Scaling a company that offers technology to small businesses is tough.
As Peter Thiel so eloquently puts it in Zero to One:
The product needs a personal sales effort, but at that price point, you simply don’t have the resources to send an actual person to talk to every prospective customer. This is why so many small and medium- sized businesses don’t use tools that bigger firms take for granted. It’s not that small business proprietors are unusually backward or that good tools don’t exist: distribution is the hidden bottleneck.
Additionally, small business owners are often overworked, and rarely have time to seek out solutions. Many have learned the trade over a decade or longer, and are fine with doing things the way they have always done. And with small budgets and cashflow constraints, a business owner must be certain that there is not only a high ROI but a quick payback period to their purchase.
With such headwinds, distribution certainly isn’t easy.
But if you get it right, selling to small businesses can be both lucrative and impactful. Just look at Yext, Grubhub and Yelp to name a few.
Here are a few tips to help you overcome the challenges and succeed at selling to small businesses
First, understand your customers’ language
Small business owners get called and advertised to every single day. And not only that, many have been burned by companies selling crappy leads, software that didn’t do anything, or the ‘first spot on Google that just opened up’.
Really understanding your customers’ language is an easy way to cut through the noise and establish trust.
If you were to describe my company LawnStarter’s value prop to our service providers in typical business lingo, you might say something like this:
LawnStarter increases your utilization by filling up your excess capacity. We increase your profitability without increasing your costs because we bring you incremental jobs in close proximity to your existing routes.
Whereas, a message that resonates much better:
We’re looking to bring you 20-30 extra recurring, paying customers per season. We show you the price upfront, and you don’t have to take any jobs you don’t want. And since we only send you jobs near your existing customers, you actually make more money due to the reduced drive time.
Not only is that laymans terms, it does the following:
- We mention that these are paying customers – not just leads. We learned early on that home services professionals are sick of getting burned by sleazy lead gen companies.
- We reinforce that the customers are recurring. This is because we know that lawn care companies don’t make much money on one-time jobs.
- Drive time is a well-understood concept in the industry. Reduced drivetime = more profit.
Not understanding your customers’ language not only won’t convert; it’s a surefire way to alienate them, and see you as the enemy vs a partner.
Make your outbound sales script a requirement
If you’re selling to SMBs, you’re probably going to have an inside sales team. I can’t think of a single technology company that has scaled without inside sales operations.
Why is that?
There’s a finite number of small business owners searching for a solution, if any. But literally every small business has a phone number.
It’s a game of 150 dials, 10 conversations, 3 demos, 1 sale. It’s a grind, but if you can make the costs work, it scales pretty darn far.
Early on when I was making all sales calls, I treated every call a little differently. It was conversational, and we got quite good at it. We figured we needed to go out and hire someone who could improvise just as well – if not better than me.
That was until an investor who had scaled his company to hundreds of reps told us how stupid we were (this tends to happen a lot, as first time founders).
What he told us, was that we had to turn the call into a script. It’s actually much like a flow chart. You read the script, and when the conversation inevitably goes off-script, you give the answer, then move back to where you left off.
At first this seemed counterintuitive. Shouldn’t a top-notch sales rep be able to hold their own? Aren’t they better off if they can find out what works for them?
Well, as it turns out, it’s tough to optimize a sales team when everyone is doing something a little differently. Every time you give someone feedback, you say something like ‘well, in this situation I would have said something like X’. That makes your feedback just your opinion.
When you have a script that is proven to work when followed, your feedback is really one of two things: 1) you didn’t follow the script properly OR 2) there’s something wrong with your tone. Both are pretty objective.
Over time, you can easily listen to calls and understand what parts of the script aren’t working. You then change it, teach it to a few trusted reps and run an A/B test. When it wins, you make it the control. Can’t do that if everyone is winging it.
Additionally, enforcing a script ensures that expectations are set properly and that pushy, high-pressure tactics aren’t used. If you give reps free reign to say whatever they want to get the sale, you’re going to end up with people doing whatever they can to get the sale, and that’s going to hurt your brand long term.
