Firmographics are critical in identifying growth opportunities. Cargo’s Miki Velemirovich identifies three factors defining recovery for Small Businesses—and when Big Brands should reach out.
The other day, I was walking down the street in my neighborhood (because what else is there to do, right?). I noticed something very striking: music thumping from a small computer repair shop; customers lined up in front of the door, properly social distanced of course; and masked employees happily servicing IT needs.
Yet, a few steps down, a very different picture: a travel agency whose sign on the window read, “We are closed due to Coronavirus. Will re-open on April 15th.” But the door was still locked, sun-bleached brochures of tropical destinations still on the shelves.
A stark difference between two Small Businesses in two very different industries.
While COVID-19 has dealt a hard blow to Small Businesses across North America, not all have felt the effects of the crisis in the same way. And that made me think, What will the Small Business Owner (SBO) recovery look like? And if you’re Big Brand serving the SBO sector, where should your focus be?
Firmographics, using industry attributes to create distinct market segments, have always been very important when marketing to SBOs. And now, they are not just important, but critical. To better understand which SBOs will recover more quickly than others, three factors hold crucial importance.
1. LOCATION, LOCATION, LOCATION
State and provincial governments hold the power when it comes to the shutdown and economic re-start. We saw it at the beginning of the pandemic and again with resurging cases in some regions. What does this mean? The economic re-start for SBOs is not a national play, but a regional one.
Another important consideration, and one that drives even more granularity in targeting, is the size of the city or town in which a particular business operates. Large metropolitan areas in the US and Canada have seen much higher levels of COVID-19 infections, due in part to the difficulties to effectively distance, and, in turn, slower rates of recovery. On the other hand, SBOs located in smaller metros and towns have seen quicker opportunities to get back to work.
In order to take advantage of those areas that are allowing SBOs to resume operations, your national re-engagement strategies should give way to regionally focused plays instead.
Keeping up to date on government policies is key to knowing which parts of the national market are re-opening. Messaging directed to SBOs who are removing the shutters and seeing the light is very different to those who are still closed and wondering what the future holds. And this is critical to not sounding tone deaf.
2. THE OLDER AND BIGGER, THE BETTER
Young businesses (less than 5 years old) and smaller businesses (less than 20 employees) will face greater challenges during recovery. These businesses typically lack great degrees of liquidity and have greater credit constraints, so they are more sensitive to weak consumer demand.
Without cash reserves, and difficulties in obtaining badly needed fiscal help or bank-issued loans required for the re-start, the opportunities to revive will be more limited than more established and larger businesses.
However, this is not to say that they will not recover; they will simply see a longer road to get to improved revenue and profit levels. Therefore, the targeting exercise must integrate size and lifecycle of SBOs.
Older, more established, and larger businesses will see opportunities a lot earlier than their younger and smaller counterparts. So, this needs to be the focus for you as a Big Brand. Both groups will provide opportunities, but it is all about timing and looking for opportunities in the right places.
3. THE INDUSTRY TYPE
This is perhaps the most important element that will define the SBO recovery. Until a vaccine is available, consumers will demand “low-touch” environments, from virtual and remote to touchless everything.
Naturally, the hardest hit industries are the ones who rely on large gatherings, close human interaction, high levels of hygiene, and travel. The speed of recovery for these industries, of course, rests on the re-design of operations to minimize the “high-touch” environment and to make their customers feel safe through digitization of purchase journeys, curbside pickup, deliveries, touchless payments, and virtual interactions. However, for businesses unable to adapt fast enough or for low-demand goods and services, the pains will be severe and long lasting.
So, what does this mean for Big Brands facing the evolving SBO market?
It’s simple: don’t go after them all. Not all SBOs are ready for messaging and engagement. The approach needs to be phased to achieve best results.
Focusing on the fast recovery industries with historically low reliance on “high touch” environments must be of immediate priority. They are running. And some are downright growing. So, help them grow.
Remember, SBOs are looking to partner with Big Brands that understand their growth strategies and can help achieve them.
The industries with historically high reliance on “high touch” environments are not ready. But here is a critical point: many businesses in these industries will be the ones with the fastest pace of innovation, leading to heavily adapted operations and business models to fit the changing consumer demands.
This presents a tremendous opportunity for Big Brands to support them through the re-invention journey, to provide help to get them to their end goal. If you join SBOs in their journeys of reinvention, you just may have a customer for life. Recovery factors for SBOs is just one of the areas we explored when looking at “what’s next” in marketing to Small Business.
We shared our initial findings and insights in our free webinar, The Forecast: The Dangerous New World of Marketing to Small Business. Check it out here.
Miki Velemirovich is President of Cargo. There are three things that no one can do quite like he does: rock a suit, craft a Negroni, or understand the pain points of Big Brands trying to market to Small Businesses. After 20 years helping IBM and Mercedes-Benz crack the code, Miki knows what clients need and how to build strategies that drive real results. At Cargo, his quest persists: helping Big Brands successfully reach this elusive target.