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SME marketing channel preferences revealed

By Andrew Dalglish -

SMEs.  There are close to two million, they generate half of the UK’s GDP and employ 60 per cent of the private sector workforce.  Moreover, they’re big buyers of B2B products and services.  Just ask Sage who’s built a £1.4 billion business on the back of them.

SMEs are a potentially significant opportunity for many B2B marketers then, but how best to open a conversation?

This was puzzling me so I asked 450 buyers of B2B services within SMEs to imagine a prospective supplier wanted to engage with them.  How effective, the question continued, would different communication channels be in grabbing their attention?

Their answers provide clear guidance on where best to target marketing resources.  Below are some highlights and if you’re interested in delving further, PowerPoint charts of the findings – at an overall level and exploring differences by SME size and sector – can be downloaded here:  SME marketing channel preferences

An overview

The fourteen channels explored fall into four categories based on their effectiveness.

  • Prioritise – channels with the highest impact
  • Deploy selectively – channels without mass appeal but effective amongst many
  • Think carefully – channels disliked by the majority but appealing to a minority
  • Handle with care – channels that may alienate as many dislike

And there are six specific learnings – outlined below – which will help ensure marcoms have the best chances of breaking through.

Focus on digital channels for maximum impact

First, prioritise two digital channels – search and email.  Two thirds of SMEs (68 and 64 per cent respectively) say these are the best routes for a prospective supplier to reach them.

Second, seek the implicit endorsement of trade media.  A similar proportion of SMEs, 62 per cent, report that suppliers producing editorial content in trade titles are likely to get on their radar.

Reflect on the value of ‘face time’, ‘broadcast’ and ‘passive’ channels

Third, if the goal is to grab the attention of SMEs, contemplate the likely ROI and appropriateness of seven channels which are consumed by some, but ignored by an equal or greater proportion.  Specifically:

  • Four ‘face time’ channels – conference speaking (minus 24 per cent when negative responses subtracted from positives), seminars (minus 23 per cent), trade shows (minus 18 per cent) and networking (minus 12 per cent)
  • Two ‘passive’ channels – directories (minus 25 per cent) and trade advertising (13 per cent)
  • And one ‘broadcast’ channel – direct mail (6 per cent)

These channels may work for your particular target audience or a segment of it.  On the other hand they may not.  Knowing what camp your prospects fall into then is critical.

Avoid telemarketing and use social media appropriately

Fourth, use telemarketing very selectively, if at all.  Almost all SMEs (82 per cent) report that this is not an effective route to engage with them.  Importantly, a significant number has a strong aversion with almost one half (45 per cent) reporting it to be completely ineffective in reaching them.

Fifth, use social media channels by all means, but don’t necessarily expect them to gain the attention of SMEs.  58 per cent of SMEs report that blogging is not at all effective in engaging them; 67 per cent say the same of tweeting.  Now that’s not to say social media doesn’t have other valuable roles.  Take blogs.  This channel may not grab attention, but is of value further down the sales funnel in supporting brand positioning and demonstrating expertise.  It also of course has SEO benefits.

Adopt a segmented approach

And finally, adopt a segmented approach.  SMEs are not one homogenous group.  Rather, in most product categories they can be clustered into distinct groups based on behaviours, preferences and attitudes.  This means that for maximum impact, brand, offer and message need to be designed with specific target segments in mind.   This segmented approach should also drive channel choice.  For example, one in ten (10 per cent) state that direct mail is very effective in reaching them, but one fifth (19 per cent) report the opposite.  So for maximum impact, couple the general guidelines above with an understanding of your target segment’s unique preferences.

 

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Differences by SME size

With segmentation in mind, how do channel preferences differ by size of SME?

Let’s consider the opinions of four different sizes of SME – medium (50 – 249 employees), small (10 – 49), micro (1 – 9 employees) and sole traders (just little old them).

The most notable difference is apparent when medium sized businesses are compared with their smaller cousins.  As we progress up the size chain behaviour changes.

Common with other SMEs, search and email remain central to accessing medium sized SMEs.  However, it appears that the larger end of the SME market tends to consume more channels.  On balance, decision makers within medium SMEs rate six channels as effective in reaching them.  Sole traders, micro and small SMEs rate just three.  This suggests that the larger the SMEs you’re targeting, the more an integrated, multi-dimensional approach to marketing communications matters.

Larger SMEs also differ in two other important respects:

  • You should try and meet buyers face-to-face.  Three fifths (61 per cent) report that networking is an effective means of accessing them (contrasted with 42 per cent of small, 43 per cent of micro and 36 per cent of sole traders giving the same answer).  Likewise, 59 per cent of this segment also consider trade shows to be effective (as opposed to 45 per cent of small, 39 per cent of micro and 28 per cent of sole traders)
  • Thought leadership and being part of their professional community will position you favourably.  For example, conference speaking is classified as effective by 57 per cent.  This is more than double the number of sole traders giving the same answer (22 per cent) and far ahead of micro (34 per cent) and small SMEs (45 per cent).  Similarly, advertising in trade press appeals to two thirds of this audience (69 per cent) which contrasts with sole traders (59 per cent), micro SMEs (55 per cent) and small SMEs (51 per cent)

Differences by industry sector

Channel choice should also be driven by the industry sectors being targeted.

