It’s no secret that large corporations are chasing dollars from small and midsize businesses. Giants like American Express, with its OPEN Network, are reaching out to SMBs with services and products designed specifically for their needs. Microsoft, Dell and HP are all coming out with promotions and special products this fall for small and midsize businesses. Even the epitomy of big–Big Blue (IBM)–claims to get more than 20% of its sales from small businesses. And the list goes on.
Expect this trend to continue, even accelerate. Smaller enterprises are leading the recovery and, therefore, are seen as better customer prospects than large corporations still feeling the effects of recession. Also, in certain industries that are saturated at the high end or where competition is fierce, suppliers have no choice but to reach down into the smaller end.
For smaller enterprises, this may signal a shift in economic power. SMBs have stronger bargaining leverage than ever before when dealing with larger corporations. Now is the time for small and midsize businesses to negotiate for better prices, special deals, and more service.
For larger enterprises, initiatives to reach the SMB market bring new and different challenges they are not used to. Here are just a few of those challenges:
- – Products and services have to be tailored to meet the needs of SMBs.
- – Many large corporations have their work cut out for them to bring price points low enough to be affordable by SMBs.
- – The economies of marketing and selling into the SMB market present challenges all their own. Large suppliers are going to have to leverage new channels to reach the SMB market cost-effectively. One example: they may have to find channel partners with a strong brand already existing in the SMB market. Another example: they will look to leverage Internet channels to reach the multitudes of small business decison-makers with “personalized service”, without expensive in-person sales calls.
The next few years should be interesting, as we see how far the balance of power shifts between large corporations and SMBs.