Know Thy (Potential) Customer w/ Merle Sandler

In the world of IT research, Merle Sandler, senior research analyst on the small business and home office team at IDC, focuses on the end user—your customer. In a conversation with Managing Editor Cecilia Galvin, Sandler explains how small and midsize business (SMB) owners think about technology, what their priorities are, and how you might break down the IT barriers with these customers.

ChannelPro: What is the IT environment like at these SMBs?
Sandler: To IDC, a small business has fewer than 100 employees and a medium-size business has 100 to 999 people. Only when a company hits 50 people is there a 50 percent chance that it has a full-time IT person; up to that size the IT role is played by someone wearing a variety of hats—and that could even be the owner’s teenage son who comes in and does [IT work] on the weekend. When a company reaches 100 people, the IT person would be an IT generalist. It’s only when you get to 500 or so people do the specialists— the IT networking people—come on board.

Even if there’s an IT person on the staff, IT decisions will typically rest with the owner/managers, and too often they’re fairly clueless regarding IT. Their decision making may not necessarily be, “Do I get a server, a wireless network, or Voice over IP?” It could be, “Do I get something I don’t understand or a new boat?” So the message the VAR crafts needs to be, “If you invest in the IT infrastructure, it will help grow your business and maybe down the road you’ll be able to afford a bigger boat.” It’s about solving business problems. But the VAR needs to understand if the owner would invest in IT to save money or to be more efficient and expand the business, or if he or she is worried about ROI when investing in technology.

ChannelPro: How should IT providers approach these potential customers?
Sandler: What’s important for small firms is that something is easy to use, install, and maintain. These are critical aspects, because they don’t have full-time IT people. Price is also important, but they’re not necessarily going to go for bargain-basement pricing to save money. Owners want to know, are they getting good value for money? So the VARs selling into small businesses really need to be trusted advisers.

A lot of small businesses also like doing work with other local small businesses—like Joe the VAR around the corner. They feel that small IT business owners can understand their problems. That’s where some vertical orientation on the part of the VAR could help. He or she might focus on the retail industry or manufacturing to develop in-depth knowledge of the customer’s business.

ChannelPro: What else is unique about SMBs?
Sandler: They don’t think of themselves as SMBs—they think of themselves as what they do. I’m an accounting firm, I’m a real estate firm. And they have very different characteristics. The companies with 50 or more people act more like medium businesses, and the ones with 500 people act more like large firms. One size doesn’t fit all.

Not all SMBs are planning to grow their businesses—some will aspire to being larger businesses, but some want to continue just as they are, and these may be the companies that are more suspicious of IT.

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