The Case for SMB Sales: Why small customers mean big sales

The Dock Team
Published
April 17, 2023
Updated
February 12, 2024
TABLE OF CONTENTs
TABLE OF CONTENT

Moving up-market is considered a rite of passage in B2B sales.

It’s a sign you’ve made it. That you’re selling to the biggest players at the table. But what if by fixating on selling to enterprise, you’re ignoring 99% of your addressable market?

The term SMB carries a lot of baggage in B2B, especially among SaaS and tech companies. 

It’s easy to write off this entire category of businesses as tiny, unsophisticated mom-and-pop shops that will never realize the kind of lifetime value that B2B sellers, founders, and business owners dream of.

The reality is, there are several advantages to an SMB sales strategy. 

For starters, there are lots of them. Selling to SMBs is rarely as complex as selling to large enterprise organizations. And if you can build a repeatable system to consistently sell to SMB customers, the upside can be huge. 

In this article, we’ll break down what SMB sales is, why selling to SMBs is a viable and lucrative strategy for your business, and how to do it right.

What is SMB sales?

SMB sales is the act of selling products and services to small and medium-sized businesses (SMBs). SMBs are indicated by two fundamental characteristics: the number of employees and annual revenue.

  • A small business is any organization with fewer than 100 employees and an annual revenue of less than $50M. 
  • A medium-sized business has between 100-1000 employees and annual revenue between $50M–$1B.

That’s quite a bit bigger than the mom-and-pop shops the term “small business” usually brings to mind. 

In fact, there are more than 31 million SMBs in the US alone with millions more incorporated every year—over 5 million new business applications were filed in 2022. Collectively, SMBs make up 99.9% of businesses in the US economy and employ half of the entire workforce.

That puts true enterprise companies squarely in the minority across the corporate landscape, at least in terms of how many there are. After all, there are only 500 companies in the Fortune 500. 

As you decide whether your go-to-market strategy should target SMB vs. enterprise sales, it’s important to keep key differences in mind.

SMB vs. enterprise sales: which is right for you?

SMB sales include relatively short and straightforward sales cycles, fewer decision-makers at smaller companies, and buyers who are looking to solve a specific problem quickly.

In contrast, enterprise sales—also known as complex sales—are defined by:

  • high-price-tag deals
  • long sales cycles
  • multiple stakeholders and decision-makers
  • complex procurement requirements

It’s important to understand the benefits and downsides of each approach and which best aligns with your product and GTM motion.

Benefits of selling to SMBs

Some of the upsides of selling to SMBs include:

✓ Shorter sales cycles: Most SMB deals are measured on a scale of days—45 on average, though some deals only take a couple of days to close. Contrast this with the months and even years it takes to close a typical enterprise deal.

✓ Simple sales process: As startups gain early traction selling to SMB customers, founders often do the first sales themselves. All selling requires skill, but the relative simplicity of SMB sales typically doesn't require the in-depth expertise of an experienced (and expensive) enterprise salesperson or an entire sales team. Selling to SMBs means less time navigating red tape, bureaucracy, and corporate politics and more time focusing on the value your solution provides.

✓ Quicker to product-market fit: Faster, simpler sales cycles also mean more at-bats. Higher sales velocity also gives you more data about why people did or didn’t buy. You can quickly test GTM hypotheses, learn which messages resonate with your ICP, and build momentum as you establish product-market fit.

✓ Fewer stakeholders: SMB sales only involves a handful of decision makers. This means sales reps are often speaking and building relationships directly with key stakeholders and SMB owners. Enterprise sales, in contrast, involve entire committees of buyers—all with different and competing priorities and timelines.

✓ Potential for growth: Selling to small companies is literally the name of the game for SMB sales. But even the biggest companies started somewhere—Facebook was famously started in a Harvard dorm room, and Google in a garage. Your SMB customers might not stay that way forever, and your product may even be instrumental to their growth. These high-growth customers will be invaluable should you decide to move upmarket.

✓ There are lots of SMBs: There are 30+ million SMBs in the US alone. In theory, the sheer volume of SMBs makes lead generation simpler than tracking down the handful of prospects capable of initiating an enterprise deal.

✓ Early adopters: Some SMBs, especially other tech startups, are early adopters of technology. If your product or service addresses a pain point they’re experiencing, they will find budget for it. Most SMBs’ acceptance of new technology is contrasted by enterprise buyers’ skepticism and hesitation to try something new, where the risk of change often outweighs the reward.

✓ Focused product development: One of the major challenges selling to enterprises is their rigid and specific product needs. If your product doesn’t do exactly what they need it to, they’ll ask for customization. If you can’t customize, they’ll churn. SMB buyers are less likely to influence the product roadmap and are more willing to adopt a “work-in-progress” product.

