key trigger events that every small business marketer must ...€¦ · • the largest business for...

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ENTERPRISE COUNCIL ON SMALL BUSINESS

ECSB ANNUAL SUMMIT 2012

#ECSBSummit

Key Trigger Events that Every Small Business Marketer Must Know

Presented by Stewart Melanson

June 4th 2012

Turnberry Isle,

Miami, FL


#ECSBSummit

Agenda

Key Trigger Events that Every

Small Business Marketer

Must Know

Influencing Key Decisions in

the Purchase Process

Winning the First Purchase:

Effective Messaging to

Startups

Attack Early

Find Purchase-Ready Owners

Brand

Commercial versus Consumer

Services

Price versus Quality

The Startup Psyche

Top Five Tips for Winning the

First Purchase


#ECSBSummit

What We Know So Far

A focus on stealing

tenured customers is

less effective than you

think.

First purchases are

special—marketers

should focus on

startups to capitalize on

this opportunity.

New owners equal new

opportunities.

So, what are the key startup and new owner acquisition opportunities for

marketers?

Key Finding #1 Key Finding #2 Key Finding #3


#ECSBSummit

Session Agenda

• Key trigger events are

even earlier than you

think.

• Business changeover

represents a two-fold

opportunity.

• Embed yourself in

places that startups

and new owners

frequent.

• Target one-on-one

with focused

campaigns.

Attack Early Find Purchase-

Ready Owners


#ECSBSummit

Recapping the Research Methodology

3 Surveys, 3,527 Respondents (N.A.) • The largest business for sale

marketplace on the internet.

• 500,000+ small business owners

and entrepreneurs each month.

• Over 45,000 businesses listed at

any given time.

• Surveyed 1,227 business founders,

buyers, and sellers about spending

habits and purchase behavior when

readying a business for sale or

injecting growth post-purchase.

Strategic Research Partner

First

Purchased

First Switched

(If ever)

First

Upgraded

22 “triggers” that most closely coincided with

each event

ECSB Survey Methodology


#ECSBSummit

What Doesn’t Matter

Non-Prompting Trigger Events for First Purchases

I experienced significant

year over year growth

I was raising capital/getting

approved for financing

I was turning a profit for

the first time

I experienced a decline in

profitability/cash flow

A new competitor

threatened my business

Fiscal Indicators

I was building my website

I was opening an

additional location or

changing locations

I was adding a new

product/service to the

business

I was preparing to start or

purchase an additional

business

Business Milestones

I was growing beyond five

employees

I was growing beyond 10

employees

I was growing beyond 20

employees

I hired an office

manager/administrative

assistant

I hired an IT

manager/dedicated IT

person

Employee Growth

Source: ECSB Research, April 2012, n=1030 N.A.


#ECSBSummit

0%

10%

20%

30%

Key Trigger Events Driving First Purchases % of owners

Four Triggers Stand Out for First Purchases



#ECSBSummit

Key Events

Time


65% of First Purchases

Happen Here

I was formulating

the idea for my

business.

I was registering

my business/

getting my

business license.

1

2

I was establishing

a business

location.

I was making my

first sale.

3

4

I was selling my

business.

5


#ECSBSummit

Meet Joe and Jane

Joe is starting a home-based

business. 52% of US small

businesses are operated

primarily from somebody’s

home.

Jane is starting a business

located outside of her home.

48% of US small businesses

operate primarily outside of

somebody’s home.

Source: U.S. Census Bureau Survey of Business Owners 2007.


#ECSBSummit

Joe’s Home-Based Business Buying Triggers

Key Categories

• Telecomm: 43%

• IT: 40%

• Office supplies and

furniture: 30%

Key Categories

• Accounting, payroll

or HR: 30%

• Financial services:

27%

• Insurance: 26%

Key Categories

• Shipping and courier:

25%

• Marketing and

advertising: 24%

• Travel and

accommodation: 22%


I was formulating the

idea for my business. I was registering my business/

getting my business license. I was making my first sale.


#ECSBSummit

Key Categories

• Telecomm: 38%

• Financial services:

37%

• Travel: 24%

• Marketing and

advertising: 20%

Jane’s Commercial Business Buying Triggers

Key Categories

• IT: 32%

• Insurance: 24%

• Accounting, payroll

or HR: 12%

Key Categories

• Office supplies and

furniture: 43%

• Utilities: 33%

• Shipping and

courier: 23%


I was establishing a

business location.

