 

The rising “noise level” contributes to the churn problem that concerns everyone in the segment. More competition, more aggressive pricing and more inflated claims of quick results all contribute to more confusion and more churn when SMBs are dissatisfied, disappointed or don’t understand what they bought or how it works. 

Everyone is coming at these small businesses and most of the offerings sound very similar. So even as the products to match SMB needs are in the market it’s very tough for SMBs to figure out whom to trust and how to think about all these things. 

If you were getting 5 to 10 calls a week from competing providers of similar online marketing services how would you figure it out?

One answer, for later discussion, involves the idea of “trusted brands.”

12 Responses to “SMB Market Getting ‘Noisier’ by the Day”

  1. Forecast4: All traffic starts local – somewhere in users brain Says:

    […] One answer, for later discussion, involves the idea of “trusted brands.” (Greg Sterling) […]

  2. Colin Pape Says:

    Great post Greg…

    Trusted brands are definitely an advantage in a space dominated by noise, false promises and companies in it for short term profits…

    Most will have an increasingly tough time in a market that’s becoming more competitive every day (Place Pages, Facebook Pages, ShopCity Profiles, etc.).

    It’s a race to the bottom for those with nothing to offer SMBs besides a sales pitch and an arbitrage play…

    Churn will continue to be a problem and I expect many companies to drop out of the race in 2010 as small businesses become even more focused on cost-cutting and those in it for the long haul continue to scale out innovative products that truly benefit their customers.

    It’s about to get interesting.

  3. Tom M Says:

    Greg,

    Great seeing you at the Borrell Show!! I definitely think there is a need for a media agnostic local agency to help decipher the sales pitches of all of the local media (and online platforms) available. I think what you will start to find is that some platforms will perform better based upon the individual vertical. For example, for lawyers, Company X (let’s say, an independent Yellow Pages company) will perform better than Company Y, (a newspaper firm). However, Company Y will exceed expectations for a different vertical. If you were getting 10 calls a week, you could understand the frustration of the small business owner.

  4. Greg Sterling Says:

    I’m sure you’re right and there’s increasing vertical specialization — at least in sales — among the various platform providers and sales channels.

  5. The FT on Debt and YP Publishers « Screenwerk Says:

    […] See my related post: SMB Market Getting ‘Noisier’ by the Day […]

  6. Todd Leiser Says:

    Greg, while you were at Borrell, I was attending the International Franchise Association Annual Convention that had 2500 attendees and representation from over 300 different franchised brands.

    There were FIVE sessions on Social Networking and ZERO on SEM/SEO/Websites etc.

    My take was that this constituency is looking beyond the “noise” to something else they (also) don’t completely understand, but can control themselves and costs less (or, other than time, nothing at all).

  7. Greg Sterling Says:

    Very interesting. Thanks Todd.

  8. Greg Sterling Says:

    Todd: I would agree that they don’t understand it but as you say it’s cheaper than SEM or SEO.

  9. WebVisible Closes $20M ‘C’ Round « Screenwerk Says:

    […] Indeed this competition makes for confusion and “noise.” See my earlier post: SMB Market Getting ‘Noisier’ by the Day […]

  10. Will Moore Says:

    For quality companies ‘trusted brands’ are the core of the business model. Using all web 2.0 facilities, these companies provide help, education, and guidance rather than direct selling. Satisfied customers will help sell the product or service for you.

  11. WebVisible Closes $20M ‘C’ Round Says:

    […] Indeed this intensifying competition makes for confusion and “noise.” See my earlier post: SMB Market Getting ‘Noisier’ by the Day. […]

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