Bredin Report: The Myths that Contribute to SMB Churn

Regardless of where the economy is headed, competition for SMB customers will continue to be fierce. Protecting your customer base requires understanding the drivers of churn – and looking beyond some of the common myths around SMB behaviors. For example:

  • It’s a common misconception that at SMBs, there is one purchase decision-maker. In fact, Bredin research shows that multiple stakeholders are involved in the purchase process at even the smallest businesses. The better you address each of their questions and concerns during the sell-in process, the more likely they are to be satisfied with – and keep using – your solution.
  • Another common misconception is that SMBs are monolithic – for example, a given product feature is equally useful to all small businesses. In fact, SMBs are incredibly diverse, whether by size, industry, growth outlook, age of owner, or other attribute. Ensuring that your offering serves the varied needs of your target segments is essential to maintaining incumbency.
  • We’ve also seen clients assume that SMBs can deploy solutions on their own. While this certainly might be the case, it is not a given, especially if migration or integrations are involved. A key part of the sell-in process is understanding how to set your customer up for success post-purchase, for example with technical support and training, to ensure they continue to use your product.
  • We’ve also seen clients decrease live support options, on the assumption that SMBs want to do 100% self-guided support. While some SMBs (and especially very small businesses) don’t want to engage with a customer support rep, most (especially larger SMBs) do. If SMBs can’t get the personalized support they want, they’re ripe for competitive pick-off.
  • Another assumption that can undermine retention is that SMBs don’t value security or compliance as much as larger businesses. While our research shows that businesses with fewer than 20 employees generally place less importance on data security than mid-size businesses, it’s still important to them, and very important to businesses with 20 or more employees. A solution that underperforms in security or compliance is a candidate to be replaced.
  • If you do annual renewals, or want to promote product upgrades, be sure to provide plenty of lead time. It’s a common misperception that the decision-making process at SMBs is quick. It’s generally not (depending on the product category), in large part because SMBs are so busy with day-to-day business issues. To avoid inadvertent cancellations, give your SMB customers plenty of time and support to assess renewal or upgrade options.

So how can you reduce SMB churn? Here are a few best practices:

  • Understand who your key audience is. Knowing your key segments will boost the effectiveness of your sales and marketing efforts.
  • Understand their purchase process. Knowing who to target within an SMB will facilitate both sales and retention.
  • Understand the features that are important to your target. Don’t let developers or partners tell you what SMBs want; ask your prospects directly.
  • Pay attention to the onboarding process. Effective onboarding greatly enhances usage and satisfaction.
  • Be sure your product is intuitive and easy to use. The faster SMBs see benefits from the use of your product, the more likely they are to keep using it.
  • Create features that build retention. Product evolution is key to retention; ensure you maintain at least competitive parity, and provide features that boost utilization.
  • Ensure you understand customer usage and satisfaction. Your internal analytics might show product usage patterns, but not satisfaction. Ask your customers how much they value your products. Weakness in satisfaction ratings can be an early warning of potential churn.

Need help understanding and/or engaging SMBs? Bredin can help you understand SMB needs and preferences quick-turn, actionable market research. We can also help you develop high value content and social media posts to boost SMB awareness, brand perception, leads, conversion and revenue.


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About Bredin

Bredin was founded in 1991 by America's foremost small business expert, author and syndicated columnist Alice Bredin. From its beginning, Bredin was designed to be a breed apart: 50% research consultancy, 50% creative agency, 100% focused on SMB. Based in Somerville, Mass., Bredin helps Fortune 500 companies understand, reach and retain SMB customers through timely, targeted research and award-winning marketing programs.