Stop Calling Them Small: A Smarter Way to Serve SMBs

Small businesses are the backbone of the U.S. economy. They represent 99.9% of all firms, generate nearly half of GDP, and have accounted for over 60% of net new job growth in the past 25 years. Yet, for many large companies, trying to serve small businesses often seems like the worst of both worlds: they’re as fragmented as consumers but as demanding as large enterprises.

It’s true that they’re hard to target, difficult to serve, and require real relationship-building to secure their business. But the reality is, when served well, small businesses can be one of the most loyal and valuable customer bases you can acquire. Why?

• They’re naturally relationship-driven. SMB owners are more likely to work with partners who reflect their values and understand their challenges. They often assess companies on those elements the first time they’re considering a partnership, but don’t feel the need to continually reevaluate unless there’s a major breakdown.

• They don’t have the time to constantly switch providers. Unlike big enterprises with dedicated procurement teams, small businesses simply don’t have the bandwidth to review new vendors every quarter.

• Switching costs are higher than with consumers. While consumer products are easy to swap with a few clicks, SMBs deal with integrated systems, oversight, and operational processes that make switching providers more of a hassle.

Despite the opportunity, most companies fail to resonate with SMBs. That’s because they typically just tweak one of their existing go-to-market approaches and hope it will work for small businesses. They might make their corporate model more self-service, or dress up their consumer model to sound more professional. Neither truly meets small businesses where they are.

Having worked with many large organizations to help them better support SMBs—and having run one myself—I know there’s a better approach.

1. Stop calling them small, and speak to them differently.

The language a company uses is a dead giveaway of how well it understands its customer. I learned this a decade ago while working with the executive team at a pet food company just as the “small dog” category was taking off. We went into customers’ homes and asked them all about their “small dogs,” only to be met with a brief look of disgust as they said, “They may be small based on your classification, but they aren’t small to me.” 

“Small business” carries the same baggage. And it’s just one of many mindset missteps companies make when trying to serve this group. Another example: Many small business leaders started their careers in the bureaucratic maze of corporate America, and chose to leave for what they view as a better alternative. Therefore, many of them are left with an inherent distrust that large organizations will hide behind bureaucracy as a way to passive aggressively avoid meeting their needs. One easy way around this view? Break a corporate rule early in the relationship to show them you won’t let bureaucracy get in the way.

This list could go on for quite a while, but the critical takeaway for executives trying to serve this group is that SMBs have different mindsets, and those mindsets exist on 3 different levels. Some will be more universal to small businesses, like the ones listed here, some will be specific to your industry, and some will be specific to your company or product. Decide which customers you’re most interested in prioritizing (which verticals, or which groups) and uncover their mindsets across these 3 levels. Then bake those mindsets into everything you build, say, or do.

2. Build a loyalty “program” that doesn’t look like a points and perks program.

Large corporate clients often get assigned account executives or customer success managers to personalize their experience. That kind of one-to-one attention is intended to build relationships, drive loyalty, and provide a familiar face leaders can rely on. 

But the SMB market is much more fragmented and often doesn’t allow for that type of personal service. Many marketing leaders, therefore, turn to “small business loyalty programs” to fill the void. While that’s not necessarily a bad idea in and of itself, many of these programs are undifferentiated and awful. An airline executive I work with once did an audit of all the small business loyalty programs in the airline space and found that they not only all said the exact same thing, but many of them offered such transactional benefits that they actually appeared to be cheapening the relationship with customers. 

The trick for executives trying to serve this market more effectively is to think about a loyalty “program” differently. One that is far more rooted in a sense of shared mission, vision, or purpose. Before Virgin America was bought by Alaska, they had a fiercely loyal small business following in the cities they flew. Yes, you could accrue points on Virgin America, but the engine driving loyalty went far deeper. For leaders trying to serve this space, figure out a small business loyalty program that doesn’t just look like a points exchange, and instead demonstrates your commitment to something deeper. 

3. Simplify their lives with bundles and partnerships.

SMBs don’t have large procurement departments that are able to integrate multiple vendors together into systems of solutions. Often, the CFO is also head of procurement, and occasionally moonlights as the head of IT as well. This creates a strong desire for one-stop solutions.

Take banking, for example. Large enterprises spread out their financial needs among many banks while smaller ones typically stick with a single primary bank and, assuming it’s cost-effective, would prefer to integrate as many services as possible under a single organization. Organizations that can bundle together a clever suite of offerings are more likely to be met with appreciation in this market. 

But bundles can also be met with skepticism, since they have often been used as a tool to oversell SMBs more than they need. Constructing these offerings so they resonate with the way these leaders see the world and fit with the way they see their job is critical to finding a winning combination. The good news is, you don’t have to build it all yourself. Partnering with other providers can sometimes be even more effective, especially if those partners are SMBs themselves. These kinds of thoughtful partnerships can simultaneously signal values alignment, while still offering the simplicity of one single point of contact to manage.

Rethinking How We Engage SMBs

For too long, big companies have treated SMBs as an afterthought—too fragmented, too difficult, too small to prioritize. But that mindset is outdated. When engaged with intention and empathy, small businesses can become some of your most loyal, enduring customers.

Winning in this space means building a different type of connection. One that centers on the way they see the world, one that builds a different type of loyalty, and one that simplifies their operations. And above all, it means recognizing that while their headcount might be small, their impact on your business and the economy could be anything but.