I was formulating the

idea for my business. I was registering my business/

getting my business license.


#ECSBSummit

71%

29% Primary source of income

Secondary source of income

―My current business began as a…‖ % of owners

How Can Startups Buy Before Registering Their Businesses?

Source: ECSB Research, June 2009, n=1208 N.A.

Many owners do not

formalize their

businesses until they

are primary income

sources.


#ECSBSummit

A Fifth Trigger: Ownership Change

I was formulating

the idea for my

business.

I was registering

my business/

getting my

business license.

I was establishing

a business

location.

I was making my

first sale.

Time

I was selling my

business.


1

2

3

4

5

Stealing and

Up-selling

Opportunities


#ECSBSummit

Getting Ready to Sell

Source: BizBuySell, April 2012, n=1227 U.S.

Owners take

1-to-3 years

readying their

businesses for

sale.

Selling owners

spend

$21,000 in preparation for

the sale.

The 3 most listed

industries for

sale are

service,

retail, and

restaurants.

The top areas for

pre-sale spend

are

accounting/

payroll/HR,

financial

services,

and

marketing.

With 500,000 businesses changing hands each year, this represents

a significant up-selling opportunity.


#ECSBSummit

Meet Sam: The New Owner

Similar psychographic profile to a startup

founder: growth oriented.

More likely to have future-oriented plans for

the business: excited to hire and looking for

an income opportunity.

Buyers of businesses think similarly to

startups and invest in their newly-

acquired businesses.

Source: ECSB Research, March 2012, n=221 N.A.


#ECSBSummit

New Owners: A Prime Opportunity

Source: ECSB Research, March 2012, n=221 N.A.

43%

New Owners Shop Around

Consider other suppliers

33%

7%

New owners Tenured owners

New Owners Actually Switch

Top 5 Categories New

Owners Switch

1. Financial services

2. Accounting/payroll/HR

3. IT hardware/software

4. Telecommunications

5. Marketing &

advertising


#ECSBSummit

Total Post-Sale Spend by Product Category, in Billions Total USD spend in first year after purchase

Which Categories Do New Owners Invest in Most?

1. Computer hardware &

software

2. Telecommunications

3. Marketing and

advertising

Most Likely Areas to Add

New Products

$1.31

$1.69

$1.94

$2.01

$2.14

$2.43

$3.46

$3.48

$3.78

$3.81

$- $2 $4

Telecommunications

Travel and hospitality

Shipping and courier services

Financial services

Office supplies, equipment and …

Computer hardware and software

Insurance

Marketing and advertising services

Utilities

Accounting, payroll, or HR services

Billions

1. Insurance

2. Financial services

3. Utilities &

Telecommunications

Most Likely Areas to Add

Additional Suppliers

Source: BizBuySell, April 2012, n=1227 U.S.


#ECSBSummit

The Early Bird Catches The Worm


#ECSBSummit

Session Agenda

• Key trigger events are

even earlier than you

think.

• Business changeover

represents a two-fold

opportunity.

• Embed yourself in

places that startups

and new owners

frequent.

• Target one-on-one

with focused

campaigns.


Ready Owners


#ECSBSummit

―I am always looking for information.‖ % of owners

Be Where Owners Go

Likelihood to Follow-up % difference in activity

77%

60%

Startups

Tenured businesses

Source: ECSB Research, January 2011, n=1271 N.A.; October 2011, n=1097 N.A.

Tenured

business

40% greater

follow-up activity

Startups

Startups are information-hungry and more likely to respond to marketing messages.


#ECSBSummit

Key Sources of Information for Startups

Source: ECSB Research, April 2012, n=1127 N.A., LinkedIn, Google Adwords.

600,000 monthly

searches for

“starting a

business” in

Canada & the

U.S.

group has 267,000+ members.

ECSB survey

results found

that startup

owners seek

information in

places we

might not have

thought of.


#ECSBSummit

Embed Your Brand in Their Resources: Advertise

Source: Entrepreneur.com.


#ECSBSummit

Embed Your Brand in Their Resources: Sponsor a Forum for Bloggers

Source: American Express OPEN Forum.


#ECSBSummit

Embed Your Brand in Their Resources: Partner with Incubators

Business that

take part in

incubators

have a

significantly

greater

survival rate

of businesses

that don’t.

Source: Based on a review of 9 studies of incubator survival rates, CYBF.ca.


#ECSBSummit

Key Sources of Information for New Buyers

Small business

influencer organizations

Small business

media properties

Online small

business-for-sale

marketplaces

Small business

tools/services

Source: BizBuySell.


