Each month, we survey 500 SMB principals to keep track of their evolving needs and priorities. We recently asked how long it takes SMBs to make a purchase in a variety of categories. The wide range of purchase decision timeframes has implications for your lead nurture efforts.
SMB product research timeframe
SMB purchase decision timing varies significantly by product category. Almost half of SMBs in our survey take about a week to select a printer, a tablet or Internet access. Conversely, more than half of respondents take three months or more to make a decision about a retirement plan, and roughly half take three months or more to make a decision on business insurance.
In general, purchase decisions are quick for items that are relatively simple, in relatively undifferentiated categories or are frequent or repeat purchases. For example, a larger SMB may standardize its multiple locations on one printer brand, or negotiate a deal with a tablet reseller, making additional purchases routine. Other contributors to quick purchase decision-making include:
- The dominant purchase criteria are straightforward, such as bandwidth and price in the case of Internet access, or costs in the case of a business checking account
- Limited vendor options
- Low risks of a bad decision
- Critical business need
On the other hand, infrequent and relatively complex purchases such as a payroll or HCM solution, insurance, or a retirement plan often require extensive prospect education. These categories can also have significant adverse consequences for a poor selection. They may also seem to time-starved and revenue-focused SMBs like “should do” or “nice to have” categories, as opposed to “must have” offerings, e.g. Internet access.
Millennial SMB principals are more decisive
There are few differences in purchase timing by company size. The only ones of note are that very small businesses (under 20 employees) are most likely to choose a checking account, business credit card or tablet in a week, while mid-sized businesses (100 to 500 employees) are most likely to take a month. There aren’t many differences by company age either; younger companies are only more likely to choose a web hosting service faster than older companies.
Younger entrepreneurs are generally faster decision-makers than their older peers. For example, Millennial SMB principals are most likely to decide on a business loan, application software, cellphone carrier, payroll service provider or health insurance carrier within a week, while Gen Xers and Boomers are most likely to take a month.
What are the implications of purchase decision timing for your lead nurture efforts? First, brand awareness always helps to increase the odds that you’re in the consideration set from the start. Search is essential too, of course; SMBs are highly dependent on search for discovery, not just research.
If you’re in a “slow decision” category like insurance or retirement plans, it’s especially important:
- To ensure your sales reps (or resellers, agents or brokers) check in on interested prospects regularly
- Not to assume that a dormant prospect is a lost sale; priorities can change quickly for busy SMBs, but patient outreach such as one-off emails (or a newsletter) can revitalize cold prospects
- To provide educational content to help your prospects understand your offerings, and how you will help them achieve their business goals
- To provide demos and tutorials to enable them to envision how they will use your product
Need help understanding and/or engaging SMBs? Bredin can keep you up to date on evolving SMB needs and challenges through quick-turn, actionable market research. We can also help you develop high-value content to boost SMB awareness, brand perception, leads, conversion and revenue.