Small and medium-sized businesses (SMBs) are a vast market segment often neglected in the hopes of landing bigger fish: enterprise customers.
However, SMBs offer a huge opportunity to increase your revenue and market share – all it takes is understanding the art of SMB sales.
In this article, we look at the SMB sales meaning and how SMB customers differ from other types of customers. We then cover in-depth strategies you can use to sell more effectively to your SMB customers.
What is SMB sales?
SMB sales are sales activities targeted towards small and medium-sized businesses. It’s a type of business-to-business (B2B) sales that focuses its target audience on smaller companies.
Note: SMBs are also known as small and medium-sized enterprises (SMEs).
The cut-off sizes for small and medium businesses vary by industry (and which authority you ask). Gartner’s rule of thumb is that small businesses have fewer than 100 employees and medium-sized businesses have 100 to 999 employees.
According to the Small Business Association, there are over 33 million small businesses in the US alone, making up 99.9% of all American firms. This colossal number of companies shows just how much potential this market segment has to generate sales.
How do SMB sales differ from other types of selling?
Understanding the unique needs and challenges facing SMBs can help you develop better sales strategies. For example, they’re often time-poor due to the small number of employees that carry the workload, so salespeople may need to use a more direct sales methodology to capture the interest of key decision-makers.
SMB sales differ from business-to-customer (B2C) sales and enterprise selling in pain points, sales tactics and sales cycle length.
For example, B2C sales focus on the individual needs of customers. The sales cycle can be almost instantaneous, especially when purchases are considered impulse buys (e.g., a snack on the go or a phone case to replace a broken one). B2C selling tactics involve personalized marketing, emotional appeals and engaging one-on-one experiences.
Enterprise sales customers usually have more complicated pain points, like integrating complex software into a proprietary dashboard. Large enterprises have much longer sales cycles with extensive evaluations, approvals and negotiations. The decision-making process includes multiple executives, department heads or specialized acquisition teams.
In contrast, sales cycles and pain points are somewhere in the middle for SMB sales. Decisions might involve only a single stakeholder, like the business owner or sales manager. SMBs also usually have limited resources, are more sensitive to price and seek cost-effective solutions. Their reps should focus on cost efficiency, return on investment (ROI) and how easy the product is to implement.
The benefits and opportunities of selling to SMBs
Selling to small and medium-sized businesses can offer several advantages over other types of customers, such as solopreneurs or large enterprises.
Here’s where selling to SMBs has advantages:
Faster sales cycles over large businesses. Shorter sales cycles mean quicker revenue generation and improved cash flow, enabling salespeople to achieve their sales targets more easily.
Market size and growth potential. SMBs are a large market segment and there’s potential to earn a significant market share of your niche. SMBs can also be more adaptable than larger organizations, which provides growth opportunities.
Relationship-building opportunities. SMBs offer value hands-on support, making it easier to foster long-term partnerships, repeat business and referrals.
Scaling opportunities. As SMBs succeed in business, they’ll grow in size. Establishing strong relationships allows you to become trusted partners and expand your sales as they grow.
Agility and responsiveness. SMBs typically have fewer hoops to jump through than larger businesses. Less complex decision-making means it’s easier for sales reps to tailor their offerings to the specific needs of SMBs.
With SMBs, sales can happen much faster than on the enterprise level. However, they may share some of the same limitations as selling to very small businesses (fewer than 100 employees).
Key challenges in SMB sales
While there are many opportunities in SMB B2B sales, there are also many challenges. Navigating these challenges is crucial for success in the SMB market segment:
Limited budgets. SMBs don’t have as many financial resources as larger companies, making convincing them to invest in your offerings harder.
Smaller average transaction size. Limited budgets and smaller teams mean SMBs will likely purchase less from you than an enterprise. Smaller budgets also mean generating more leads and closing more deals to hit your revenue target.
Lack of brand recognition. SMBs might be cautious with new sellers and solutions, meaning you must show credibility to sell to them effectively.
Selling to SMBs has its unique advantages and disadvantages. If you’ve decided this is your ideal target market, design a bespoke sales strategy to overcome SMB obstacles.
How to create an effective SMB sales strategy
Creating an SMB sales strategy involves several steps, from planning to lead generation to relationship nurturing. Here are six steps to create a strategy focused on SMBs.
1. Define your sales goals
Defining your sales goals is the first step to creating an effective SMB sales strategy. Without this step, you could spend time on activities that take you in the wrong direction or spread yourself too thin by focusing too broadly.
Instead, choose goals that are useful and achievable. Here’s how to do that.
