As a startup or scale-up, you know that B2B and B2C marketing are worlds apart. But here’s the thing: many startups I’ve been chatting with have yet to fully grasp how crucial it is to approach Enterprises and Small and Medium Sized Businesses (SMBs) with different mindsets.
While both are lucrative markets, understanding the key differences is the secret sauce for crafting a winning marketing strategy.
Whether you’re eyeing Enterprise Accounts to tackle economic downturns or targeting SMBs to amp up your go-to-market and ROI diversification, you must consider some disparities in your plan.
In this article, we’ll dive deep into it, providing startups and scale-ups with the insights they need to navigate these distinct waters effectively
Persona and touchpoints
One of the main differences between SMBs and Enterprises is who you will target. When it comes to Enterprise accounts, you’re diving into a world of diverse departments, decision-makers, and hierarchies. As a result, it involves multiple stakeholders.
According to Gartner:
"The typical buying group for a complex B2B solution involves six to 10 decision makers"
These people come from different departments and have unique needs. That means your messages must hit home with each of them and address their shared pain points. It’s a complex game that requires a deep understanding of your various personas.
On the flip side, SMBs operate on a smaller scale with fewer layers of decision-making. They’re agile, adaptable, and make purchasing decisions swiftly. Here, you want to laser-focus your messaging on your persona—the one that will truly resonate with them and drive results. Understanding your persona inside out is crucial, as you’ll need to deliver a personalized approach at the right time, keeping things simple and efficient.
Sales cycle’s duration and complexity
As a result, the decision-making process is much more complex in Enterprise Sales. Having worked for both segments, SMBs’ sales cycles are shorter and easier to close. After all, the more people involved, the more complexity arises. If SMBs usually have a linear buying journey with a need identification, solution consideration, and purchase, Enterprise accounts decision process is a more complex journey.
Gartner illustrates it in the graph below.
As processes are more developed and involve a complex web of stakeholders, including executives, managers, IT departments, and procurement teams, the decision process takes time. Your sales cycle is usually much longer (3-18 months, depending on your business). Startups must be prepared for extended evaluation periods, intense negotiations, and thorough due diligence.
SMBs operate on a smaller scale with a tight-knit circle of decision-makers. This means faster decision-making. Founders and small teams often play a direct role in evaluating and selecting solutions. They’re nimble, agile, and want things done pronto. As a result, they crave simplicity and clarity in their sales journey. So, give it to them! Streamline your sales processes, ensure crystal-clear value propositions, and provide a smooth sales path. Doing so will answer their questions faster and increase your conversion rate.
Marketing-Sales organization
As a result, the marketing-sales organization can be pretty different depending if you’re targeting SMBs or Enterprises. As Enterprise requires a longer sales cycle, seamless coordination between marketing, BDRs, and Senior Account Executives is required when SMBs can be targeted through self-conversion or junior sales. But hold up, that doesn’t mean self-conversion is off the table for Enterprise accounts. It just means that as those accounts grow, personalized sales become key. That’s precisely why PLG companies focus on SMBs and ramp up their sales team when targeting Enterprises.
Different budgets and needs
Complexity awaits Enterprise accounts, but so does the promise of higher revenue!
With substantial resources at their disposal, Enterprises have more flexibility when it comes to budget allocation. They are willing to invest in comprehensive solutions, but here’s the deal—enterprises demand more. They crave exceptional value, customization, and ROI.
SMBs typically have limited budgets but massive potential!
These budget-conscious businesses are often more cost-sensitive. They seek solutions that provide immediate value and are within their financial reach. When targeting SMBs, the magic lies in affordability, simplicity, innovation, and lightning-fast onboarding. Show them the value right off the bat. Startups targeting SMBs need to emphasize quick onboarding to demonstrate the value quickly and attract their attention.
Retention and loyalty
Enterprise accounts usually churn less or less easily. They’re in it for the long haul and prioritize lasting partnerships. They value reputation and reliability, so it’s crucial to establish trust and credibility. Showcasing your proven track record will set you apart from the competition and increase confidence. In the long run, you’ll also develop a personalized relationship with them, keeping them satisfied and increasing upsell potential.
SMBs, on the other hand, often seek personalized attention, exceptional customer support, and quick problem-solving. They’re quick to switch if dissatisfied and have no qualms about testing out your competitors. You need to build rapport and offer a truly personalized experience to win their hearts. It’s all about winning their trust and loyalty through top-notch service and quick problem-solving.
Tailored marketing approaches
When it comes to marketing, differentiating between Enterprise accounts and SMBs is key.
