If you keep ignoring the SME market, it’s going to vote with its feet--and work with firms that really care
The world has an estimated 400 million small-to-medium sized businesses, and in most geographies they make up the bulk of all commercial organizations, yet far too many feel they don't get the same kind of attention and customised services as their larger competitors. There's a perception gap here on the telco side that can – and should – be closed
Every business needs services that enhance productivity – but many struggle to obtain these from traditional connectivity providers
It’s a little surprising to say that in 2022, most small to medium-sized company leaders have fairly low expectations for the services they obtain from their telecoms partners.
Given that the 400 million SMEs in the world are the backbone of the global economy and are responsible for more than 50% of employment worldwide, not maximising opportunity in this market has long been short-sighted.
There’s a real danger, though, that telcos could end up taking this customer base far too much for granted. To take just one example, in 2015 the UK sector regulator, Ofcom warned that a “significant minority” of commercial broadband users it had polled suffered because of issues such as a lack of widespread superfast broadband availability.
Worryingly, this had been accompanied, it said, with “dissatisfaction in relation to quality of service”. Given that the country’s nearly million-plus SMEs constitute 99.9% of UK businesses, account for 60% of private sector employment and 47% of business revenue, this could be the start of a real problem for companies wanting to succeed in this market.
After all, Ofcom is surely right to say that high quality communications connectivity is essential to this part of the economy’s ability to “participate in and drive” the digital economy—but it isn’t happening enough. There’s data everywhere proving how hobbling poor service is to the smaller brand: again, in the UK, business website City A.M. recently published exclusive findings of research that showed British SMEs are losing £18.77bn a year because of poor connectivity.
That survey also shows that micro-businesses and small to medium sized firms who provide their employees with work phones currently lose an average of a full hour of working time per employee per week: for medium-sized businesses, this equates to 250 hours of working time per week. Some of these guys say they’re burning 16 hours a month on the phone to supplier customer service teams, time they’d probably prefer to be spending on actual revenue-generating activity; another UK survey found one in two would love to dump their current broadband provider, but don’t know where to turn.
As yet. But they will, soon, as this hassle and wasted time gap costs billions to the global SME every year. Frustratingly, it’s a pattern repeated beyond that one G7 economy; Deloitte reports that lower levels of Internet access translates to a GDP impacts amount to $6.6 million per day, and to $0.6 million per 10 million population per day, for medium and low Internet connectivity economies, for instance.
Not seen as a proper business?
No-one is suggesting telcos are doing this on purpose. Far from it. But, one under-discussed reason for the service gaps is that a lot of SMEs are actually micro-enterprises. There are different ways to calculate the size of such businesses worldwide--the UK government says that of the 5.6 million businesses it knows about, 5.5 had under 49 employees—micro-ones and start-ups often have under 10, while in the US, the cut-off is a more generous 250—but across the world, most telcos consider a group of under 10 people to be consumers, not a business.
That means they don't recognise this segment as having the same needs as bigger entities, and so neglect to offer them the same high levels of attention and customer account handling that they for mid-range and enterprise clients. As a result—obviously without meaning to--they may neglect to offer them the kind of small business-friendly SLAs, packages and services that would help them.
The long-term danger here is that SMEs will opt to use alternative providers--seeking services from non-telco players, like Microsoft, who seem to listen to them (and can also offer more integrated help with their telephony, office productivity and cloud needs). The capital markets agree. As Kearney notes, IT firms that would really like your customers, like Google, Yahoo! and Amazon.com have a combined market capitalization of $226 billion, while the world's three largest telcos (fixed-line and mobile telephone companies), despite having nine times their combined revenue, have a similar valuation between them.
No-one in the sector wants this. So, let’s to work together to look after SME customers better. The good news is that with a small amount of work and re-orientation, you can avoid any kind of risk of being demoted to a basic connectivity provider, and instead resume your place as a trusted, long-term SME service and solution partner.
Talk to Gintel today to learn how we can help you establish relevance with SMEs, with compelling propositions that build on your connectivity offers and which offer outstanding user experiences – the kind today’s business, no matter how small, have come to expect. Work with us to build market penetration and loyalty for this vital part of the world’s economy—and indeed, society.