The SMB selling process is very different from enterprise selling. That is a very important distinction for anyone who wants to venture into b2b sales. A common notion among business people and novice sales people is that enterprises are just scaled-up versions of small businesses, or vice-versa. But this couldn’t be farther from the truth. SMBs and enterprises have different characteristics, distinct priorities, unique clientele, different needs and pain points. Hence the sales process followed by each to address these pain points is also quite dissimilar.
In this article, we will explore what defines SMBs and enterprises, and compare the b2b sales process for both. The last section in the article also explores the rules of mounting a b2b sales strategy for both enterprises and SMBs.
But first, some definitions.
What are SMBs?
According to Gartner, the two main differences between SMBs and enterprises is the number of employees and the revenue they generate annually.
Small businesses have less than 100 employees and make $50 million in revenue annually. For a company to be categorized as medium sized, it should employ between 100 to 999 people and generate between $50 million and $1 billion annual revenue.
What is Enterprise Sales?
Enterprise sales is any sales process involving solutions for large corporates. It’s also known as complex sales and is characterized by:
- Large contracts
- Long sales cycles
- Numerous decision makers
- Higher risk
Enterprise selling is a unique b2b sales process that follows a different rulebook. Typically, SMBs in the startup phase put their effort in transactional sales that are typically low risk, are faster to close and that have higher performance with sales and marketing backing. In contrast, enterprise sales are essentially sales that involve large-scale corporate solutions.
Further, from a size and revenue perspective, enterprises are companies that employ more than 1000 people and generate over $1 billion in revenue yearly.
Having said that, below is a rundown of the differences between b2b sales for SMBs vs enterprises.
Differences Between SMB and Enterprise Selling
Below are key characteristics that define b2b sales among SMB and enterprise customers:
SMBs and enterprises are driven by different business priorities. SMBs go for short term goals with shorter timelines between decision making to project implementation (time to value or TTV).
As enterprise customers focus on initiatives that have long term time frames. Examples are strategic goals such as maintaining or gaining market share or ensuring recurrent revenue. For an enterprise, decisions to invest in solutions is based on how such a will help to maintain and support this strategic position.
The business challenges that SMBs and enterprises deal with are different. For instance, a survey carried out by Xerox found that the top pain points faced by SMBs are business growth (47%) and increased productivity through better workflow and improved business processes(47%).
On the other hand, large enterprises face challenges such as lengthy sales cycles, low ROI on IT projects, accountability, poor data reporting practices, decline of profit margins, unintegrated distribution systems, among others.
Purchase decisions during b2b sales tend to take a shorter time for SMBs, regardless of industry. The decision to buy can be made in as little as 2 days and hardly ever goes beyond 90 days.
In contrast, the buying journey for an enterprise customer is long, non-linear and can last from a few months to years.
For SMBs, 96% of buying decisions are made by business owners, even though they may delegate certain parts of the b2b sales process. The picture is very different in enterprise selling, where multiple stakeholders need to sign off on a purchase. According to Gartner, 6 to 10 decision makers are usually involved in any complex b2b buying decision. Each of these decision makers represent a department or interest.
Research is an important stage of any b2b sales transaction. But there are differences in how SMBs and enterprise customers go about researching products/solutions and their providers. SMBs rely on the internet, customer review and recommendations, because speed is of the essence in a purchase process. They also rely on vendors to explain their offering and how it will solve business needs.
Enterprise customers on the other hand may consult the internet during the search process but they go deeper, consulting multiple content sources along the way. Note however that even enterprises welcome any help they can get to advance the buying process. As such, any information you offer in form of white papers, case studies, presentations, etcetera, should promote buyer enablement.
Inbound and outbound b2b sales tactics increase reach and engagement when dealing with SMBs. It is therefore crucial to invest in paid and organic search as decision makers rely on digital content. In addition, tying email marketing into your sales strategy will increase reach, engagement and personalization, and lead to higher chances for one-on-one engagement.
