SMB marketing for software vendors

Sandhill has an article about marketing software to small- and medium- businesses (SMB). Quite frankly a lot of it has been said several times before, but very few people are able to accurately quantify the size of the SMB market.

I know Meryl at SYSPRO reckons that the major enterprise software vendors have significantly over-estimated the size and potential of the SMB market. For example, according to Microsoft SA’s SMB group, the local market looks like this:

                                 Small         Mid           Corporate     Enterprise

# PCs                  <25         25-500       500-1000      >1000

# Employees         1-49        50-1000     1000-5000     >5000

# SA entities        578,000    19,000         <200            <20

But how much of the 19,000 mid-size companies are viable customers for the ERP majors?

 The Sandhill article makes the usual comment about creating “a complete product offer with the right fit”. My problem with that comment is that it is the people in Redmond, Walldorf and Redwood Shores (aka, HQ’s for Microsoft, SAP and Oracle) who typically make the product decisions. But invariably they have minimal knowledge about local situations and conditions, especially in developing countries. What they tend to come up with is a global product set that works in the US, and maybe other similar countries like the UK, but the rest of the world struggles to make it work.

Instead they should develop a framework of products and give local in-country subsidiaries responsibility to tailor specific products to local requirements. But that would require having marketers in-country who were actually knowledgeable and creative, and not just executers (gasp! note my distain).

What I do like about the Sandhill article is the point about creating a “marketing pipeline” that drives awareness, brand consideration, product consideration, preference and leads. In SA, the only international vendor that seems to be doing this well is SAP; you wouldn’t think Microsoft had ERP solutions, and Oracle seems to only focus on the larger opportunities.

The reason why local ERP vendors can do well is that they know the local market in breadth and depth, are close to the market and therefore can react quicker, and can tailor products to more closer match local requirements. More power to them!


2 thoughts on “SMB marketing for software vendors

  1. Pingback: Learning from B2C marketers « The Manticore blog

  2. There were some good ideas in the article, but I completely agree with you regarding global offerings and local markets.

    I worked for a company where solution portfolios were developed in the US and we had a hard time gaining traction in Eastern Europe and the middle east (culture, value, business conduct/behavior, etc).

    In some cases, the local markets were not ready for the products or service offerings (or there wasn’t a real fit due to business models.) In others, they were offered at prices that just couldn’t fly. It is also worth noting that in some cases, the field lacked capability & readiness to sell it.

    It was eventually fixed by assigning regional leaders with hands-on insight into local markets and engaging them into the portfolio management and deployment planning sessions.

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