Originally published in BtoB Blog, August 19, 2011.
SMB—small and medium business—is a widely accepted term for audience segmentation. Most marketing professionals tend to lump small and medium businesses into one category and large enterprises into another category. On the surface, such division seems to make sense.
To validate this strategy, Intel Corp. conducted a study of SMB technology and PC needs in the U.S., China and India.
The findings were surprising and changed how Intel segments and markets to SMB. You might find the results surprising, too.
We conducted 61 in-depth interviews with small and medium businesses with and without IT (information technology), covering a variety of industries in the U.S., China and India.
We discovered significant differences between small and medium businesses:
|Small Business (without IT)||Medium Business (with IT)|
|IT environment||Business operation-oriented||IT project-oriented|
|Technology recommendations||External vendor recommendations||Internal team debate and external vendor recommendation|
|Purchase channel||Relies mostly on retail outlets, also leverages trusted vendors||Relies more on trusted vendors|
|PC/server refresh cycle||Keeps devices or PC until they break||Informal refresh cycle|
|Security||Self-rated as ‘high’ but little actual spending to address it||Makes an effort to address security concern|
|Infrastructure and technology needs||Employee size and presence of IT play a key factor. Employee size <20 is very different than that of employee size >100 (medium-sized companies)|
This chart reflects substantial differences between small and medium businesses. Lumping small business and medium business into one segment obscures the real differences between them and often inflates the true small-business potential.
Based on these findings, we changed our audience segmentation. We treat small business as its own segment and categorize “medium” and “large” as one category yielding two go-to-marketing strategies: small-business strategy and enterprise strategy.
Intel is an ingredient brand and does not sell end products directly to small businesses. Instead, we leverage different distribution channels such as OEMs, selective retail outlets, Intel’s channel partners and others to reach out to small businesses indirectly. Taking OEMs as an example: Intel not only sells micro processors to OEMs, we co-market with OEMs. For instance, you may see some OEM’s TV commercials with Intel’s processor logo and the company’s brand tone. In addition, we provide a marketing kit that includes the messaging, content and creative templates for OEMs that are interested in leveraging them.
Intel is not the only company focusing on small business as a separate segment. Several technology companies have figured this out. HP and Dell have specific web pages targeted to small business.
IBM is an interesting example. IBM aligned its marketing campaign with its corporate initiatives and launched the “Smarter Planet” campaign in 2008. This campaign conveys that IBM offers business solutions to companies to help address some of the world’s most significant problems such as improving health care, environmental protection, energy consumption and education. In the past year, this campaign specifically called out medium-size companies as its key focus.
How does your company treat SMB?