"I am not an SME, you patronising ***!"

small business

Big businesses and governments are totally, hopelessly clueless about small businesses, says Robert Craven.

Governments and big blue chip corporates think they're talking and marketing to the smaller or owner-managed businesses but they’re not. They're not talking to these business people. They don't know how to talk to owner-managed businesses and they don’t even realise that small businesses have a separate language and a separate way of being from the world that they live in.
 
There are four million small businesses in the UK and that's just the bosses, accounting for 99.8% of the UK business names and employing 12 million people.
 
All my qualitative research shows that owners of the so-called ‘small and medium-sized’ businesses feel ignored and sold to in an insulting manner.
 
Small businesses are not the same as big businesses and they do not make purchasing decisions in the same way. Small businesses are small by choice. Meanwhile, corporates assume that a small business is just a little, big business. Wrong. Frogs are not the same as small crocodiles.
 
They do not have the same mindset.
 
Most advertisements focusing on the small business market (banks, IT, software, HR services) are not trying to communicate with small businesses – they are not creating (or even attempting to create) a relationship, or demonstrating values important to their target customers. Most ads aimed at the small business are relatively ineffective because the ad agency fails to understand the needs and wants of their target.
 
Seventy-six per cent of people think that big businesses lie in their adverts; 78% are more likely to buy on the recommendation of others; and still the corporates think that the route to market is about advertising spend.
Governments and marketers who want to talk or sell to small businesses need to recognise that:
 
  • Small businesses need to be treated differently at different stages of their life cycle
  • One of the best times to communicate is in a life stage transition (start-up, growing, consolidating, merging, selling)
  • Being patronising, smug or insincere will not get you sales
  • Trying to get people to aspire to unrealistic role models is futile
  • Small businesses will pay more and spend more with a brand that acknowledges their lifestyle and treats them well.
So, here's my list of thought bubbles I would like to send to the big corporate who claims to have had a Damascus moment and now wants to work with the small business community:
  1. I am not an 'SME'. I am a small, or owner-managed, or independent, or growing, or self-employed, or new, or young, or boutique business. When I go to a party I do not say "Hi, I am an SME." And as for the "smee" word, what is that all about? I never ever call myself a "smee"
  2. I am not part of a homogenous mass of some four million similar sales prospects
  3. I am not an immature/undeveloped big business
  4. I am not a second-class citizen who you see as a market opportunity only after you have exhausted the blue chip big ticket spenders, as a way to maximise your investment
  5. I want you to sell to me with an entirely fresh approach, not merely a scaled-down version of the methods used with big corporates
  6. I do not want to be patronised
  7. All marketers are liars; your salesmen are worse
  8. I know you don’t really care (in words or in actions). If people talked to you the way that corporates spoke to small business people they would punch you on the nose
  9. I am not another target towards your year-end sales goals
  10. I have a less formal, faster buying cycle than a corporate so create faster systems to match how I buy and not the other way around. I am not interested in your processes; they are for your benefit only
  11. I want my supplier to understand me, business, my business, me
  12. I want swift action
  13. I want to know what I am paying for and how and when I am paying
  14. I do not want to be bamboozled with science: keep it simple stupid
  15. I am the customer; remember who I am
  16. I don't want my time wasted
  17. I want you to make it easy for me to order and to buy from you; win my trust 'cos I don't have to buy from you today or ever
  18. I beg you to make sure your service delights me; show me how you can help, show me the benefits
  19. I ask that you customise your products and service for me
  20. I would be happiest if you could be more of a trusted adviser and not a numbers jockey
A quick summary:
  • Small and big businesses are very different
  • Big businesses are totally, hopelessly clueless about small businesses
  • Not enough 'stuff' is designed for small businesses or communicated in a way that appeals to them
  • Most stuff for small businesses is, to be frank, pretty patronising
Robert Craven is a keynote speaker and author of the best-selling business books 'Kick-Start Your Business' and 'Customer Is King'. As managing director of The Directors’ Centre, the consultancy for growing businesses, he works with ambitious directors to break through constraints on business growth.
 