Inbound and outbound strategies also apply in enterprise b2b sales, although tactics are more geared towards nurturing. To explore sales opportunities among enterprises, you should be armed with a portfolio of rich content that targets different stages of the buying funnel. Note that the buying journey for complex solutions is not linear, hence your content portfolio should be personalized for a process that keeps looping back and forth.
Should You Execute SMB or Enterprise B2B Sales?
Whichever sales process you choose, know this- enterprise selling is not for the faint of heart or for companies without the means to execute it. As well, to successfully execute an enterprise b2b sales strategy, you must be prepared to hear “NO” from clients you have nurtured for months, then get up and start all over again.
SMB selling is also exhausting but if you are focused, you can deal with its rigors. It is not uncommon to find businesses that cater both to SMB and enterprise customers but if you choose this route, you need to have teams in place for both segments.
The b2b sales process (SMB or enterprise selling) you choose to execute should depend on your product because ultimately, your product will be suited to either one of these groups. Besides your product, below are other factors that should guide your b2b sales strategy:
What is your sales organization equipped for?
Do you have senior sales personnel capable of pursuing a prolonged, end-to-end, direct or channel sales approach? Or, are you armed with digital marketers, sales reps and account executives primed to quickly generate and close new customers?
What are your capital needs?
If you need to raise capital, then enterprise selling will be harder particularly in the early stages. But this should not be a deterrent if your product is suitable for enterprises because once you onboard some clients, selling to future enterprise companies becomes easier.
What comes to you naturally?
If you feel more suited to digital marketing, you are better off handling SMBs through digital processes. On the other hands, a fat Rolodex is more suitable for you if you feel that “getting your hands dirty” with sales processes is more your niche.
If you choose to execute an enterprise b2b sales strategy, here are some rules you should follow
- Be prepared to deal with sale cycles that can last anywhere from 6 months to 18 months. Know that no matter what you do, enterprise sales deals can fall apart for reasons such as: shift in company strategy, if key stakeholder exits the company, economic changes, etcetera.
- Get buy-in from multiple stakeholders. Even if your point person is the CEO, you need to understand the needs of all stakeholders to ensure successful sale and implementation of your product.
- Have a solid pricing strategy. Do not underprice your product or offer it for free as this will lower its perceived value and may impact your ability to close deals.
- Start selling before you have a ready product. Your first meeting should be to pitch your idea and get feedback. You can then go back and incorporate the feedback into the solution you are creating. As you develop the final solution, keep nurturing your relationship with your lead and continue to build trust ahead of your launch date.
- In case of challenges, continue to assess and shore up your capability to sell to enterprise customers.
If you choose to go the SMB way, the following will lead to a more successful b2b sales strategy
- Create products geared for a growing business. Note that as much as SMBs deal with smaller budgets, they know that process improvement is what will propel their growth, and they are therefore willing to invest in solutions that lead to achievement of this goal. Therefore, you should demonstrate how your solution or product will address their pain point (growth in a competitive business environment).
- Demonstrate immediate benefits. It will be difficult to close SMBs if the learning curve and adoption of your solution will take up a lot of their time. A solution geared for SMB customers should be light and intuitive. Products that are too heavy right out of the box will not cut it for the SMB segment.
- Expect to deal with a different buying structure for each sale. This is because SMBs tend to work with undefined and unstructured processes which differ from one client to another.
- As you’ll deal with one decision maker, you’ll either get a hard “no” or “yes”. Gear your content strategy to this one person or someone they trust and consult.
- Launch a multi-channel sales and marketing approach as your target group is bound to have diverse interests. For instance, when launching a social media campaign, expect to find your target group on media other than LinkedIn.
Enterprise vs SMBs comparison isn’t only about size, hence the b2b sales strategy applicable for one segment cannot be applied to the other by merely scaling it up or down. B2b sales in each of these segments are accomplished through completely different approaches. As discussed above, the key for you is to find the b2b sales strategy that suits you and execute it the right way.