I’ve built a career on helping entrepreneurs and small businesses navigate the market through a combination of tough love and real-world business insight. It’s not always easy to hear the advice that will make your company successful, but without that kind of straight talk and out of the box thinking, chances are you will just keep on making the same mistakes over and over again.
But you wouldn’t be alone. At Microsoft Inspire, I spoke about why most tech companies fail when selling to small businesses and what they need to do to succeed instead. On the latest episode of the newly released Hacking the Future podcast series with Microsoft Partner Network, I chat with host Rachel Braunstein about what mistakes I see most frequently in the partner ecosystem. Here are just a few of those mistakes that I’ve seen partners struggle with over the years, and what you can do instead.
1. Not Understanding the Small Business Customer
It’s actually amazing that so little is known about selling to small businesses because so much of our economy is made up of small businesses. On a global scale, over 99% of all businesses are small businesses. But the challenge remains that they work in all kinds of very disparate verticals, from IT services to dog walkers, lawyers to dentists, accountants to personal trainers. And if you’re a real estate agent, your business is obviously very different from that of a personal trainer. So, a tech company marketing to the small business space is aiming at too broad a market to really land a valuable service.
The solution to this is very simple, but not necessarily easy. It’s about differentiating yourself and focusing in on a particular type of small business or industry vertical, then getting to know them in depth so you can position your services in a way that is meaningful and valuable to them. Once partners are able to unlock their small business customer niche, there is a serious opportunity there.
2. Selling Features Over Business Solutions
As a tech company, it makes sense to focus on all the amazing things you can do. The products and the features are powerful and meaningful…to you. As a small business owner, your customer is obsessed with one thing – getting the job done. Until that time when the technology (or the lack thereof) gets in the way of them getting the job done, technology is out of sight, out of mind.
To overcome that language barrier, look at your technology offerings from the perspective of your customer. How will your offerings solve a specific business problem? How will it make your customer more money? How will it make them more secure and more productive? How will it help them do better work? These are the things that matter most to the small business market, and if you are not able to sell your features as real-world business solutions, then you will struggle to connect with SMB customers.
3. Failing to Sell to Existing Customers
For such an obvious business opportunity, I see this mistake time and again. Your existing customers are one of your greatest resources for future sales, but you have to take the time to reevaluate their needs and your offerings. A great example I like to bring up when I talk about this challenge is how I, as a small business technology customer myself, had to go to my IT provider and ask about what I could be doing to increase my digital security. While I did get what I needed, it is such an obvious opportunity for partners to make the up-sell that it can’t be overlooked.
As a small business customer, I trust and look to my IT service provider to tell me what I need. Whether it’s Office 365 or Advance Threat Protection, chances are that your customer doesn’t fully know what solutions are available or how reasonably priced they are in the SaaS pricing model. When you take the time to educate your customer, they will reward you with more business.
Like I said before, selling to small businesses isn’t complicated, it’s actually pretty simple. But it takes time and commitment to know your customer and to show them how you can make their lives easier through better technology.
For more discussion about succeeding in the small business space, tune in to the latest episode of Hacking the Future with the Microsoft Partner Network. Subscribe for weekly downloads of amazing conversations with industry experts and thought leaders on the cutting edge of business and technology. Download past episodes of the Microsoft Partner Network podcast on iTunes, SoundCloud, iHeartRadio, Google Play Music, and YouTube.
And don’t forget to leave a review!
Chat more about the SMB market with the Microsoft Partner Community here.
Rachel Braunstein: Hi, I’m Rachel Braunstein and this is Hacking the Future with Microsoft Partner Network. In this new series, we’re here to help you futureproof your business.
Carol Roth: When you’re a small business owner, you are obsessed with your own business. Nowhere in that head space is hey, I should be thinking about technology unless your technology is literally on fire. So, having that deep expertise allows you to connect with influencers like industry organizations who can bring you in and put you in front of a whole slew of people in that industry. And I think it also makes you better adept at understanding how technology can inform those business. The reality is that everything is very simple but it doesn’t mean that it’s easy.
Braunstein: From blockchain to social selling, we’re exploring how technology is reshaping business as we know it.
Alright. Welcome back to the Microsoft Partner Network podcast. I’m really excited to have Carol Roth back on this channel. She was here with us at last year’s Worldwide Partner Conference. Now Microsoft Inspire, that’s where we are right now. Here at Microsoft Inspire she did a session on why most technology companies fail when selling to small businesses and how you can be a success. So, that’s what we’re going to talk about today, Carol. First, who are you? Introduce yourself to our audience in case they don’t know who you are quite yet.