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We are asking the bosses at Britain's big businesses to respond on camera to the claims made in the article above. Here our interviews so far:
 

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littleun's picture

And don't ignore the startups.

Well said. As a startup business it has been exhausting trying to deal with suppliers that look down on and don't understand small businesses. The banks could do with reading this post. When I have an ecommerce merchant account (the highest risk type of merchant account) why does it then take 2 weeks to set up an ordinary 'customer standing in front of me with their credit card' low risk account? Oh yes, because it's your process. Well your process is wrong then, and old fashioned and inefficient and probably steam-driven.

Please drag yourselves into this century and 're-engineer' your processes to be useful to your customers.

-- www.shortcouture.com The Place for Petites

All Marketers are Liars!

Good article and well put together.

As a marketing professional I must say I find number 7 on the list a bit harsh and certainly not true of us all. I personally think when dealing business to business that it is very important to always match a businesses aspirations to the service or product that you are offering. This is regardless of the size of a company, the people they employ or the turnover they create.

It simply doesn't make sense to provide a business with a product or service that wasn't right for them. Not only would it be damaging to reputation as you voice your complaints to everyone you know and at least one other but it wouldn't provide me with any long term or ongoing value. Marketing in my mind is about developing long term relationships and that requires knowledge, trust and understanding.

Say what you like about sales teams - they can defend themselves! :)

-- Damien Wright

http://www.business-development-1st.co.uk - Staff Development and Training

Drachsi's picture

A very good description of an SME, but in the end it's just a name.

You have summarised the description of an SME very well, how else would you describe the successful band of small companies that means the same? Help for small business at www.drachsi.com

 

Drachsi

Hilda Stearn's picture

I'm not an SME....

-- Hilda Stearn, CFCIPD Director Partnership Working Ltd www.partnership-working.co.uk 01494 565206

 

Thought-provoking and largely accurate! Well done!! 

 

SMEEs

Cracking article, wish you wouldn't sit on the fence so much though, say what you really mean ;-)

JRElder's picture

Small businesses

Small businesses also do not have the resources: a 40 page contract is not a problem for a corporation with an in-house legal team, but for a small business it's a major expense.

I think the average small business is probably better at calculating the overall cost of operation, compared to a corporation with compartmentalised departments.

Jonathan

Splice Marketing: ecommerce website design

EtherClear's picture

Valid points, but only in context...

There are some great points in this article, but worked in and around the IT hosting services and web design industry for some time, I notice a few things in this article that concern me slightly. 

Many customers in my experience seem to assume that an online business is larger than it actually is and this can lead to problems, especially when talking about service based businesses, where the client does not fully understand the workings of the service.

I've written some more about this article on my personal blog @ toby.im  

Toby

EtherClear Managed Hosting - UK Managed Hosting

A very good article I agree with wholeheartedly

"SMEs" are not all one sized business by any means - and there are so many different types of business with so many different aims that it's just not right to lump us all together. We don't all want to grow- for a start I don't want to have to employ people as I'm well aware of all the red tape and expense that goes with it. We are talked down to all the time as if we haven't quite made it to big business status - by people often incapable of doing what we do or understanding it.

And as for marketeers and salespeople- we do understand when people are trying to sell us advertising space so don't approach us with your offers to "grow your business" and other such management rubbish. If you're selling advertising space please just say so. If I'm interested I want to know how much first, and then I'll ask you for what I get for that to see if I want to. I don't want to listen to your sales spiel when I don't want to spend any more money on advertising no matter how great your product and I'm far too busy to waste time. And if I haven't got the sort of cash to spend that you want then don't waste my time or yours. Why do you think it's better to try and keep me on the phone when I'm not interested rather than send me something through the post that I might look at for the future when my circumstances might be different? I'm not stupid so don't try treating me as such as you'll never get a sale out of me, ever.

And if you have a product, why do you insist on charging me most of the amount that you'd charge a large PLC? Why not design a product more suited for what I need at a price I can afford instead? As others have said banks and credit card terminal providers operated by them are ridiculous in the way they try to stop small businesses surviving at all.