Experiment with non-traditional channels
It’s very unlikely that there’s going to be much intent-based search you can grab. Or that you’re going to be able to come up with a solid lookalike audience on Facebook. Or that the small business owners you’re targeting are going to want to follow you on social media.
(Yes, I know there are exceptions, but this is true in most situations)
So, you’re going to have to get creative.
Here are some examples I’ve seen to be effective:
‘Claim your profile’
Let me start by saying I’m not a huge fan of this one, as it has the potential to be sleazy, which is why we never leveraged it at LawnStarter. But it’s worked for many successful companies including Yelp and WeddingWire.
Basically, you create a profile for a business whether they want to be there or not. Then, you invite them via email to ‘claim’ their profile, getting you a chance to market or sell to them.
It’s a bit hacky and borders on sketchy, but pretty standard in today’s world. What I don’t like about it, is so many times companies will trick the small business into claiming their profile, doing nothing but trying to sell them. If you do use this tactic, my belief is that you should 1) offer real value (not just the chance to sell someone) by allowing the business to claim their profile and 2) allow them to take their profile down.
We started out by advertising on Craigslist, since that was where lawn care providers were looking for jobs. The lead quality ended up being low so we stopped, but I’m sure it works for other industries.
In fact, nearly every company in the ‘gig economy’ seems to be posting on craigslist.
Many say this channel is dead, but my overstuffed mailbox I haven’t checked in a week would beg to differ. It’s quite easy to model out the ROI – (cost of creative + postage cost) / conversion rate – and test to see if you get anywhere close to the response rate you need.
Keep in mind, if you have above a 0.10% conversion rate, you’re doing really really well. And keep in mind someone responding to a postcard will likely require a phone call as well. So you’ll either need a pretty high LTV or high response rate.
Like most things, it’s worth testing. I can think of two friends’ companies who get 4+% response rates on DM. Both of them sell products in very, very old school industries. Maybe that’ll be you.
Remember forums? Well, they’re still alive and well for many industries. Most have been bought up by media companies, who monetize the community in a few ways.
For starters, you can buy banner ads inexpensively. For a bit more money, you can send out an email blast to their list.
But probably the biggest benefit of being a forum sponsor, is that they’ll let you engage in their community as a user. (If you try and self promote your company without a sponsorship, you’ll quickly be banned). Be sure to give first, provide value, and seldom talk about your product. People will notice you, and have a much more positive perception than if you try to sell.
Display / Facebook Ads + Inside Sales
Display and Facebook advertising – both prospecting or retargetting – may not show you a positive ROI out of the gate, but these channels can be used to increase the effectiveness of your sales efforts.
Ravi Parik, CEO of campground comparison site Roverpass, explains how they used display advertising to double their conversion rates on outbound sales calls:
We’re a two sided marketplace that sells advertising to RV parks. One of the biggest issues was that they had been in the industry for so long, but never heard of us. Then we turned on retargeting and prospecting in the Seattle area. At first, I looked at our clickthrough rates, and figured this experiment was a failure. But then I checked our Seattle campgrounds page and saw that it had filled up faster than any other page. Sure enough, our conversion rate on sales was double than other geos. Now we bake the cost of display into
There you have it; don’t call a channel dead until you’ve measure the lift it has on your inside sales efforts.
(For Marketplaces) Leverage your consumer channels
One of the most surprising things when scaling LawnStarter was how many service providers heard about us via our consumer channels.
Typically what happens is a savvy small business owner will start Googling to check out their competition. They’ll stumble across us, learn about us, and think ‘well if I found them, how many customers are going to find them?’.
Many of these businesses will get in touch with you organically, but tailoring some of your landing pages towards the suppliers can only help. Porch, for example, has a call to action for their pros in the nav of all their consumer-facing pages.
If you’re doing awareness advertising via billboards or local radio, that will also have a large impact. In this podcast episode, Casey Winters describes how early on at Grubhub, their outdoor advertising helped increase trust among businesses who had previously never heard of Grubhub.