B2B Marketing to Enterprise Accounts requires a strategic approach to establish trust.
For enterprise accounts, a strategic approach is vital. You need to establish credibility and expertise. As a small startup competing with bigger brands, corporate marketing like Press Relations (PR) or Analyst Relations (AR) becomes crucial. With more people involved, developing multiple touchpoints is a must to secure opportunities. Integrated marketing campaigns, Account Based Marketing (ABM), complex go-to-market strategies per verticals, and content nurturing usually take center stage. Offering a mix of channels to address different personas at the right time and throughout the decision-making process is crucial. As well as understanding the unique challenges and objectives of decision-makers and finding common traits among them. In fact, since Enterprise involves multiple decision-makers, the need for personalized content multiplies to address their specific pain points.
Gartner states that:
6 to 10 decision makers‚ each armed with four or five pieces of information they've gathered independently and must deconflict with the group."
Winning B2B companies provide unique messages to decision-makers based on their needs, profile, behaviours, and interactions. With more people involved, enterprise accounts require increased content creation and investment.
Develop thought leadership content and showcase Enterprise customer success stories. As multi-touch campaigns are necessary, relying solely on an original source won’t provide sufficient insights into channel performance. You’ll need multiple channels to drive awareness, nurturing, and conversions throughout the complex sales process.
B2B Marketing to SMBs requires a targeted and results-driven approach to showcase rapid value.
Now, let’s shift gears to SMBs. They require a targeted and results-driven approach. Showcase innovation and rapid value. Keep things simple and straightforward, focusing on tangible benefits, cost-effectiveness, and testimonials from satisfied SMB customers. Social media, digital advertising, and partnerships with industry influencers are favoured to create awareness and drive conversions. Original source data becomes more relevant for understanding and scaling your strategy.
Establish a B2B marketing strategy aligned with your objectives.
When crafting your marketing strategy, start by understanding your objectives and goals. Develop tactics that align with these objectives. A huge difference between Enterprises and SMBs lies in quantity. Targeting enterprise accounts means focusing on fewer accounts with higher value potential. To close the deal, your approach becomes more complex and strategic, understanding the account’s intricacies, interactions, influential stakeholders, champions, and more. Tight collaboration with the sales team is crucial for strategic thinking and approach.
On the other hand, targeting SMBs requires a quantity-focused strategy. Deeply understand your persona to address their needs and pain points, developing a scalable machine for better conversions. Stay closely aligned with the product, especially in PLG companies, to ensure conversions and stay attuned to evolving persona needs.
Different metrics that matter
Sometimes underestimated, having the right set of metrics and analyzing them correctly is key to making winning decisions. I’ve witnessed many startups looking at the wrong metrics or misinterpreting them, leading to disastrous decision-making.
When targeting different customer segments, it’s crucial to consider the metrics that truly matter and how to interpret them.
In the Enterprise world, your focus shifts to metrics like pipeline generated, average deal size, number of qualified opportunities, and demo or contact requests. On the other hand, SMBs prioritize metrics such as website traffic, number of trials, churn, and retention. If you’re focusing on SMBs, aim to avoid what I call bubble growth—superficial growth driven by increased account conversions through forced marketing tactics like paid ads, which often result in high churn during tough times.
These metrics hold immense importance for both segments, but their interpretation and significance level may vary.
For example, let’s look at a widely discussed metric: the CAC (Customer Acquisition Cost). In the Enterprise world, CAC tends to be higher than SMBs But does that mean your strategy is failing? Absolutely not! Remember, Enterprise accounts hold greater value and sales potential, including upsell and cross-sell opportunities. So, your CAC analysis needs to adapt as you include one segment or the other.
Here’s the golden rule: Differentiate your metrics when targeting a new segment. This way, you’ll avoid mixing two completely different worlds. To better understand which strategy is performing, compare the CAC ratio—how much revenue you generate per dollar invested. This invaluable insight will guide you toward the right path to success.
Conclusion:
Startups venturing into the B2B marketing realm must recognize the distinct nature of Enterprise accounts and SMBs. This knowledge will be your secret weapon in crafting strategies that resonate with both segments.
By understanding the differences in scale, budgets, relationships, decision-making processes, and marketing approaches, startups can tailor their strategies and effectively engage both segments. Remember, success lies in speaking directly to your target audience’s specific needs, pain points, and aspirations, regardless of their size.
Embrace these differences, refine your messaging, and watch your startup thrive in the ever-evolving B2B landscape. If you need support in doing so, Upki can help you navigate these segments by developing the right approach and supporting you in the transition. Contact me for more information.
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