Big businesses and governments are totally, hopelessly clueless about small businesses, says Robert Craven

This is the first accurate representation of the world of small business I have come across after many years operating as one and working for and with many others.  It makes a refreshing change to the BS served up by the various so called representative organisations we know comprise of self serving careerist box tickers and their corporate sponsors.  I share all of these views and probably a few more and wish they were more publicly stated.  I will be sharing this with pals...very validating.

 

Coffeemate49's picture

So what suppliers should non-corporates use as suppliers

I totally agree with the original post, but it begs the question who can deliver the services that small and medium sized enterprises need in a way which meets their needs.  The challenge is that other small and medium sized companies know how to relate to their peers but may not have the breadth and depth of expertise needed or the scaleability.   

My view is that an answer lies in alliances - large communities of multi-skilled non-corporates.   Each company within the community has its own clients but can call upon relevant people from the community as a whole to form a team to meet a particular need of a particular company.   I see this as a very powerful solution as long as members of the community are good team-workers and each task is managed by someone with good practical project management skills.  

It could / should also be the answer to how do non-corporates win significant business from corporates and local / national government.   

boldinternet's picture

Excellent article

Well done Robert.

Your article certainly sounded like you needed to get this off your chest! As someone who has used 'SME' previously, it will certainly make me think twice in future.

Adrian

Bold Internet - AdWords Specialist

mikew@insitetrack.co.uk's picture

Great article

Its not often I take the time to comment on these kind of articles but this one struck a chord!

As well as sound advice for big companies, Robert makes a compelling case for all small companies seeking to market and sell to small companies, take note of his 20 thought bubbles and you are far more likely to be successful.

MikeW.

 

AlexMoscow's picture

Their loss is our gain

A brilliant post. Needless to say it will fall on deaf ears.

Still while the large corporates blunder around trying to work out why business owners aren't buying, we can profit from doing good business with each other.

ha ha ha!

Brilliant - I love this. It's so true...and beatifully written! :o)

Some fantastic thoughts in the comments section too. I also don't think we need the corporates - we should be focusing on doing business with each other and driving the UK's enterprises forward. We're also more likely to get better service, better understanding, more creativity around doing deals etc. if we work with each other.

Christina

www.co-deal.co.uk

www.blog.co-deal.co.uk

Big deals for start-ups & small businesses

"SME" doesn't cover it

The term "SME" covers such a huge range and size of business, generally accepted as being somewhere upto about £250m PA in turnover. A lifestyle business, owner operator should maybe be classed differently "Micro cap" is a term I often hear.

The unfortunate TRUTH is that big business is unlikely to really care about a little micro cap company because it is simply not profitable enough - sad however true and in all honesty, inevitable...

I don’t believe it!

Business is Business, whether it is tiny, very small, small, medium or medium-rare as long as it is well done!

I am typing this slowly as I know all of us smaller businesses (I refuse to use the stupid acronym, as it is meaningless) are very slow readers…

Robert covers some great points and without putting my Victor hat on I can only agree.

The question is what can we all do about it?  We clearly have a strong, representative and powerful voice but how do we tell those that need to know?  Answers on a postcard (or any other modern communications method) to Mr Vince Cable.

Gary T Neal – www.leo7.co.uk and http://www.youtube.com/watch?v=HerqlyXhokM

skazman's picture

One hundred percent correct

 Well done Robert. Hopefully some FTSE Chairmen will be squirming over this, though probably not. They probably don't understand what you're talking about. However, it needed to be said. One of the key things I always say to my students and clients consdering starting a business is to focus your entire business on your customers. Give them what they want when they want it at a price they can afford and of such quality that you do not need a 'customer service centre' somewhere in SE Asia!

Not an SME

As an accountancy company that works entirely for "micro businesses", to use the bank's jargon, we're well used to working with small start-up businesses.  It's a steep learning curve for anyone who decides to become self-employed and makes little difference what the owner's previous experience was. There's a big difference, too between someone starting out as a self-employed plumber and someone running a Limited Company with 50 staff for many years, although they're both lumped together as SMEs.