Roth: Who the heck am I and why am I back on this podcast again? First of all, great to be here with you. And when I introduce myself, I usually say a couple of things. I am a recovering investment banker. It is a 12 step program. I’m stuck somewhere on step 11 or so. I am a noted small business expert on worldwide basis and I advocate on behalf of small businesses because they are literally the backbone of the global economy. I also play myself on television, am an entrepreneur, am a bestselling author, and have my own action figure. So, between all those things, that should give somebody who’s listening a good sense of who I am.
Braunstein: Okay, what is this action figure?
Roth: You’ve never seen my action figure?
Roth: I’ll have to get you a Carol Roth action figure. So, when I wrote my book, the Entrepreneur Equation, there is this long sordid tale. They had bookstores back in the day—I’m not sure if you’re familiar with these things called bookstores.
Braunstein: Just a little bit.
Roth: And when my publisher took out my book to the buyers from the bookstore, it had a picture of me on the cover and the buyer from one of the major chains said, you know, she’s a little too attractive to be taken seriously as a business author so you either need to ugly her up or get her off the cover. So, knowing me, you can tell that landed really well when my publisher brought back that information to me, and so basically, I said not only am I sticking on the cover but I’m going to basically create something that’s like the biggest FU possible. I can say that on the podcast, right?
Braunstein: Yes, definitely.
Roth: So, to the bookstores and show them. And so, one of my clients is a toy company and I had them create a wonderful action figure that actually does look like me and we used it as a marketing premium. So, if you bought a certain number of books, you got the doll for free. The better that you knew me the more books you had to buy in order for me to do that. So, yeah, it’s out there.
Braunstein: Pro marketer over here.
Roth: If you do a search online for Carol Roth action figure, be really, really careful because there’s some scandalous things that people have done with it. I cannot speak for that. Once it’s out of my hands there’s nothing I can do.
Braunstein: That’s a good depiction of the diverse personality you have, Carol. One of the things that you’re so passionate about—I mean, you’ve been working with the office team on the small biz academy, is small businesses. What’s going on? What are corporations doing wrong?
Roth: So, it’s so interesting because small business comprises so much of the economy here in the United States. It’s over half of all jobs that are created are from small business owners and over half the sales. On a worldwide basis, over 99% of all businesses, all businesses worldwide, are small businesses. But the challenge is that they’re in all of these very disparate vertical markets so you’ve got everybody from IT service providers to dog walkers to dentists to lawyers to accountants to personal trainers to real estate agents. So, obviously, if you’re a real estate agent, your business is very different than let’s say a dentist. That being said, when you’re a big tech company that sometimes—or even a small tech company—you say I’m going to market to small business. But the person who’s on the other end of that is not really identifying in that manner. So, that ends up being a big challenge. And then another challenge is that so many tech companies like to sell features over business solutions. And it makes sense. You’re a tech company. You’re developing these amazing features around security and around productivity and whatnot. But when you’re a small business owner, you are obsessed with your own business and you’re obsessed with things like how do I grow my topline? How do I grow my bottom line? How do I get access to capital? How do I save more time? Nowhere in that headspace is hey, I should be thinking about technology. So, unless your technology is literally on fire—like it’s blown up, you’ve had a cyber-attack, whatever it is—you’re not thinking about technology. So, it’s really incumbent upon these technology companies to flip the switch and start selling business solutions. They’re consultants. They’re business solution providers. Technology is the mechanism, the way they do it, instead of trying to sell technology to somebody who doesn’t want to hear that message.
Braunstein: So, who do you—what are some examples of companies doing a good job, would you say? Or you could do the opposite, a really bad example.
Roth: So, it’s interesting. I think there aren’t enough companies on a broad basis who do a really good job at selling to small business which is why I’m employed, why we keep having these discussions. If you look at a Microsoft partner, I think there are a couple of partners who stand out to me who are doing really, really great jobs. Groups like Ryan Tech that focus on auto dealers. Groups like Reed Wilson of PTG, formerly Palmetto Technology Group that focus on non-profits. Guys like Eamon Moore out of Ireland from EMIT that really get in and look at things from a business solution standpoint. So, I think there are actually examples within the Microsoft Partner ecosystem of people who are doing it the right way. But they do a better job on a smaller basis then I think some of the bigger companies do.
