The Big Challenges of a B2B SME

Let’s start by defining B2B. According to WikipediaBusiness-to-business (B2B) describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. The overall volume of B2B (Business-to-Business) transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving sub components or raw materials”.
Regarding the acronym SME the European Comission says that "the category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro”.
This type of business has some special characteristics that make it have to often face unique challenges. Let’s review some of them:
Sales cycles and specialization

Sales cycles and learning curves are typically much longer than in B2C. Let’s think ie in a small automotive supplier.  Frequently the number of customers of this kind of enterprises is quite small. However although the target audience is usually smaller than in B2C, yet multiple people from different departments and levels within the company are involved in the buying process (Engineering, Maintenance, Procurement, Operations, etc.). This means that SME need people with accurate profiles capable to interact with line managers, maintenance workers or senior engineers at the same time that they deal with the commercial process (in many cases it can take more than 1 year) and educates the customer’s staff. The challenge is obvious: by definition a SME has a small number of employees but  they have to be prepared to deal with all this.
As hinted before  a B2B marketer needs to engage its customers and prospects throughout a complex customer life cycle that frequently lasts longer than a business-to-consumer (B2C) life cycle. As if that was not enough great numbers of B2B companies are not in direct contact with their end-customers. B2B Marketing Strategies are often “push” rather than“pull” and this generates a certain lack of market knowledge.

And something else: SME are not embracing (at least not enough) the power of Social Marketing. Over half of B2B companies are not tapping into social media’s potential as a lead generation tool. However a recent Forrester survey pointed out that some 48 percent of B2B social marketers plan to increase their lead generation usage of LinkedIn discussion groups and pages, due to the high usage of LinkedIn by senior decision makers. At the same time B2B marketing has historically relied on below-the-line interactions – interactions that social media can take to a whole new level.

Channel strategy

Whether the company is part of a great brand distribution channel or it needs to develop its own channel to sell their products,  developing a suitable channel strategy is key for a SME to be successful. In the first case, the manufacturer will audit the SME for commercial, technical and financial solvency and, believe me, this is not an easy task.

In the second case, the SME should do the same with the candidates to become part of its distribution channel. However, due to resource constraints and capabilities it is not always done in a professional way.

On the other hand, it is very important to develop a very aggressive policy of innovation and added value for the dealer. If not there is a high risk: our partner can be tempted to abandon us when we need him most and become our competitors after investing many resources in training.

Of course, there are many other challenges that a B2B SME must face (talent managementproductivity, communication or strategy among others) but those addressed in this post are probably the most critical factors for the success of the company.