Tip for Marketers Targeting Small Business: SMBs Don’t Use the Term SMB

It is typical for those who market goods and services to small businesses to create an inside lingo of buzzwords and acronyms to serve as shorthand for lengthy phrases or recurring ideas. Marketing strategies for reaching small business decision-makers typically describe the customer by the size of a company (revenues or employees), the industry “vertical,” or other factors like the location because business-to-business marketers are unable to do what consumer marketers can when they describe customers as a set of demographics (for example, women, ages 18-21). Because of this, the terminology used as substitutes for consumer-like demographics has developed into:

  • Microbusiness Home or small office
  • Medium-sized (or large-sized) and small businesses
  • Small and medium-sized businesses
  • Those designations may make sense in terms of marketing strategies. However, there’s a good chance that you don’t know what any of that telly means if you are a small business itself and not a marketer to small businesses. And even if you did, you probably prefer the term “small business” to describe you.

When strategy words escape the marketing department.

Developing and managing a marketing strategy involves the use of inside-baseball marketing terms that, by accident, become so ingrained in a marketer’s vocabulary that they begin to creep into conversations with people who, based on the expressions on their faces, have no idea what we’re talking about. Oddly enough, it doesn’t stop us from using them. We even begin naming goods and services with abbreviations that the intended market never employs.

Using “strategy labels” like SMBs or micro businesses in customer communications is problematic.
Although discussing target markets and demographics in the marketing department is quite common, I doubt a consumer marketer would ever endorse the slogan “This Bud’s for Males, 21-34.” But when you call something the “SMB Solution Center,” you do exactly that.

When marketing to small business owners and managers, use the labels they use.
The next time you speak with one, pay attention to how the manager or owner of a small business describes himself or herself. You won’t find an acronym in that description (unless they are a CPA, or perhaps, an ENT). They’ll introduce themselves by saying things like, “I’m an electrician,” “I own a business,” or “I have a bike shop.” They will use terms like “small business,” “family business,” or “independent business” to set their companies apart from other kinds of businesses that they are aware customers associate negatively with (as I’ll note in a moment). Even those who own and operate quickly expanding small businesses hardly ever refer to themselves as entrepreneurs. However, they have stopped correcting people who claim to be them in recent years. Most small business owners believe the term refers to someone eleven though that they may admire entrepreneurs.

In my thirty years of selling goods and services to small business owners, I have never once overheard a small business manager or owner refer to themselves or their firms as a microbusiness, SOHO, mid-sized, or SMB.

Small Business owners and managers want their companies to be called small businesses because they view it as a competitive advantage

The results of a 2010 Pew Research study may provide some insight into why a company of any size would seek to be categorized as a small business. The Pew study found that Americans trust “small business” institutions even more than they trust universities and religious institutions.

(Gallup, a survey conducted June 1–4, 2013)

When the U.S. military was included in similar research conducted by the Gallup organization last year, “the institution of small business” rose to second place. Nevertheless, the results indicate that there is a lot of support for small enterprises in the market. A “small enterprise” may be relied upon. Being someone else makes one less trustworthy.

The term “small business” has statutory definitions that benefit a wide variety of businesses and are baked into thousands of state and federal laws, regulations, and administrative codes.

A tiny firm (or even a mid-sized one) may desire to use the term “small business” for other, more pragmatic reasons that are focused on the bottom line. The enormous compilation of all U.S. statutes, the U.S. Code, contains 996 instances of the phrase “small business.” The frequency at which the following words appear in the code is as follows: SMB: 0, Microbusiness: 0, Mid-sized business: 0.

The definition of small business has been established and codified by the U.S. government (and like most government inventions, it’s incredibly complex), unlike the marketing-department strategy words “mid-sized,” “SMB,” or “microbusiness.” Almost every federal legislation that appropriates money for the government has wording mandating that some of that money be used with businesses that are identified (and defined) in the law as “small businesses.

” Visit this Small Business Set Aside FAQ on the U.S. General Services Administration website for an illustration. It is possible to prevent a business from being subject to certain rules or taxes by understanding what a small business is. Those who manage small companies don’t spend any time wondering if they fall inside the limitations of metrics invented by marketers since things like SBA loans and government contracts depend on having very specific knowledge of what the phrase “small business” legally implies. They place greater importance on fitting the government’s definition of a small business than, for example, Walmart’s Sams Club’s goal to reclassify a sizable portion of small companies as “microbusinesses.”

Multiply the following by 50 states: The House Committee on Small Business, The Senate Committee on Small Business and Entrepreneurship, and The Small Business Administration.
(SmallBusiness.com illustration; image from Google Maps Street Views

The process of codifying the phrase “small business” has taken place over a period of six decades, as was mentioned in the preceding paragraph. Each state and territory refers to organizations, groups, and initiatives as “small businesses.” On the façade of an office building in Washington, DC, the phrase “little company” is inscribed in stone (see graphic). Any technique that looks to divide the dependable category of “small company” into smaller groups named “micros” and “mid-sized” would seem to be a divide-and-conquer tactic and might harm the capacity of small companies to communicate as a unit.

Small Business Saturday

When American Express decided to sponsor “Small Business Saturday” five years ago, they shut the door on anyone who might have preferred the name Microbusiness Saturday or Small and Mid-sized Business Saturday. To put it another way, tens of millions of dollars have been invested in a campaign that promotes small companies, whatever of size, to identify as such on Saturday after Thanksgiving.

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