Braunstein: And do you think that’s because—you mentioned Ryan Tech, that’s more focused on the auto industry—it’s getting a little bit more focused on a certain vertical?
Braunstein: That was definitely something that came up today in the keynote with Judson and Toni Townes-Whitley, our huge emphasis here at Microsoft is going to be a lot around industries.
Roth: Right. So, going back to where we started this conversation, if you’re an auto dealer, you think of yourself as an auto dealer. And whether your problems are similar or not to a dentist or a dog walker, you’re probably not searching for help that’s that broadly defined. So, if you’re somebody who’s putting out thought leadership, whether it’s in social media, whitepapers, your own blog, being quoted in other people’s blogs, writing an e-book, writing an actual book, whatever it is around a certain industry, people want to hire the person who wrote the article or was quoted in the article, not the person who read the article. And so, having that deep expertise allows you to connect with influencers like industry organizations who can bring you in and put you in front of a whole slew of people in that industry. And I think it also makes you better adept at understanding how technology can inform those businesses. I always joke around and say Office 365 is like the gateway drug for small business. So, that’s the lead in. That’s the easy one to get in and everybody obviously looks at the different Office apps as best of breed solutions. But as you start to get in and you can understand the business and what the different analytics look like, something like Power BI becomes really powerful and it makes it easier for you to make that sale or make an Azure sale or whatever it is when you have that deep expertise. The other thing, not only on the thought leadership side but from an intellectual property standpoint, folks like Ryan Tech have intellectual property folks. Like, you have intellectual property that focuses on those verticals. So, when somebody has the decision to buy technology when they’re making it from any sort of potential partner, what’s going to set you apart? And what’s going to set you apart is that IP that you’re layering on top of some of the Microsoft solutions that really, again, helps the small business in a special way and demonstrates your understanding to that business.
Braunstein: What do you think with Microsoft 365 that came out that does have greater focus on small business? What’s your take on some of those developments?
Roth: I think it’s fantastic. I mean, certainly from a small business owner’s perspective, it’s so disruptive to their workflow, at least from a perception standpoint. It may not be a reality but the perception of trying to get their head wrapped around technology solutions and making time to learn and making time to have them implemented is a big leap. So, the more things that can be bundled together, the easier of a sell it is than having to say okay, we’re going to do this one day and we’re going to do this another day. The value that a small business owner gets—when you think about something like your cellphone bill and how much money you’re spending a month just to get cellphone access, the amount of things you get for your business for a fraction of the price is absolutely an incredible value. And then, again, I think from a partner perspective it does become that gateway for them to establish the relationship and go back and then sell. One of the things that a lot of businesses but particularly tech businesses are bad at doing is selling to their existing customers who they already have a dialog with and who already love them. And I’ve used examples of partners that I’ve worked with where they have made the upsell but it’s usually after I contact them about something where they should have just been contacting me and said hey, you need this, you need this and I’d be like great, sign me up for it. In fact, Eamon Moore was actually talking about something like the advanced threat protection for Outlook. And cyber security is like the biggest headlines all over the news and I didn’t even know about that because I work so closely with Microsoft. For two dollars, whatever it is, additional a month per user, that’s a no brainer. So, again, it may be a little bit here and a little bit there but eventually then you start building up that portfolio with the existing client and it’s pretty easy to say hey, this is going on in the news. Just so you know, we have a solution; we’d love to chat with you about it. And everybody who has a relationship with a trusted technology provider is going to be open to that conversation.
Braunstein: Right. What do you think makes the small business customer or buyer different? What is so different in that?
Roth: Oh, boy. How much time do you have, Rachel?
Braunstein: Well, why is it so hard? Why can’t we get it right?
Roth: It’s so difficult because there are so many of them. In the United States, there’s 28 million. 22 million have no employees; 6 million have employees. On an international basis, the stats go anywhere 100 million up to I’ve seen some UN related adjuncts do 300 million for really microbusinesses, some guy with an orange on the side of the road, whatever. Whatever it is there’s a lot of them. They’re all in these different verticals and they’re very heads down in running their business. They don’t spend enough time working on their business because they’re working in their business. So, they aren’t out there kind of going, hey, here I am, help me out because they’re like well, I’m just going to focus on this. You have to kind of come to them and interrupt their flow or work with an influencer organization or some way that you get a chance to reach them. So, that’s kind of why it’s so difficult just because of the sheer scale but at the same time, them all having so many differences in their businesses. And then I think on the partner’s side there’s a huge opportunity. People haven’t really cracked the nut on these smaller businesses whether it’s the solopreneur or maybe under 10 seats, but how do you service them at scale? And for somebody who’s able to create a more automatized scalable way to deliver everything from training to whatever it is that they need is going to make a fortune because there’s a huge, huge need there.
