Stop marketing to “SMEs”: Refining your personas is essential to effective marketing
The owner of a kitchen-table startup needs dramatically different support to a manufacturer with 20 staff. Yet marketing often lumps “small business” owners into a single category.
It’s vital we break down SMEs into more specific groups, so we can understand what support business owners need – and how to market to them effectively.
Your content needs to be able to cut through the noise. If you can’t identify your audience’s specific challenges, it’s unlikely they will engage with your brand.
Inkwell’s goal is to create conversations with business owners. We wanted to share what we’ve learnt doing that for brands like Sage, Crowdcube and Pipedrive.
The article includes a framework you can use to break down the SME segment and examples of challenges you can use to better understand this audience.
Breaking “SME” into different categories
We tend to think about the support business owners need in terms of inflection points in their growth – what milestones cause a step-change in the way they operate?
Turnover and employee numbers are useful indicators:
Turnover is helpful because larger businesses are more complex. However, the correlation doesn’t always work. A solo founder running an FMCG business can turn over £1m, while a branding agency would need 10-plus staff to get there.
Number of employees is useful because lots of challenges centre on managing staff and businesses get more complex as the team grows.
For these reasons, team size tends to appear on marketers' personas. It’s a buying trigger for lots of products and helps us empathise with our audience.
The availability of internal resources
To understand what support a small business owner needs, picture who they’re surrounded by. What does their workplace look like and who’s on the team?
A founder bootstrapping an ethical soap product needs to understand everything about setting up marketing campaigns, from building email lists to networking.
When they have a small team, it’s likely that DIY marketing has been replaced by support from freelancers or a team member. Either way, they’re not doing delivery and are thinking about things like developing their USP.
Important inflection points for business owners’ learning
There are lots of commonalities in the experience of growing a business, including inflection points we can use to understand our audiences.
Let’s look at a team-size approach to breaking up the SME demographic, so we can create more effective marketing.
Solo founder or small founding team
Common challenges include pricing goods, building marketing channels and winning their first customers. These are the business owners people talk about as “wearing many hats” – they’re doing a little bit of everything needed to run the business.
Starting a business as a solo founder can be lonely too. Business owners may have left a busy workplace or be keeping the details of a side hustle under wraps. That means community and wellbeing are critical.
At this point, business owners are likely to attend lots of events to try and find other people in a similar situation.
Five-plus employees
Founders can spend less time on delivery when they start building a team. Instead, the focus is on creating processes or systems for people to implement. A huge amount of time is spent looking after team members.
Business owners with five employees are likely to start paying for expert advice, such as a business coach or an accountant that provides strategic advice.
At this point, business owners become choosier about the events they attend. They have access to mentors and paid learning, so the level of detail and relevance needs to justify their time.
12-plus employees
Communication becomes paramount in companies with more than 12 team members. It doesn’t make sense for everyone to be in the same meeting anymore, so they’re starting to implement structure.
When you have a dozen team members, values need to be explained. Processes need to be robust, resources managed and the sales process systemised.
In short, there’s a huge amount of working on the business that needs to happen.
Peer networks become invaluable. The challenges are wildly different to startups with several employees; founders are keen to spend time with their peers because it’s difficult for other people to understand what they’re going through.
This is the point when businesses have the potential for rapid scale. The OECD’s definition of a high-growth firm sets the floor at 10 or more employees for the start of the growth period, for example.
25-plus employees
It’s possible to manage five to nine people effectively. The limit is a function of the amount of working hours in a given week and how much support people need.
That means businesses with more than 25 employees introduce management layers, such as heads of departments, and the founder’s role changes considerably.
It’s common to have non-exec directors, coaches etc. too. That means direct, in-depth support.
How can your content marketing complement this advice?
Many business owners are specialists in a particular area, such as designing products, and can find the evolution from a delivery-focused role to CEO difficult.
Events are likely to be limited to specialist peer groups and industry meetups, such as trade shows.
40-plus employees
A business with 40-plus employees will have established a management team and governance. There’s significant back office support for HR, finance and marketing.
Business owners can become a bottleneck for the hiring process and product development. They need to establish themselves as a CEO, take a step back from day-to-day operations and trust their management team.
Given the financial resources available, business owners are less likely to try to learn new delivery skills. Instead, consultants, contractors or new employees are used to realise their ideas.
That means the challenges they think about are around culture, attracting the right talent and sales.
It’s worth remembering that the vast majority of companies have fewer than 50 staff; there were six million businesses in the UK at the start of 2020, of which 76% didn’t employ anyone and less than 1% had 50 or more employees.
120-plus employees
The difference between running a startup and a 120-person company is a chasm.
Dunbar's number suggests humans can comfortably maintain 150 stable relationships; the size of our brains limit the number of interpersonal relationships we can have.
That means there’s a point when business owners won’t know every team member and certainly won’t have hired them.
Challenges in businesses with 120-plus employees include raising financing, setting company values and developing strategic partnerships.
Events are likely to be limited to small, invite-only peer networking events, or industry events.
It’s important to have clear personas
Brands invest an inordinate amount of money on content that isn’t fit for their audience. That struggles to provide value because the target is too broad.
When marketing to small business owners, the tendency is to produce entry-level advice for every type of SME business owner, which doesn’t resonate with leaders of larger companies.
Part of the issue is the depth of understanding of their personas’ challenges, part is the lack of specialist editorial knowledge; you need to know an industry inside out to create compelling content.
Understanding your audience’s challenges allows you to develop your more effective marketing messaging. Breaking down the SME category into smaller target audiences is a key part of that process.
Hopefully, this post has given you ideas that can help make your personas and marketing more specific.
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If you want more examples of challenges business owners face, we’ve created a free list with 53 ideas you can write about broken down by business size.
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If you want to talk to our team about developing your content marketing strategy, you can connect with me on LinkedIn or email Chris@Inkwellagency.co.uk.