Our company tries to help new start-ups to navigate through the rapids on the turbulent river they find themselves in, whether by explaining what records they need to keep in what way for how long - and what they need to watch out for - or by it's helping them to find a supplier that they need.

If a new business owner can find a reliable mentor or"sign-poster", it can make life a bit more controlled.

In my experience, it takes quite a while for someone who is self-employed to move on to thinking of themselves as someone who runs a business.  It's a developing mindset as not everyone sees themself as the next Dragon's Den panelist.

There are companies out there who actually do know what small businesses need and can help them grow. Generally speaking, they don't seem to be banks or government departments. Organisations like the FSB or FPB can provide valuable support and opportunities to meet other people who are trying to run small businesses.

RobertCraven's picture
PowerHour's picture

Not just 'big business' that doesn't understand

 In my experience, government doesn't understand the thousands of one or two person businesses either, judging by the rediculous number of hoops we are supposed to jump through and irrelevant question we have to answer/have policies for before we can even bid for public sector contracts. I don't have an environmental policy, a maternity/paternity policy (I've had my kids), a disciplinary procedure, and I don't need to monitor the race, sex or faith of my employees (I know what I am and what do and do not believe) because my business is just me, with ad-hoc support from other people in exactly the same position! The point about the fact that we do not purchase (or sell) the same way as large businesses really hit home.

S Webb

Power Hour

RobertCraven's picture

GOVERNMENTS ETC

You have to wonder how things have got so out of touch. With 4m + independent businesses and some 96% of business names employing less than 10 people you'd think the law makers etc might come across the occasional window cleaner, car cleaner, painter, decorator, shop-keeper, dentist, accountant, architect, cobbler  that fits the small busienss critieria.

Big business is actually in the minority most jobs are in the independent or Govnt sectors yet all the news is always about ICE, Shell and HSBC...

 

RC

I'm not an SME!!!

Brilliant article ... and echoes my experience of working in this sector. 

RobertCraven's picture

10,000 hits - not bad, eh!

So, 10,000 hits on this article..., a 'formal reply from 02'...., lots of supportive comments from lots of people..., but still nothing has changed. In fact we seem to be going backwards.

I know nothing about it (mentorsme) but as an observer, the launch of mentorsme (and the general backlash) should be a suggestion to the powers that be (or do they not check the conversations on twitter?) that they haven't got it right yet.

eg
- If a loved one asked me to help them find a mentor, the LAST place I would send them would be here
- isn't Mentorsme a bit ironic to say the least: I'd never dream of asking banks for decent advice
- Fed up with supposed 'professionals' doing whatever foolish policy demands instead of what they know to be right

great article

 As a smee I agree totally, thanks for putting our thoughts into words.

BTW I found this site from a link tweeted by the technology strategy board, RT by @nick_appleyard so someone somewhere is listening... https://twitter.com/#!/UKITA_UK/statuses/129225159700783104

chris

RobertCraven's picture

reply to Chris

Thanks Chris - delighted to see that we have now had 15,000 clicks!

RC

We are not the same as big businesses, and we are not the same as each other.

I agree that the dynamics of a small businesses are very different than those of large enterprises.

And you are right that we are not the same as each other. The dynamics within a "small by choice" one-person business are completely different from those of an ambitious start-up seeking growth. And I find the dynamics and challenges for that sub-set of small organisations that *are* seeking to develop from where they are now particularly fascinating.

Of course, you over-state the case to make your points (no harm in that), but much of what many small organisations are doing could not be achieved without the infrastructure (computers, software, the Internet etc) that are provided by those evil big companies. And it is interesting that the article is surrounded by adverts from the big-boys.

But you are right, that big is different, not best. And there is a tendancy toward being patronising amongst big companies seeking to sell to small ones.

RobertCraven's picture

your comments

Thanks for taking th e time to post your comments.

Robert

Jon_Sharp's picture

"I am not an SME, you patronising ***!"

[quote]Meanwhile, corporates assume that a small business is just a little, big business.[/quote]

and governments.

Big is quite simply wrong.