We explored differences in opinion between five sectors – Financial Services, Marketing & Media, Business & Legal Services, Retail and ICT.  Doing so reveals two important similarities:

  • Search continues to have universal appeal (as does email in all sectors other than Retail)
  • Four channels – telemarketing, tweeting, blogging and SMS – are seen as ineffective across the board

In other words, by sticking to the general principles outlined earlier, you can’t go too far wrong.  However, if targeting the Financial Services, ICT or Retail sectors, the following should be noted for maximum impact:

  • SMEs in Financial Services have a clear preference for knowledge and network based marketing.  When compared with the typical SME, this audience is more open to trade articles, networking and seminars (71, 64 and 58 per cent respectively rate these channels as very or quite effective)
  • SMEs operating in the ICT sector are also noteworthy in their desire for knowledge.  The single most effective channel in the eyes of this audience is trade articles (66 per cent)
  • Retailers seem to be avid consumers of trade media.  68 per cent rate trade articles as effective and a similar proportion, 63 per cent, say the same of trade advertising.  However, unlike other SMEs, email marketing is much less likely to be effective.  One quarter (28 per cent) of retailers tell us it is completely ineffective in reaching them

Find out more about Circle Research’s B2B target market research here.

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6 Comments

  1. Richard Brenkley

    Excellent article and piece of research Andrew. Interesting to see that the *priority* channels are dominated by Digital and unhuman methods which suggests that buyers still want to undertake the buying process on their terms, when they are good and ready, and being *sold* too at Networking Events, and so on doesnt cut-it! Am I right to suggest that the channels that score more highly are also those that the message and call to action are more tightly controlled by marketing as apposed to salespeople who lead conversations at Trade Shows, Telemarketing, Networking, etc? I’m not entirely surprised to see SMS with such a negative score as it would irritate me if I received such communications although I am sure it’s just a matter of time before it becomes the *norm*. I wouldn’t have guessed Blogging and Tweeting to be less of a preference however. Intriguing as to why we all try so hard!? The research has certainly inspired me to evaluate our own plans, and those of our clients. Thank you.

  2. Andrew Dalglish

    Thanks Richard. Was a bit surprised and disheartened by the low performance of blogging/tweeting myself. But on reflection a couple of thoughts came to mind. Blogging and tweeting may not themselves get a prospective supplier on the SME’s radar, but they can help search rankings. So with search being the most effective channel, blogging and tweeting do have an impact, just indirectly. I suspect it’s also likely that activities such as these will become more important further down the sales funnel in supporting brand positioning and credibility. Worth the effort after all perhaps!

  3. Trish Harriss

    Hi Andrew – I followed the link from your piece in B2B Marketing magazine this week – and very glad I did too! Thanks for sharing this insight into the SME market – I am using it to hone some current planning and to make sure the spend is maximised. Great stuff.

  4. David Regler

    Interesting report Andrew. From an agency-side perspective I agree with the view that telemarketing is less effective with the smaller SME’s but starts to make more sense in the 50-249 bracket. This echos our experience where we get more traction with telemarketing from medium SME’s upward. I think it’s because at the smaller end of the SME spectrum buying decisions are made by a smaller number of time poor individuals (ie: owners/MD’s) who are really hard to reach and less open to calls. Once the organisation scales then decisions are delegated out to mid-level managers who can be more accessible and have more time for a targeted/relevant telemarketing call. Thanks for the study!

  5. Niall Habba

    Hi Andrew. It’s a fascinating peice of research with some really interesting results. Having said that, I’m not sure I’d agree that it provides “clear guidance on where best to target marketing resources”…. Surely guidance is better provided by measuring actual effectiveness than by asking prospects about their preferences? Using this criteria I’d suggest that the guidance would be very different – it’s worth noting that Sage, in common with a huge range of other businesses engaging with SMEs, use telemarketing as part of their mix. I’d suggest that the very poor rating that telemarketing received is down to the poor execution that’s rife in this channel – a bad telemarketing call is likely to irritate prospects more than a bad email or SMS because it’s disruptive. However, this “disruptiveness” is precisely what makes it such an effective channel when it’s executed really well….

  6. Andrew Dalglish

    Hi Niall. Sure there are situations where telemarketing is appropriate and, if well executed, effective. Think what the survey suggests though is two things. If channels are to be prioritised (especially if budget/time is limited) then digital is probably the best place to begin. Also looks like telemarketing starts from a default position of having to fight against a tide of negative sentiment. All the more reason, as you note, to deploy smartly.

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