Braunstein: Right. But you need scale with that, right?
Roth: You do. You do.
Braunstein: Because we’ve talked about pricing a lot and Kevin Conroy talks about that. But he says you’ve got to be at like 10 dollars per user per month and you’ve got to get a lot of them. So, if you’re looking, if you’re a small business that’s trying to serve another small business that’s 10 people—I mean, you’ve got to get massive scale.
Roth: You do.
Braunstein: And that’s really where the global nature and technology can kind of be an assistance, right?
Roth: Absolutely. Absolutely. And I think just thinking outside of the box, I mean, small business owners who are small would be receptive to doing training with 15 other small business owners. They don’t need to do it one on one. So, I think it’s rethinking the model on the way that you approach and deliver product services and just overall service.
Braunstein: Now, what do you think is the best way to approach—because what you’re saying—they’re kind of jack of all trades, a lot of small business owners. They’re trying to make revenue. They’re trying to cover their cogs. I mean, we’ve been talking a lot about social selling. We’ve been talking a lot about sales enablement, transformation. Jill Rally was here. We did a podcast with her. So, are those some of the good mechanisms to tap in?
Roth: Absolutely. I mean, I think that just simple content is underused as a mechanism to establish thought leadership, to create an SEO profile. Things like tweaking your website. So, few of the partners who I’ve talked to and say oh, what do you do? You go to the website and there’s all this industry buzz and jargon but it’s not the way that a small business owner would search. It doesn’t talk about what geography you serve. A lot of them are focused on who’s in my neighborhood that can help me. It’s not vertically focused. It doesn’t talk about the business solution. So, again, yes, you do Office 365 integration or migration or whatever, but what does that mean to me? How does that help my business? So, it’s changing, again, the way that you’re portraying the information to here’s how we help your business. And testimonials and all of those great things alongside blog posts, alongside being quoted. I think those are all really great ways to start to reach the small business owner and also to create the credibility because sometimes when you reach them they want to do more research and they want to understand if you’re the right person and so that kind of creates that footprint as well.
Braunstein: So, where do you kind of see things going? So, if we had this conversation in five years—hopefully we’re not having—hopefully the topic of your session isn’t why companies are failing with small business.
Roth: You know, it’s funny. I would be—I’m a contrarian. I don’t know if you knew this about me or not and I like to keep it real. And I bet we’ll have the same conversation five years from now because five years ago I had this same conversation. And even though all the tools are there, you still have the discipline to get things done. I mean the reality is that everything is very simple but it doesn’t mean that it’s easy because you actually have to have the discipline to do this and to do it over and over again and it’s the consistency that wins out. And as people start to look at their bottom lines and see the impact of oh, hey, I’m making this spend here, they have to look at it not as an expense but as an investment. And so, when you’re making a capital investment, you would expect a three to five to seven year payback period. You need to reshift the way that you’re looking at your marketing investment. And if you’re making it in the right way, you should be getting a really good return on that investment that allows that cycle to continue. And I think if you’re in the technology field, you’re probably not a marketer because otherwise you would have gone into the marketing field. You love technology and so my guess is that there will be these standout groups that either bring somebody in internally or hire somebody externally or use marketing or content as a service or whatnot and continue to lead the pack and everybody else will struggle. And so, that means there’s a great opportunity that if you want to set yourself apart, just by doing it you will set yourself apart.
Braunstein: So, is there a certain process, a way of thinking or some key tips for our partners if they’re thinking about approaching the small businesses? What would that be?
