For too long, the term SME has been bandied around as a broad brush to cover all small and medium sized businesses. It is at best too wide and at worst misleading, as those organisations that classify themselves in this way are hugely diverse.
Even the definition itself can vary. In the European Union, an SME is designated as having no more than 250 employees, while the United States considers SMEs to include firms with fewer than 500 staff members.
Not only does the classification vary, the culture, structure and plans for the future can be vastly different between businesses that by size fit into the SME category.
If your customers are SMEs – which is likely to be the case as 99.5 per cent of British businesses fall into this bracket – developing a communications strategy to engage with this audience can be particularly tricky.
How, then, to go about it?
Having worked with all sizes of businesses over the past 15 years, I’ve thought long and hard about this conundrum – and recently took the step of developing a guide to the five steps businesses should take.
Before embarking on these steps, however, it’s vital that we unpick the complex market that is made up of SMEs.
Understanding SMEs and marketing
Firstly, what do they have in common?
Well, all SMEs have a shared goal: the need to survive and ultimately grow. They also follow the SME life cycle, as defined by the Harvard Business Review.
This cycle outlines the five stages businesses will go through: start up and survival; high growth and maintaining ground; consolidation and stabilisation; mergers and acquisitions; final resource maturity and possible sale.
A good time to communicate with a business is during a life-stage transition, when they will be actively looking for information on how to reach the next level.
When a business is first starting up, you have an opportunity to offer advice and tools to get their business off the ground. At the other end, when a business at mergers and acquisitions, they’ll be looking for advice on how to establish the best ways of working.
Secondly, how do they differ?
Tony Robinson, Executive Chairman of the Business Advisory Bureau Limited, puts this well by saying that the term SME “confuses and misleads by treating substantial, corporately managed businesses as the same as start-ups, owner-managed enterprises, sole traders and the self-employed”.
There is an obvious problem when you look more closely at the group of businesses defined as SMEs and attempt to define it, particularly as the definition of small or large changes by sector. In the PR world, a firm with 100 employees would be considered large. In finance, large means 5,000 employees; 100 is small.
It’s important to consider more than size and revenue. Style and structure also define a business – and again both will naturally shift depending on the sector they are in and stage of development.
In construction, working at a mid-sized business would involve being out on site every day, while in recruitment most of the work is office-based. There’s also a huge void between a 250-person business and a one-man band. They act differently, and view the world in a different way.
With so much variability, it’s important to take time to understand the businesses you are targeting. Read sector publications to understand the opportunities and challenges your target market faces. Define and segment them, thinking about size, style and structure.
Five steps to an effective comms campaign
Now you understand your SME audience, in all its variety, you can start to develop your thinking into a plan for engagement – using the five steps I will now sketch out for you.
Step one is to outline exactly who you are targeting in your marketing. As well as thinking about what we have covered above, consider who the decision makers are. Some businesses may be owner-run. Others will have effective support functions – finance, HR, marketing. The larger, more established businesses may have a board of directors. Depending on the service you are selling, you should identify the challenge it overcomes and who out of the possible stakeholders it is relevant to.
Step two is to personalise the way in which you communicate, which most importantly means ditching any corporate speak. Tell a story. Make it interesting and relevant. The more experienced leader may be more in tune with wider political challenges and issues; others simply want to understand what your service can do for them.
Step three is to engage. Depending on the style of business that makes up your target market, choose your means of communication carefully. For some, a white paper discussing trends will hit the spot; for others a short, fun film will be your way in.
Step four is to educate. Tell them something they don’t already know, so they can see what is possible. Offer them a way to overcome a challenge. Demonstrate that you understand them, and outline why you are a valuable partner on their business journey.
And step five is drive. Identify some form of action that you want them to take. Do you want them to contact you? Read an article? Join you at an event? This will help you to monitor progress and see the impact your communications are having.
SMEs are a huge market, accounting for 60 per cent of all private sector employment in the UK and contributing an annual turnover of £1.8 trillion to the UK economy. Understanding their ambitions and barriers to growth is vital, as is communicating how you and your business can help their goals become a reality.
Competition is fierce, which is why now is the time to make your comms work harder. Be strategic in how you communicate, always thinking about how you can demonstrate your knowledge and offer advice alongside solutions. Most importantly, remember one size doesn’t fit all. SMEs come in all shapes and sizes, so make sure you adapt and remain flexible.
For more on this topic, read our whitepaper Time to Get Focused
Laura Tallett is director, business and corporate at Speed Communications