56% of SMEs don’t trust big corporations to understand their business challenges
Over a third (34%) of SMEs expect to switch service providers for their telecom, banking, and utilities over the next 12 months
Service providers don’t care: 60% of SMEs feel neglected and underserved by their service provider
Over half of SMEs (51%) would be happy to work with a disruptive challenger business
Design and innovation consultancy Adaptive Lab today releases its ‘SMEs: Smallish Misunderstood Enterprises’ report, highlighting SME attitudes towards their services providers, including utilities, telecoms networks, financial services. The study uncovers that a lack of empathy and generic product offering from large corporations drives dissatisfaction and barriers to growth for the SME sector.
Based on a survey of 500 SMEs across the UK, along with in-depth interviews with business owners, the downloadable report explores how business service providers can succeed in an underserved and undervalued, yet profitable market. The study aims to help providers understand the small and medium-sized business community’s unique wants and needs.
Identifying a number of disconnects between what SMEs expect from their service providers and the reality, Adaptive Lab’s study reveals that 56% of SMEs don’t trust corporations to understand the challenges of running a small business. 59% of business owners surveyed think that services offered by corporate service providers are ‘a one-size fits all’ and not tailored to their needs.
The report outlines how SMEs should be categorised, according to each businesses’ unique ambition and complexity. One size does not fit all as over 60% of the high ambition businesses* feel underserved and undervalued by their big service providers, while over half (55%) of mid ambition SMEs admit they believe that large corporate service providers often make them feel small and unimportant.
In addition, the report exposes more warning signs for traditional providers. Over half of SMEs (51%) said they would trust challenger and start up businesses to provide their services. SMEs prefer smaller, more empathetic service providers, who know what it’s like. Alongside this perception, 58% perceive a smaller business as more innovative and agile in developing products for their needs than a big corporate.
Chris Moisan, Principal at Adaptive Lab commented:
“Working with business service providers we saw the same thing time and time again. Most service providers approach the SME segment as a homogeneous community, ignoring their diversity and unique needs. Is the definition of an SME still fit for purpose? The small and medium business sector is a mighty force in our economy. The opportunities are huge for any business willing to rethink their approach and reimagine services for SMEs so we wanted to better understand the issues and scope of possibilities for both sides.”
For any of the service categories Adaptive Lab surveyed, including telecoms, banking and insurance, business owners struggle to distinguish between the levels of service they used in their personal lives and the small business service they used in their professional lives. 42% of SME owners shared that the digital experience of their business products and services lagged behind that of their personal, yet the business services were often more expensive.
When it comes to what business owners and key decision makers think of themselves, half of those surveyed stated they think their needs are unique, and a fifth wouldn’t even classify themselves as an SME.
Comment on this further, Moisan added:
“Given the prevalent attitudes, mis-labelling and lack of empathy shown by existing providers, it’s no surprise that high levels of disloyalty exist amongst small business owners. In the case of such categories as insurance, utilities and telecoms, this survey found more than a third of SMEs expect to switch in the next 12 months.”
In fact, many SMEs are so hungry for better quality products and services that they would even be willing to pay more for them. Around 55% say they would be happy to pay a premium for an offering that was simple and easy to use as it would free up time to focus on their business.
The ‘SMEs: Smallish Misunderstood Enterprises’ report details the huge opportunity and threat
to incumbents and recommends specific steps that service providers can do to win with SMEs, including:
Opportunity and threat to incumbents
· Switching behaviours by category
· Why SMEs prefer smaller, more empathetic service providers
· The business case: SMEs are willing to pay for better services
Winning with SMEs: creating services they’ll love
· How services providers can address key functional needs of SMEs (simplicity, flexibility, scalability, accessibility and agility)
· How providers can support the emotional needs of SME business owners (empathy, support, connection, and validation)
· How a more meaningful segmentation rich in context can underpin a winning strategy