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Selling SaaS to SMBs: Is it Really Low-Touch?

  • January 2011
  • Posted By Janet Muto
  • 1 Comments

by Janet Muto

Janet MutoLately, companies who sell enterprise solutions have been jumping on the SMB (small to medium sized business) market bandwagon. (See my previous post, SMB is the New Black.)

Here are some of the reasons I have heard for entering the SMB market:

“The new SaaS version of my existing product doesn’t have as many features as on-premise version.  It would be ideal for the SMB market.”

 

“The SMB market is huge.  If I just put up a website, I’m sure I’ll get SMBs to buy my product, with minimal marketing on our part.”  
“The SMB market is low touch – I can release my product online and don’t need sales people to sell it or support staff.  An online FAQ and email or contact form will do the trick.”

The root of these ideas is the assumption that selling to SMBs is a low-cost, low-touch activity.  That is not exactly true.  While it will be low-touch when your business model has enough volume flowing through it, it takes a big investment to get to the right volume.

Selling to SMBs requires as much – but different – effort as selling to enterprise customers.  The benefits of scale are a key end (not beginning) goal.

Here’s what you need to know to succeed with an SMB SaaS model:

  • Acquisition: There are millions of SMBs, but finding them takes both creativity and marketing dollars. Acquisition is a “front loaded” investment – subscription companies may spend a year (or more) of revenue to acquire a new customer.
  • No speed bumps: SMB customers need a self-service model that works; one with no speed bumps.  Or, if there are speed bumps, make sure there’s someone to respond to them and help with the sales process.  Make it easy for them.
  • Getting started: SMB customers need some basic information provided, such as how to get started with your product, how to keep going with your product and how to get help when they need it.
  • Coaching and support: SMBs value training and support.  They love the fact that a real person is there for them.

If there’s one thing to focus on when creating an SMB online offering, it’s this: to achieve low-touch, you need to eliminate the speed bumps.  To achieve high volume, you need to flatten the speed bumps.

If you put enough thought and care into your SMB sales model, you will get the volume you need to make it a low-cost, low-touch effort.

Good luck!

— Janet

@janetmuto
@highstartgroup

Comments

One note on acquisition: If you run an SMB and are selling to the SMB market ponying up 1-years worth of subscription revenue can be difficult. We've found relying on direct marketing tactics (email marketing, direct mail, telemarketing) to be successful and not cost a full year of revenue. However, I could easily see where broader traditional marketing (sponsorship of events, buying ad space in trade publications) could wind up eating up a years worth of revenue.

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