Selling Technology To Small Business: 7 Insights From Top Innovators

Written By: Dharmesh Shah October 4, 2006

I had the opportunity today to attend a conference held by Longworth Ventures Partners.  Longworth is a VC firm here in the Boston area. 

The most interesting session of the conference for me was “The Internet Empowering Small Businesses”.  The speakers for this session were very impressive:  Jana Eggers, Director of the Intuit Innovation Lab, Gail Goodman, CEO of Constant Contact and Robert Keane the CEO of Vista Print.

Of course, Intuit needs no introduction.  Jana herself is impressive and very thoughtful on the topic of what it takes to successfully build and sell products for small businesses.  Gail Goodman is someone I have heard a lot of good things about  over the past year (she’s on my list of people I would love to have as a HubSpot advisor some day).  Her company, Constant Contact has created an immensely successful product for do-it-yourself email marketing.  By any measure, the company is a phenomenal success.  Last, but not least, Robert Keane, the CEO of Vista Print has basically built what by all accounts is a money-printing machine.  The company went public earlier this year and now has a market cap of over a $1 billion (yes, that’s billion with a “B”).

As you might guess, I’m really impressed with all three of these speakers (and I’m not an easy guy to impress).  Could not have hoped for a better line-up for this particular session.

7 Insights From Top Small Business Innovators
  1. Ease Of Use Is Critical:  This should not come as any big surprise.  Each of the companies represented emphasized how important it was to ensure that the product is simple and easy to use.  Ease of use helps both at time of customer acquisition and as the company starts to scale with volume.  Problems with usability lead to all sorts of other problems (not the least of which is higher attrition rates and higher support costs).

  1. Experiment Continually:  One of the most intriguing comments by two of the companies was how much time and energy they spent on experimenting with the business to figure out what worked and what didn’t.  Vista Print went so far as to run controlled tests to see what kinds of things impacted conversion rates, abandon rates – and ultimately purchasing patterns.  Vista Print seems to be doing a particularly good job of this and has a highly analytical approach to figuring out the drivers of their business.  

  1. Contact Info Provides Reassurance:  One of the companies stated that customers buy twice as much when they have some way to contact them (phone and/or email).  The reason is that when small businesses are trying a new technology, the fact that they have access to someone for help is sufficient reassurance for them to continue the process.  The result is higher completed sales and more “up-sells”.  Of course, not many people actually contact the company, but just having the ability to helps.

  1. Psychographics vs. Demographics:  Traditional approaches to segmenting customers based on demographics is not as effective as doing so by psychographics.  For example, a small business owner who is a “corporate refugee” will often manifest behavioral patterns that are much more like a big business.  This is because their prior experience in a big company causes them to run their small business with some of the same ideas and concepts.  Another small business owner, in the same industry, might have a completely different approach to her business.  Understanding the psychology of how customers think helps determine why they buy – much more so than coarse-grained segmentation based on demographics.

  1. Terminology Is Important:  When dealing with small organization, it is important to convey your message using terms that resonate.  For example, Constant Contact sells to non-profit member organizations (like trade associations).  In this case, the concept of “email marketing” doesn’t resonate that well (they don’t feel like they are marketing) and they don’t think of their constituents as “customers” or even “clients” – but as members.  Expressing your ideas in the terms of the organization to which you are selling helps.

  1. All Roads Lead To The Website:  When Constant Contact does its own marketing, it makes sure that all of its “calls to action” ultimately lead to the website.  From there, the focus is on converting these leads to customers.  By ensuring that they have a consistent “path” from their various marketing channels to a single point of entry (their website), they can keep their customer acquisition costs down.

  1. Direct Customer Feedback:  All three of the companies were emphatic and passionate about the need to get “direct” feedback from the customer.  Intuit takes this to the extreme by not having “focus group” meetings, but actually visiting the customers where they work and watching how their software is used (or not used).  

If you found this article of interest, let me know (a vote on reddit or digg is a great way to do this).  I have another potential follow-up article describing lessons from one of the other sessions at this conference (on the topic of Enterprise Web 2.0), but don’t want to write it unless there is sufficient interest.

Related Posts