#ECSBSummit

Embed Your Brand Where New Business Buyers Congregate

• Build your brand

during the business

acquisition process

before the new owner

is making supplier

decisions.

• Target by geography

and industry to focus

on the most productive

interactions.

Source: BizBuySell.


#ECSBSummit

Targeting Startups One-on-One

• Many small, local

sources of business

information.

• Maintaining

freshness and

accuracy of business

names.

• Reaching business

at just the right

moment.

What’s Hard Sample of New Business List Providers

Source: ECSB Research.


#ECSBSummit

What MarketForce Delivers: By the Numbers

• Residential addresses

used in commercial-type

business filings

• Residential phone

numbers associated with

commercial new business

information

• New commercial

addresses without phone

numbers

Startup Indicators Annual Universe Public Records

• City, County, & State Business

filings

• Business/Occupational Licenses

• DBA Listings

• Local Tax Filings

Phone Records

• Business Directory Updates

Domain Names

• Registrations at ISPs

3,000,000 new businesses addresses

1,222,000 with phone numbers

1,450,000 with owner names

2,500,000 with SIC codes

Source: MarketForce.

Roughly 50,000 brand new business records become available every week.

Data Resources


#ECSBSummit

Deluxe can now leverage their database to

model prospective customers and optimize

marketing efforts.

Deluxe: Working with Lists to Suit Your Needs

Deluxe imports company names from 12-14

sources.

Deluxe ensures that the data respects their

privacy policies.

Before adding businesses to the target

database, Deluxe intelligently scrubs the data so

that the prospects targeted are the ones most

likely to make a purchase from Deluxe.

Aggregators Supply

300,000 Names Each

Week

Suppression Input

Database Scrubbing

50,000 Names

Added Each

Week Source: Deluxe Corp.

1

2

3

4


#ECSBSummit

A Recipe for Future Success

90% retention in year 2.

Ability to enrich

database and

increasingly target and

personalize in the

future.

Brand transformation –

position Deluxe as

resource for tools to

run and grow business.

Deluxe’s Key Outcomes

Retention

Database Marketing

Up-sell

Source: Deluxe Corp.

3

2

1


#ECSBSummit

When to Sell More to Owners


1. Significant year-over-year growth

2. Winning a significant new account or customer

3. Turning a profit for the first time

4. Building a website

5. Registering a business

Top 5 Triggers for the First Upgrade

Of businesses make an upgrade or add-on

purchase in their first two years. 50%


#ECSBSummit

Reach Out to New Buyers Directly

Source: BizBuySell.

• Build familiarity in an environment

without distractions

• Maximize effectiveness through direct

message control

• Provide strong call-to-action at the

right time in new owners’ decision-

cycles

• Co-brand marketing

• Prominent placements in key flows

• Opt-in/opt-out lead form integration

Direct Marketing

Partner Integration Opportunities


#ECSBSummit

Key Takeaways

• Half of purchases happen while

the owner is formulating the idea

for their business or registering

their business.

• Establishing a business location

and making the first sale are the

next best triggers for prompting

first purchases.

• Ownership transitions represent

lucrative opportunities for up-sell

before and after the sale, and

stealing at the time of sale.

• Be where owners go for startup

information: social networks,

newspaper and magazine

websites, and incubators.

• Use list providers such as

MarketForce to do the leg work

of providing early contact

information for new businesses.

• Engage with potential business

buyers and owners selling their

businesses where they

aggregate (e.g., BizBuySell).


Ready Owners

Source: ECSB Research.


#ECSBSummit

ECSB Summit 2012: Follow-up Webinars

Leveraging Business Owner Decision-

Making Styles for Effective Segmentation

As a follow up to their presentation at the 2012

Summit, OnResearch will be providing a “deep dive” of

the data and will present insights regarding the four

product/service categories: marketing services,

business telecommunications plans, accounting

software and business insurance.

Thursday, June 14th, 12:00 PM EDT

Effectively Marketing to Small Businesses

in Transition

BizBuySell will share insights from a recent survey of

over 1200 small business owners, who detail their

spend and purchase habits across different milestones

in their business lifecycle. Learn about some

strategies & tactics of how to best reach these owners

in transition via BizBuySell.

Wednesday, June 20th, 2:00 PM EDT

Stop by the kiosks or visit the Summit mobile site to register!

key trigger events that every small business marketer must ...€¦ · • the largest business for...

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