Start with the big picture
Begin by aligning your sales goals with your overall business objectives. Consider your company’s vision and desired outcomes.
For example, if you aim to become a market leader in your industry, your sales goal could be to achieve a certain percentage of the market share.
Make goals specific and measurable
Set sales goals according to the SMART system. For instance, instead of setting a vague goal to “increase sales”, specify a target like “increase sales revenue by 20% over the next fiscal year”.
Break it down
Break down your overall sales goal into smaller, achievable targets. These targets should have a deadline and align with your organizational timeline.
For instance, set quarterly or monthly revenue targets to track progress on your yearly sales targets.
Consider other metrics
Revenue isn’t the only sales performance measure relevant to business success. Consider other sales metrics like customer acquisition numbers, sales cycle length and average deal size.
Plan to have a combination of metrics that focus on sales performance (e.g., deals closed per week or per quarter) and sales activities (e.g., how efficient your team is at following up or scheduling meetings). You should also include customer satisfaction (e.g., how happy your customers are with the sales process and after-sales service).
Be realistic and challenging
If your goals are achievable yet challenging, you’ll encourage your sales professionals to perform at their best. Unrealistic goals can be demotivating so use historical data and market trends as benchmarks when setting goals.
With actionable sales goals, you can provide your sales team with a clear focus. However, it’s important to regularly review your goals and ensure that they are still relevant to your overarching sales objectives.
2. Identify your target customers and product-market fit
The next step is to define and understand your ideal customer profile (ICP) as much as possible.
First, define your product. Work out the unique value proposition of your offering. What problem does it solve and what features differentiate it from your competitors?
Next, conduct market research. Look for information on industry trends and determine customer pain points and preferences. Analyze market reports or run customer surveys.
Third, identify key demographics and segment your market. Establish the common characteristics of your customers, then divide them into different segments. Consider things like industry, average company size and behavioral segmentation. Knowing these factors will help you determine the best way to nurture your customers.
Finally, refine your ICP. Reach out to existing customers and gather their opinions. Ask them about their challenges and goals and see how your product addresses them. This feedback will help you better understand your product-market fit and refine your ideal customer profile.
A detailed ICP will help you finetune your sales approach and attract the best customers for your product. A customer relationship management (CRM) system like Pipedrive can help store this data in one place so you can always access it quickly.
Learn more about how to build your ICP and download a free template in our article:
3. Consider SMB lead generation tactics
A solid B2B lead generation strategy is vital for attracting potential customers and converting them into leads. Here are some lead generation tactics to consider:
Content marketing. Create high-quality content that addresses the challenges your target audience is facing. It can be blog posts, articles or ebooks. Use SEO strategies to appear first on search engines when sales prospects search for related keywords.
Social media marketing. Leverage social selling by creating content that resonates with your target audience. Social media platforms also offer targeted advertising to promote your content to specific audiences.
Email marketing. Build a list of prospects by offering incentives in exchange for their email addresses. Then, send personalized emails to highlight your offerings and convert your leads into customers. Email marketing software like Campaigns by Pipedrive can help improve your campaigns with a drag-and-drop builder, analytics and filtering features.
Referral programs. Create programs encouraging customers to refer your business to their friends and families. For example, you could offer incentives for successful referrals like exclusive discounts.
Networking and partnerships. Attending industry conferences and local business events will expand your network. You’ll be able to build relationships with businesses and influencers who can refer leads to you (or offer other benefits).
The effectiveness of these tactics will vary depending on your industry, target audience and resources. Keep tracking your lead generation efforts to work out which tactics work best.
4. Qualify your leads effectively
Next, you’ll want to make sure that you have effective lead qualification strategies. Qualifying leads is vital because it ensures you focus on the most promising customers.
Remember to qualify leads based on fit and need. Effective lead qualification is where your ICP (and demographic and firmographic data) comes in handy. Gather information about your potential customers like size, industry and annual revenue.
With data in hand, it’s time to develop a lead scoring system to rank leads based on their likelihood to convert into customers. Assign values to different factors, like whether they’ve engaged with your website or responded to email campaigns.
For example, imagine a company that sells software to SMBs. It could score leads based on whether a company falls under the 500-employee mark, how closely the prospect’s industry aligns with their software and whether the contact is a decision-maker or a low-level employee.
Close alignment of your sales and marketing teams will also help as it will make it easier to qualify and hand off leads. To achieve this, define clear processes for passing leads from marketing to sales. Then, have your sales team provide feedback on lead quality to improve targeting efforts.