Challenges of selling to SMBs

SMB sales is not without its challenges. Some potential downsides include:

𐄂 Smaller deal sizes: Adopting an SMB sales strategy means forgoing the five- and six-figure ticket prices of enterprise deals. SMB sales are smaller by nature, and the average contract value (ACV) needs to be factored into the selling strategy to make sure you’re not spending more money to acquire a new customer than you’ll make from them.

𐄂 High deal volume: The logical way to compensate for smaller deal sizes is to close more deals. The greatest challenges with scaling up deal volume revolve around establishing repeatable selling processes that won’t burn you or your sales reps out and creating a great buying experience with your customers at the same time. After all, SMB sales are built on relationships.

In short, SMB sales are nothing like enterprise sales. The priorities and challenges that motivate SMB buyers are not the same as enterprise buyers. 

To implement an effective SMB sales strategy, you must have a crystal clear understanding of how and why SMB prospects buy.

How and why SMB prospects buy

Small doesn’t necessarily mean simple. SMBs have different priorities and challenges than enterprise buyers, but these needs are just as nuanced and complex.

The reason why SMB buyers buy can be lumped into two categories:

  1. They have a job to be done, but they don’t know how to do it. So they “hire” your product to do the job. The litmus test here is simple: does your product do the job or not?
  2. The primary challenge for most SMBs—especially startups—is growth. This makes the decision to buy from you somewhat existential. Tailor your pitch to drive home the value behind how you’ll help them achieve that growth, and make sure your product/service can follow through.

When it comes to how they buy, it’s all about time to value. SMB buyers can move fast to purchase. Your pitch must be tailored toward the value you provide and how to get to that value quickly. 

The selling process needs to be simple and frictionless, from the discovery call all the way through to conversion, purchase, adoption, and renewal.

Traits of a great SMB salesperson

The nature of SMB sales means that sales reps who possess certain traits are better positioned for success than reps who don’t. Great SMB sellers need to be hyper-efficient and resourceful, and they need to know how to both build relationships and close deals.

★ Hyper-efficient: SMB sales is a velocity game. As we’ve mentioned, smaller deal size needs to be made up for by more deals. To succeed in a high-velocity environment, SMB sales reps need to be extremely efficient and organized, managing dozens of calls a day (e.g., prospecting, qualification, and demos), plus multiple prospecting campaigns.

★ Scrappy, resourceful, and adaptable: SMB reps must be good at managing lots of leads and prospects. As these leads often come from marketing or demand generation, sellers need to qualify quickly and decide which leads are most likely to close and are worth pursuing, and which to drop.

★ Ability to close: SMB reps may only get a handful of touches to close a deal. Given the short sales cycle, and the fact that most buying conversations involve decision-makers, reps need to know how to ask for the close to get the deal done.

★ Relationship builder: With all the above talk of speed and velocity, this might feel counterintuitive. But great SMB reps need to be relationship builders. They need to make buyers feel like VIPs while still working a high deal volume. 

Building relationships and creating great buying experiences at scale is one of the biggest challenges of SMB sales. An effective SMB sales strategy needs to incorporate tactics and processes that prioritize the buying experience without sacrificing deal velocity.

How to Create a Winning SMB Sales Strategy

Now that you understand what characterizes SMB sales, why SMB prospects buy, and what it takes to sell to them, let’s get into how to build a strategy geared toward closing more SMB deals.

Your strategy shouldn’t be overcomplicated. But it should include a few critical components to maximize your chances of success like:

  • a clear ICP
  • a defined lead qualification process
  • multi-channel outreach approach

Let’s take a look at each.

Create segmented ideal customer profiles (ICP)

A smart SMB sales strategy goes way beyond simply targeting companies based on size.

As you know, SMBs make up 99% of corporations in the US. So your targeting needs to include several more factors to really drill down and find the types of customers you want to target.

Industry, geography, budget, and headcount are the obvious ones—they’re table stakes. Great SMB sales strategies need to take ultra-specific factors into account.

  • Have they recently raised funding? If so, what round was it?
  • Does their tech stack play nicely with your solution?
  • How many engineers/product people/salespeople/marketers are on the team?
  • What’s their primary GTM motion?

The more specific you can get with your ICP, the more your value propositions will resonate.

Do multi-channel outreach

A key benefit of a detailed ICP is that it narrows down which outreach channels to focus on.

Understanding where your ideal customers spend their time and how they like to buy allows you to focus your outreach approach on those specific channels.

Showing up in multiple channels is important to keep your offer top-of-mind, but multi-channel doesn’t mean all channels. You don’t have the time, money, or resources to be everywhere, and nor do you want to be. Instead focus on being in the right channels, i.e. where your buyers are.

