How Do You Sell To an SME?

By Ambarish Gupta|24th Oct 2012
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Last time I spoke about the opportunities in the SME sector and how SAAS can serve the SME. Fundamentally these are huge opportunities but the act of selling to SMEs is not easy. In this article I’ll talk about the business philosophies and ecosystem SMEs work in and how to use those to sell them.

SMEs are extremely cash sensitive. SME is the brave entrepreneur who never had access to the venture capital. Banks have been difficult to get capital from. When they don't have cash, they have to take loan on their house. This means that until you get real cash, sales is not closed. You may get Post Dated Checks. You may get assurance of sales and you may get Purchase Orders. All of those are nothing more than the "intent to buy". Not sale. Do not deliver the goods until you have received the cash - hard cash in bank. If you deliver the software or give out the hardware you can kiss goodbye to the chance of ever getting the cash and sale will never close.

SMEs work in small communities that are tightly knitted. These clusters have members where everyone knows everyone else. You deliver a product that does the job well and you claim a home run. This is a guy who is used to driving on broken roads, queuing up to deposit checks in bank and surviving his business in the fluctuating electric supplies. He is not used to world class services. If you provide world class service, there will be gratitude. He is going to refer to all of his peer group. Welcome to world of high sales productivity.

However on the other hand, if you did not deliver what you promised, be prepared to face the wrath of the SME. The bad news about ‘you’, will spread faster than the good news.

SMEs are emotional about competitive activities. The best sales pitch you can make is tell the SME about their peer using the same software. You will be taken very seriously. Take the time to explain the value prop in the simplest possible language. Do not use the jargon. You are not delivering value of the service to the business - you are doing that to the person because the guy IS the business. He is living the business. These are incredibly smart people. Simple two lines pitch and he will be asking more questions if it catches his interest.

Selling to SME is not easy. You have to meet face to face. The ticket size is small. But the market is big and opportunities even bigger. Those who crack it will be among who build the next billion dollar product companies out of India :).

The author is the founder of Knowlarity, a 200+ member company that has more than 250 monthly SME customers. 

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