Lead qualification strategies ensure that your sales team focuses on the leads more likely to convert. With constant refinement, you can create a qualification process that saves time and increases revenue.
You should also consider lead scoring software. For example, Pipedrive can help you manage and prioritize leads effectively with automatic workflows and real-time activity notifications.
In fact, this is exactly how Pipedrive helped boutique Executive Search firm Key Search:
“Pipedrive helps us with repetitive work. It gives us a little nudge and reminders on what to do.”
5. Nurture leads, overcome objections and close deals
How you nurture leads, overcome objections and close deals are essential factors in an SMB sales strategy. Below, we’ll describe how to approach each stage of the customer journey.
Start by crafting personalized sales pitches to ensure they resonate with your customer’s pain points and business challenges. The best way to do this is to tailor your outreach messaging and highlight your value proposition to your customer’s needs.
For example, imagine a company that sells a fitness app. It finds that a major customer segment is busy professionals. It then develops a value proposition showing how the app can provide quick yet impactful workout plans that fit a busy lifestyle.
It’s also important to maintain regular communication. Stay in touch with leads through personalized emails, informative email newsletters and other targeted content. Don’t forget to set reminders to follow up with leads after an initial interaction.
When you get to the sale, you’ll inevitably experience objections. To overcome sales objections:
Use active listening. Pay close attention to the prospect’s objections and concerns. Show that you understand and empathize with their viewpoint.
Address their concerns. Demonstrate that you care by providing answers and alleviating their concerns. Highlight certain product features and how they can help overcome your customer’s problems.
Provide social proof. Social proof can help build credibility and alleviate customer doubts. You could share testimonials or references from satisfied customers with similar objections.
Once you’ve convinced your lead of the value of your product, it’s time to close the deal. Reiterate your product’s value – summarize the key benefits your offering provides and highlight how it meets the prospect's needs.
Consider creating a sense of urgency. Encourage the prospect to take action by offering limited-time discounts or exclusive packages.
Finally, provide a clear call-to-action (CTA). State the next steps and guide the prospect through the closing process. Provide multiple communication channels, like phone, email or live chat, so they can reach out in their preferred way.
6. Leverage technology to boost SMB sales
There are countless tools that help automate sales processes and improve operational efficiency. Here are some of the main categories:
CRM software. Customer relationship management software is vital for modern selling. For example, Pipedrive can help track and enhance customer interactions with features like workflow automation, lead management, sales forecasting and marketing capabilities.
Sales enablement tools. Tools like automation software, email tracking and document management platforms can streamline your sales processes. These tools automate repetitive tasks and provide insights to optimize sales efforts.
Data analytics and reporting. Data analytics tools track and analyze sales metrics, customer behavior and market trends. This information enables data-driven decision-making, helping identify opportunities for improvement. For example, Pipedrive’s Insights feature helps companies identify winning strategies and create powerful campaigns.
Pipedrive is a sales-focused CRM with both sales enablement and reporting features. You can also add on powerful marketing, project management and lead generation functionalities as your business needs them.
Your chosen software should let you customize your processes, pipelines and activities. It should also integrate with your other tools, including email marketing and customer service solutions.
5 best practices for selling to SMB customers
Now that you have a detailed SMB sales strategy, it’s time to start selling. Keep these five best practices in mind as you go to ensure the best possible results:
1. Keep it simple. SMBs are time and resource-poor so the more straightforward and streamlined your buying process is, the more likely you are to close deals. To minimize friction, provide a clear pricing model, concise contracts and a streamlined onboarding process.
2. Consider what incentives you can offer. Since SMB buyers often have a small budget, they can hesitate to make a purchase decision. Incentives like discounts or free trials can lower the perceived risk and convince prospects to buy your offering.
3. Offer self-service where possible. Make the sales process as easy as possible by letting SMB owners research and buy your product in their own time. Self-service features like a detailed customer portal, knowledge base and chatbot can go a long way.
4. Build a referral program. Small businesses often form a close-knit network, meaning it’s worth targeting referral sales. You can get new clients through word-of-mouth marketing by offering a referral or partner program.
5. Assess and reassess your strategy. Things change and your once-powerful strategy might become ineffective over time. Regularly assess your SMB sales strategy based on performance metrics, market feedback and emerging trends. As you gather insights, adapt your approach to ensure ongoing success.
Final thoughts
SMB sales strategies take time to develop but are worth the effort. Start with clearly defined sales goals and ideal buyer personas, then develop powerful lead generation and management processes to target those customers.
Once you have a strategy that works for you, measure your results and refine your processes to land more sales.