Channels that lend themselves best to SMB sales include outbound (cold calling and emailing), social selling, inbound (a joint effort with marketing—sales needs to have a system in place to qualify inbound leads), and product-led sales.

Qualify leads quickly

The velocity required for successful SMB selling means you or your sales team can’t afford to waste time on leads who will never buy from you.

Build a framework to swiftly remove low-intent leads from your sales pipeline so you can focus time and resources on prospects who are most likely to close.

There are several qualification frameworks out there, like:

But at heart, they are all repeatable methodologies for quickly figuring out if someone has the budget, need, and intent to buy from you and is worth pursuing.

Actionable tactics to land more SMB accounts

With a strategy in place that focuses on getting qualified SMB leads into the pipeline, let’s turn to tactics that turn them into customers.

Here are three practical tips for closing more SMB deals.

1. Simplify the buying process

If buying from you is anything but frictionless, your prospects will bounce.

Speed, efficiency, transparency, and simplicity need to be hallmarks of every SMB deal at all stages of the buying process—everything from first contact through to conversion and adoption.

Focusing on buyer enablement means creating content and processes with the specific purpose of helping your buyers buy from you. While it seems like an obvious concept, the truth is few GTM teams really focus on buyer enablement—it’s a powerful way to stand out from your competition.

One way to simplify the buying process for your prospects is to organize all of the content and context they need to make an informed purchasing decision in one place. 

Platforms like Dock help sellers and buyers stay organized at critical moments in a deal while making the buying process feel white glove thanks to smart automation and personalization.

Dock's digital sales rooms let you organize sales content in one place.

2. Build relationships and personalize at scale

SMB deals may be transactional, but that doesn’t mean they need to be impersonal.

Personalization at scale is a sticky point in sales and an oxymoron at heart. But since high deal volume and velocity are necessities for success in SMB sales, reps need to inject personality and personalization into their process to win buyers over.

“Relevance” is perhaps a better term than personalization. 

The sales content shared during the sales process should align with the prospect’s priorities, wants, and needs. Prospects should have the product and pricing information they need, and the context of why it’s relevant to their specific situation.

Tools like digital sales rooms (DSRs) help balance scalable processes with flexible personalization. DSRs enable you to create a template for each SMB ICP segment, duplicate it for each new customer, and lightly personalize it with their and their company’s name plus any specifics highlighted in the sales process like certain features or resources.

For your buyer, this feels professional and personalized—like you’ve taken the time to build a space and experience just for them. In reality, this approach is simple for you or your reps to duplicate (i.e. scalable) and covers all your use cases with little work required from deal to deal.

3. Create a repeatable selling process

Repetition is key to success in sales at any level, but for SMB deals it’s mission-critical.

The sheer volume of sales you need to make to ensure this strategy is viable means creating a process that you or your reps can execute over and over at scale.

This is all about being organized and having everything your prospects need in one place. How you follow up after a demo should be standardized, with a checklist of activities laid out so you’re not winging it or forgetting anything. This is how you balance executing a high volume of SMB deals without sacrificing the relationship-building element key to SMB selling.

The tactics employed at this critical closing stage of SMB deals need to not only be well-defined, they also need to be repeatable and scalable. Examples include:

  • Sending follow-up email sequences that align with where the prospect is in the sales process. Templated emails and cadences are key here.
  • Clearly defining next steps with mutual action plans to keep deals moving forward
  • Sharing relevant product demos to remind prospects of the value your tool provides, even after the sales demo call
  • Sharing bottom-of-funnel content and social proof like case studies and testimonials to help get fence-sitting prospects over the line
  • Displaying clear pricing and payment information so customers know exactly how to buy from you

If you’re building out your own SMB sales process and could use some inspiration, check out Dock’s SMB sales template for an idea of what to include in a standardized workflow.

Build your repeatable SMB sales process

Selling to SMBs can be a viable—and profitable—GTM strategy, but it’s critical to understand how SMB buyers tick.

They are not a smaller version of enterprise companies. Selling into SMBs requires a different sales process that focuses on building relationships directly with decision makers and selling them on time-to-value while also balancing the large number of deals needed to make this strategy work.

It’s a new-school approach to selling that focuses on contract speed rather than contract value.

But in order to create momentum, you need a repeatable and scalable selling process.

That’s where Dock can help. Dock helps you move quickly from deal to deal while also making clients feel like a VIP. Shared workspaces ensure critical content is easily accessible for your prospects, and a direct line to the rep leading the deal and shared next steps keeps deals moving forward.

To lock in your SMB selling process and start closing more deals, check out our SMB sales template or book a demo with our team for a personalized tour.

The Dock Team