After dealing with hundreds of solution providers for each of the 15+ years I’ve been in business, I’m taking to my own blog to explain how they can get more signups from the smallest sized businesses they’re targeting. If you own a business, feel free to chime in at the bottom of this post. I’d love to hear your thoughts.
Dear Solution Provider:
Whether you offer Software as a Service (SaaS), or other tools and services to help businesses increase visibility and boost sales, you should read this. Not because I say so, but because hundreds of thousands of online businesses are trying to get the message across, and you’re not listening.
From AdWords management to social media marketing, the touting of your tools is falling on deaf ears, partially due to your marketing methods (like sending daily emails reminding potential clients how great your product is without much social proof). But it’s mostly because you don’t understand the majority of the “small” businesses you’re targeting.
Small business. You’re including way too many online companies in this group. According to the Small Business Administration a small business is defined by many factors, and it can vary for each type of industry. For retail and service offerings, the average annual receipts is from 7.5 to 38.5 million. Across the spectrum, employee count can be as few as 50, but as high as 1,500.
There is an entirely different level that applies to the majority of online stores and websites. It’s called the micro business. And nearly nine out of ten businesses in the US fall into this group. (Source: SBA)
We get it. You have some cutting-edge tools, and employ marketing geniuses. But, here’s the problem. There are, on average, 6 services or tools each online business really needs to implement in order to gain the traction necessary to survive. They include selling software (shopping cart), email marketing software, a simple social media management tool, an SSL certificate, order processing tools (outside of shopping cart), and shipping tools. These solutions all cost money. Often BIG money.
Yes, these businesses may also use customer service software and other related services, though many are still corresponding with shoppers solely via email, social media and the telephone. If you’re wondering why they’ve foregone advancement in technology and in-depth reporting, read on…
Here are 12 issues with your offerings and how you market them. Address each of them, and both you and many of the micro businesses you target will benefit.
1. Realize that the average micro business operates on cash. Seldom are they working with investors or bank loans. Credit cards may be used to get them by, but the bulk of the money they spend comes directly from recent sales.
2. You say “value”. They hear “cost”. Your $2,000 a month solution might be a good “value”, but when you factor that with the other solutions they’re already paying for, that could mean they’ll wind up spending more than they’re bringing in. If they can’t afford the cost of your offering, they’ll never realize its value.
3. Your offering may be more than they need. Have you thought about dropping a few features for this class of business? Most every “all in one” solution I’ve worked with includes several functions the micro business will never use.
4. Your 14- to 30-day trial period is not enough time for them to decide. The average micro business is run by just a handful of people. They’re doing so much themselves they haven’t the time to drop everything and run a plethora of tests. Besides, stats for their Return On Investment (ROI) isn’t viable when tracking only a few weeks of data.
5. Your support documents are lacking. Many micro business owners manage tasks late-night or on weekends, often when support staff isn’t available to answer questions. If you want to sell to them, they have to be able to use your tools any time they’d like. Let them help themselves.
6. They’re tired of all the big words and industry terms you’re using. They don’t really understand what you’re saying. Why don’t you simplify things?
7. If they don’t need your product, don’t even try to take their money. I have lost count how many times I’ve had a new client come in, only to find out the costly solution they’re using is either overkill or of no benefit at all. This kind of bad experience makes them all the more apt to trash your email or not take your call. Find out their needs (without asking for too much information) and just be honest.
8. Enough with the commission-based services. The average microbusiness can’t afford to give you 10% of a sale on top of other fees and commissions it’s already paying. Unlike many industries, whereas the markup of a product is 100% or more, these smallest sized businesses are struggling to be more competitive, which means less profit per item. Some do markup appropriately, and some undersell (which can bad for business). Instead of trying to get such a big piece of the pie from everyone, calculate what’s actually affordable.
9. Don’t take credit for sales you had nothing to do with. Whether your service is a flat fee or commission based, be honest about what constitutes a lead from you. If they’re currently using your service, be honest about what sales your offering actually secured.
Not long ago, one of my clients used a service that grabbed a 9% commission on sales the tool converted. So they thought. After a few months and some deep research, it was found code inserted into the checkout prompted shoppers to click a button. Every time that element was clicked – boom – a commission. Even if it was an affiliate sale, or a result of an email marketing campaign that included a coupon, or both. On some orders the company was coughing up 34% of the sale, and that was before any merchant processing fees!
10. Stop asking for time they cannot afford to give you. Do you think you’re the only one asking for “30 minutes of time” to introduce a product? First things first. Connect them to a page where they can learn something in advance. If not, you’ll also lose time because with most of these businesses you’ll be talking to one of three people: 1) The owner, who is pressed for time, 2) an employee, who may not understand the product and is also pressed for time, or 3) a consultant who gets paid to talk with you, and is going to be more hesitant to consider your offering because you’re what? Wasting someone’s time.
11. Don’t use A/B tests as the primary sell tactic. Unless the company’s website gets consistent traffic and sales, these tests can be misleading. Realize that some of these micro business sites don’t get enough traction to determine if a split test shows a clear result. Instead, focus on the all-important: what your product can do for their business, and testimonials from other like-sized businesses.
12. Ditch the annual contract. This requirement alone costs you more than half your prospects. The average micro business cannot afford to enter into a year-long commitment for a service or product they may realize doesn’t work for them three months down the road. Unless your service is as vital as internet access, telephone connections or a wireless plan, you should focus on customer retainment through clear and honest business practices.
Oh, and one more thing. Don’t try to overstep the employee or consultant because you didn’t like their answers. This is a good way to lose the prospect altogether. If something was misunderstood, take a day or two and contact the person to better clarify. Or, ask him/her to clarify their concerns.
Yes, I’ve actually had sales managers contact my clients and tell them I was a disservice to them because I refused to “see” the great benefits of certain services the client could not afford.
If you are a service provider, I’d love your feedback on this list.
If you are the owner of a micro business, is there anything you would amend or add?
Let’s interact so both providers and owners can have a better understanding of needs, wants and budgets.