15 June 2021

Mica Zuniga

The SMB Market and How You Can Expand Your Market Shares Through It

As a materials producer, your goal is to serve your customers, build loyalty, and improve profit margins. The challenge is that some customers — typically small-to-mid-sized businesses (SMBs) — are inherently more difficult to serve because their needs are drastically different from larger companies. Although SMBs comprise as much as 30% of your market share, meeting their needs becomes more time-consuming, and therefore less profitable, so entire markets are served at a lower priority.

The SMB Dilemma

Although achieving 100% customer satisfaction is nearly impossible, no company wants to alienate 10-30% of its customers. At the very real cost of losing business year over year, it’s extremely common for materials producers to focus on growing the most strategically profitable accounts. When any group of customers has a much higher cost-per-order or sit in a highly fragmented market, serving them at a high level simply isn’t profitable:

SMBs require more technical expertise and assistance than larger businesses with technical SMEs on staff, which often puts a strain on producer sales and tech teams.

SMBs typically order much smaller quantities, which results in higher costs to fulfill across labor, packaging, and shipping.

SMBs often need more hand-holding and more customer service touches to finalize an order.

Choosing not to cater to SMB needs is not about not wanting their business, it’s simply a business decision about where to deploy resources for the greatest profitability. Unfortunately, that comes at the risk of losing customers and developing a poor reputation in the marketplace.

Solving the Dilemma

Because SMBs choose vendors based on their performance in four key categories, the solution to the dilemma lies in finding a way to serve their needs without burdening your sales and tech teams. When producers can deliver across these areas, SMBs reward them with increased customer loyalty — and they share their experiences with their colleagues and their competitors.

Operational Reliability — SMBs expect producers to consistently meet essential operational expectations including product quality, availability, and reasonable order fulfillment timeframes.

Price — For SMBs, the bottom line is critical, so producers must provide high-value offerings that are competitively priced.

Business Acumen — SMBs value producers who offer support in the form of providing advice, business acumen, and insights into emerging trends and best practices.

Caring — Although caring is harder to quantify, SMBs place a high value on building relationships with people who care about their business, success, and customers.

Within these categories are 18 additional criteria that SMBs use to evaluate their vendor relationships. 

The Xenon arc Solution

Our solution to the SMB dilemma is simple — we find a way to serve your SMB customers on your behalf the way you would if they were your top priority, leveraging industry-leading digital and technology-driven solutions to transform your direct-to-market strategy.

Better yet, we help materials producers increase market penetration across four key growth pillars:

Cross-selling to deepen market share within the existing client base.

Recovering historically lost business and dormant accounts.

Acquire new customers to drive growth in key markets or categories.

Leveraging digital solutions to engage new and existing customers and expand market share.

To learn more about how we can help your business unit expand market share in the materials or ingredients industry, contact today.

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