My opinion is this is absolute folly and part of the disaster that is the 'global economy'. Certainly companies should grow and become bigger companies but at the moment the balance is in favour of supporting bigger companies in the hope that they in turn become even bigger companies.

What have we got in real terms, zero competition in the High Street, particularly in banking, where are the local banks or building socities? When was the last time you felt like you were welcome and not just a number? Zero competition in food retail, the big 4 dominate the UK market. Zero competition in utilities, what wrong with every town having it's own local company that supplies electricity for example (maybe via incinerator whilst disposing of the towns waste?) - I could go on and on. Localised industries means the consumer benefits from either increased opportunites for savings or a feeling of 'belonging' which in turn increases 'community spirit'. We don't all have jet set lifestyles, the nearest most get to the 'global village' is the internet and even then they don't particpate, merely observe "remotely and distantly" unattached and disconnected.

The trouble is when it goes wrong and inevatibly it will, 1000's, 10'000's pay the penalty directly and indirectly, redunancies, supplier trading losses, more redundancy...  BUT if one little company struggles, for whatever reason it only effects a handfull, 100's at most.

Small companies are just as capable at trading in international markets as bigger ones.

And from the Govt perspective it's also quite obviously clear that smaller business pay more revenue than but that another debate...

 

BoothPix - Act your age or your show size!

 

RobertCraven's picture

reply

Thanks for taking the time to share your thoughts. Very clear.

RC

businessforbusiness's picture

Poor communications

Excellent article Robert, you raise the subject of communication between big and small business well.

It begs the question about communication in general and the lack of understanding by the supplier of the purchaser - sellers and consumers. 

It has prompted me to think more about this.  I will post an article on the subject in the next few days. 

Nigel T Packer

Business for Business Internet Marketing Ltd

http://www.businessforbusiness.co.uk

RobertCraven's picture

your new article

Any sign of your new article?

 

RC

Good article

 This is a great article and I think you have hit the nail on head when it comes to why I no longer wish to supply to big corporates too. I would rather pay the extra to a smaller company that cares and will do a job right and I believe many other small businesses feel the same and they are our target market - fellow professionals that want a  good job done. 

RobertCraven's picture

reply

Thanks for your kind words.

RC

RobertCraven's picture

21,000 reads and counting

 With over 21,000 reads and three corporates responding by video, it looks like I might have hit a nerve.  

The small business community clearly knows what I am talking about. It  looks like the big business community are 'getting' the engagement piece at different rates.  

RC

Pricing millions of businesses out of marketing

I find this an incredibly refreshing view. SMEs or, as I prefer to describe us "a smaller business without the larger budget" are often priced out of the park as "you must spend at least £5-10k with us to get this advertising space".

Understandably, a great deal of time, effort and research has gone into building the ad platforms, but only Google appears to have the remarketing of Display available to smaller budgets - I loved being told by the Yahoo Display Ad Manager for the UK that we weren't candidates for their Ad Choices service unless we had at least £5k to spend - which is ridiculous. 

By ignoring 4 million businesses, the companies which set minimum spend limits could be shooting themselves in the foot; I would gladly spend with them from my budget, and see if their ad service can improve my bottom line, or not.

Maybe that is what these services are afraid of; smaller businesses watchful of budgets and aware of return v's the teams at larger companies who have been told to get presence everywhere.

-- Sarah Theodorou THESITEBOX.COM Tools and Hardware

RobertCraven's picture

reply to Sarah

 Sarah

Thanks for taking the time to comment oin this bog article. Do spread the word...

 

Robert
(Author)

gelmorshdy's picture

Hooray for the Micro Business!

 Hi Robert,

I really enjoyed reading this article. I think the label you choose to describe your business is important. Like you I really dislike the term SME and how it's used to refer to even the most tiny - or "micro" businesses. You're so right. Owner run and micro businesses have very specifc needs and a lot of companies don't address them. This continues to shock me considering how many tiny businesses are out there.

