Raising the stakes: how can the channel respond to new SME demands?

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By Andrew Garney, Global Partnerships Manager, BaseKit.

From a glance at any national news outlet, it's clear that small businesses are high on the agenda. Small to medium-sized enterprises (SMEs) are frequently touted as "the lifeblood of our economy" and "an inspiration to us all" by politicians and public leaders; hardly surprising given that smaller firms account for 99 per cent of all private sector business.

Yet despite a combination of simplified regulation and greater access to capital helping SMEs make their mark, it remains as challenging as ever for a small business to establish itself. Buyers at SMEs are still pressed for time and resources. So how can the channel help?

Service providers in certain industries are stepping up. Telecoms resellers for example have embraced the ‘multiplay’ concept, grouping core telecoms services in with other, non-traditional essentials. Yet SMEs across a range of vertical sectors will share common grievances, including frustration with managing numerous suppliers, so the more products that service providers can offer to this audience, the more value they can generate.

The small business owner

Despite what could be construed as a smaller remit, the small business owner has a long list of responsibilities. In a highly competitive market the need to remain flexible is paramount. Yet SMEs are often faced with the added pressure of managing a cumbersome list of suppliers, a process which over half of SMEs believe they would be better off without.

Regardless, SMEs still need a range of services to help them grow. In addition to telecoms services and other logistics, today’s SME likely requires a strong online presence, requiring hosting, security, storage and even web design services. As the example above suggests, SME owner’s won’t be willing to go to a different service provider for each of these needs. The service provider therefore needs to adapt to this new demand by adding all manner of services to its portfolio.

Adapting to change

One reseller doing just that is Acens, a subsidiary of Telefónica with operations across Europe. Conscious of the need to add more to its existing offering in order to target SME buyers, Acens recently added website development to its product portfolio to meet the changing demands of its audience. Doing so has not only allowed Acens to add greater value, it has also prompted a surge in demand for several of its other services. It’s not unrealistic to expect to see others doing the same with products such as web hosting, storage and software-as-a-service based on this precedent.

Keep them coming

Crucially, this helps boost buyer retention and customer longevity as the SME buyer begins to trust service providers that can offer a broader portfolio. Whereas IT service providers may have previously specialised in providing fast solutions to complex problems, the changing nature of SME demand is prompting many to prioritise a long-lasting appeal by including the type of service likely to keep the buyer returning consistently – this is known as ‘stickiness’.

For SMEs just starting out, this approach helps nurture a relationship between service provider and buyer, allowing the former to position itself as an important partner in the lifecycle of the SME..

Seizing the opportunity

Importantly, control is now in the hands of the small business owner. Well aware of its options and resentful of the need to manage various supplier payments each month, the buyer isn’t likely to return to service providers that can’t meet its needs.

This represents a golden opportunity for the channel to reassess its core activity and put diversity at the heart of its approach to SMEs, helping them to navigate an increasingly competitive landscape by adding as much value as possible. With responsibility for as much as 99 per cent of the UK’s private sector business, the SME market is one that the channel can’t afford to ignore.

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