Roth: Yeah, I think you need to have a cycle. You need to do things that create awareness. So, that is that thought leadership, whether it’s in blogs, being quoted, doing social media in conjunction with SEO, in conjunction with your paid Facebook ads, all those kinds of things that create awareness, and then have a mechanism to do lead generation as well. So, it’s great to be aware. At some point, you need to make an ask and get them into the funnel. It’s very interesting, a lot of partners drop the ball once they have somebody who’s in the funnel because they’re so busy focused on servicing their existing customers that they’re not following up and so people end up falling out of that funnel. So, it’s creating your own systems because we all know the cobbler’s kids have no shoes, right? So, busy servicing everyone else you’re not doing it for yourself. So, put those systems in place for yourself on a customer relationship management basis so that you’re doing the follow up. And then when you have those customers, continue to nurture them. Continue to put out great content. Make them feel like they’re important. Ask for more business. If you do nothing else, just call up your existing customers and tell them more things that they can buy from you. They will listen. You absolutely need to do that. And then I also think that you need to put a referral program of some sort in place because most small business owners tend to know other small business owners like themselves. They’re in an industry organization, they’re part of a group. They just happen to know other people via social media, LinkedIn, whatever it is. And so, a lot of people think they’re making an ask, like hey, do you know anyone? Great, if you do just refer us. But if you create a more structured program and a way for them, a mechanism to say can you do this now and can you give me that lead and make it more concrete, that’s going to help as well. And it just ends up going in a cycle. And then the other key tip is to do it consistently. You can’t just do it once and say okay, I did it and now I’m going to go run my business. Like everything else, part of business is just that repetition—the lather, rinse, repeat over and over again. So, it’s those that have the dedication to the consistent blocking and tackling on that front that are going to see success from it.
Braunstein: So, it seems like you need at least one person in your organization to be thinking pretty strongly on that marketing, content marketing, and sales enablement with the nurture.
Roth: Absolutely. If you’re not thinking about it in a hands-on way, you need to be overseeing outsource providers that DIFM, do it for me. So, there’s do it yourself, there’s do it for me. And it doesn’t really matter which way you go. Obviously one of them is more time intensive and you have to get up a learning curve. The other one is more cost intensive so it just kind of depends what’s more important to you in your own business priorities. They both can be very effective. But there needs to be somebody that says this is a discipline, this is part of our business process.
Braunstein: Alright. So, Carol, what’s on the horizon for you? What’s going on?
Roth: Well, you know I have my hands in a million different things but my biggest project that I’m working on is a legacy planning product called Future File that the first version and first products are coming out in the August or September of 2017 timeframe. And Future File, which will be at FutureFile.com, is a legacy planning product born out of my own personal experience with losing a bunch of loved ones. And basically, after having three major deaths in the family, my father, looking at my sister and I going if something happens to us, you’re not going to know what to do. And so, he gave us all this information. And lo and behold, in 2013, he was in a freak accident and we had to go and pull out all this information. We had to make an end of life decision and then we had to take care of the disposal of the body and then we had to wrap up his personal affairs. And had we not had access to all this information, we probably would have had a lifetime of grief. Like, did we make the right decision or not? We would have spent more than $10,000 additionally on like the fanciest, best, and whatever because Dad just passed away and we don’t want to cheap him if we hadn’t known what was important to him. And it would have just taken us so much time. So, we’ve actually productized this in a way that we ask you a bunch of questions and we go through instructions and you put down your wishes and you file a bunch of information and then what you’re left with is a roadmap and access to all the information for your loved ones to follow if you become incapacitated. So, it could be dementia, it could be an accident like my father, or if you pass away. And having been through that before, so many different times, people don’t realize how important it is to have everything together because it’s their loved one’s biggest time of need. So, funny enough, we decided we’re the first software company to launch without a software product. So, we have a hardcopy version first and then the software should be launching later this year. So, just about headed into beta with that. So, that’s the big passion project right now. It’s something our dad did for us because he cared so much about us so it’s now our opportunity to give back to other people and help them help their loved ones.
Braunstein: Very cool. You’ve got such a diverse–.
Roth: I know. From action figures to death. A to D, I’ve got the whole thing covered.
Braunstein: Well, thank you so much for being with us again, Carol.
Roth: It was my pleasure. And it’s so great to be able to work with Microsoft and with the Partner organization and to continue to encourage their success. Such amazing opportunities to support people who are small business owners in many cases and help them support other small businesses that make up the backbone of the worldwide economy.
Braunstein: Yes, they do. Thanks, Carol.
Thanks for listening to Hacking the Future with me, your host, Rachel Braunstein. You can follow me on Twitter at rkbraunstein and follow us at MS Partner. Check out our show notes for more information from today’s episode and don’t forget to subscribe and leave us a review.