And it's so frustrating! Niche, micro businesses are a hotbed of inspiration, creativity and outstanding customer service. There are some real influencers and innovators in the field and it's exciting to see what's emerging from this vital sector. In fact, this is a great time for micro businesses to really flourish. Social media, blogging and niche marketing has presented some amazing opportunities which are ripe for the picking. As a freelance copywriter and online magazine editor, I am proud of my micro business status and see it as a strength, not a hinderance.  

RobertCraven's picture

reply to Hooray for the Micro Business!

" I run my own business" or "I am managing director of..." depending on who I am talking to....

RC

JKConsultancy's picture

Hear Hear Robert!

I loved this post Robert (except the part about all Marketers being liars!) For the very reasons you stated in your article is why I decided to focus solely on very small businesses. The support small businesses get is so shockingly poor that I knew there was a gap in the market to provide my services to support the "little guy". The government will tell you that organisations like Business Gateway help small businesses, but unless your a company with high growth potential, exporting potential or are involved in the Tech industry, the support is poor.

I've just graduated this month from Uni and when I researched small businesses for my Dissertation I was truly shocked about the lack of research and focus being afforded to smaller businesses. Why? They're the lifeblood to our communities and economy. MORE should be done to support them, and as you rightfully pointed out each businesses should be treated individually and not as a collective group.

Excellent article, got my blood pumping :)

RobertCraven's picture

Thank you JK Consultancy

 JK

Thank you for your kind words... the debate rages on and you are right that there is little very 'good research' for the small business sector ie independent and not trying to sell something and scientific or at least usable.

Robert

I am not an SME, nor am I an idiot

 

 What a great article and so well put.  We have also had the misfortune of being spoken down to by patronising marketers, who have had the audacity to scream (yes scream) at me of how foolish I was in not showing any interest in their product or service.  What they do not seem to realise is after a reaction like that, there is now way on God's earth I would EVER use them in the future if and when I could afford ther services.  These marketers need to remember that even if the start up or small business could not afford their services at the time, treating them with respect could mean that you land their business in the future.  

In all of the marketing calls I have had there is only one marketing company that I will do business with in the future.  Why?  Because he understood the workings and the financial limitations of a small start-up business and took the time to offer me some tips on how to start off by doing some of the things myself.  With the help of this lovely man I have been able to get ourself to first and second pages of Google on keywords that matter to us.  This is not to say we will not need them in the future, we will, as it has been a lot of hard work to get there, and will mean just as much hard work to keep us there.  I could not have done this without the initial advice given and for this reason this company has secured my business with them in the future.

RobertCraven's picture

reply to JayneG

 Thanks for taking the time to post your interesting comment.

Robert

 

oh dear...

What a disappointing rant this is. Clearly written by someone with a chip on their shoulder.

This has pushed back the credibility of small businesses by 20 years. It makes us sound like a bunch of pathetic moaners complaining about the way 'big' business and governement 'speaks' to us. Really, they way they 'speak' to us? Snap out of it!

I have built and sold two SME's and have worked in and around small business all my working life and I'm proud of it. We are up against 'big' business, small business, inbetween size business, overseas business and the like. That's where we should all be focusing our attention...on the business zones we operate in and raising our own credibility and respect with our ability.

I have never bought any product or advice from anyone who treats me or my companies with disrespect or a patronsing attitude. Indeed, in all my err...25 years.. in the small business sector I have rarely come across any' big' business that treats me with anything other than respect. If big businesses don't 'target us' the right way they wont get our business. It's as simple as that.

Lets stop sounding pathetic, weak and complacent because we are small businesses, lets just get on with the job.

 

 

RobertCraven's picture

reply to oh dear...

 JMS

 

Thanks for taking the time to reply.

 

Really interesting that you interpreted the article as you did. From my point of view, I was simply making the point that larger organisations often don't 'get' smaller/indpendent businesses. Yes, I agree, it is bit of a rant, but only to drive the point home. 

 

Thanks for the feedback.

 

RC

 

 

 

 

 

 

mirandaballard's picture

Vultures

Robert, I love your list. We're so bored of the 'vultures' thinking, "Oh good, you're risking everything to try something really new and innovative... now, how am I going to make money out of it?"

RobertCraven's picture

Vultires

 yes - great comment!!

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