We’re already familiar with today’s SMBs: much more sophisticated adopters of advanced technology services and products than most people probably believed. They also make up to 99% of all businesses, making them an attractive market where CSPs can help to drive innovation and capitalize on new B2B revenue opportunities outside of the consumer market. But on the flip side, that 99% figure equates to somewhere north of 400 million unique companies, each and every one with its own very specific circumstances. 

No wonder that CSPs have just dipped a toe into the SMB opportunity. Due to the complexity of serving such a diverse segment, it’s been seen as easier to stick to offering the tried-and-tested, highly repeatable generic telco offerings. But our research shows that increasingly, this isn’t enough.

So how to square the circle of highly individual customer needs and a simple, scalable business model? In this blog, we dive deeper into the conundrum, offering insight into how CSPs can nurture SMBs’ positive relationships with technology, bridging the gap between SMBs’ expectations and what CSPs need to do to achieve a viable business case and growth.

Our SMB playbook covers the six critical factors you need for a lucrative SMB business through a digital marketplace:

1. Simultaneous problem solving

In the SMB world, technology adoption is closely aligned with business resiliency. But just like enterprise, plate-spinning is the name of the game and SMBs’ challenges are numerous and simultaneous. They see technology as the potential solution for a diverse list of priorities including managing digital risk and security (73%), increasing sales (58%), streamlining processes (58%), and driving digital transformation (53%).

These highly focused, tech-savvy, multi-tasking businesspeople, struggling with a disconnected portfolio of ICT services and products, are looking for a CSP that can alleviate their technology headaches and resource issues. In short, they want someone to solve their problems. In this new context, the old CSP model of one-bundle-at-a time just doesn’t cut it for SMB customers. And nor does it provide the model for CSPs to take scalable, repeatable solutions to market across different industry sectors.

2. One platform to support them all

Imagine running a small business: Sheep farmer by day; Financial Director by night; IT manager in your spare time. Now imagine having to deal with multiple technology providers. It’s not surprising that 78% of today’s SMBs would value a single platform that could serve all their technology needs, and 65% would consider placing all their technology requirements with a single supplier. It’s an enormous opportunity for CSPs. But it requires a radically different business model. It’s time to stop thinking like service providers and instead, start acting as orchestrators, connecting buyers with solutions.

In this new reality, CSPs must come together with tech providers and sector experts in a partner ecosystem, to co-create and deliver new solutions for SMB challenges. CSPs like NTT DOCOMO are already achieving this with an end-to-end, go-to-market SMB proposition alongside their partners. Demand for multiple solutions simultaneously means that speed and simple processes for selling, buying and fulfilment across partners, are key factors in the success of this single platform.

3. SMBs prefer digital channels

The traditional SMB dependence on assisted channels such as call centers and sales agents is fast disappearing. According to our findings, 36% of SMBs already prefer purchasing ICT solutions digitally, and in line with digital adoption in every walk of life, this figure is set to rise fast. CSPs are well placed to accelerate the transition, with signposting through existing channels.

The message is loud and clear: SMB digital marketplaces are the way forward. They offer SMBs the advantage of buying all their technology needs from a single provider while enabling CSPs to provide a breadth of offerings efficiently and at scale. So increasingly, the challenge for CSPs will be to offer a marketplace that is valued for the quality and relevance of solutions, as well as providing a seamless customer experience.

4. Nobody has all the solutions (but the partner ecosystem probably has)

In recent years, CSPs have attempted to build their own digital marketplaces, but typically these have been very product-centric, with too much focus on reselling unbundled technologies and services such as Microsoft 365. In reality, these marketplaces are glorified app stores, just selling lots of different component technologies, and still leaving SMBs with the problem of integrating and operating services and products themselves.

Our research revealed that 64% of SMBs want technology providers to work together to build joint solutions to help them achieve their goals. CSPs are in a strong position to leverage their customer relationships, and to lead the collaboration with different technology players - often involving the SMBs themselves as they prototype solutions. This approach promotes shared expertise between ecosystem players to unlock new capabilities and more comprehensively address the diverse business priorities of SMBs. Trialing, co-creating and cross-selling repeatable and scalable solutions is fundamental to the digital marketplace opportunity.

"I supply laptops and PCs to users with some complex manual set ups. This can be especially challenging and time-consuming for users who never visit the office. A solution to manage and automate setup and rollout would help with my workload.” IT manager, Hospitality and leisure, UK

5. Think outcomes first, technology second

For SMBs, the technology is a means to an end. So the key to a successful marketplace is to always answer the question: what is the business problem we are trying to solve? In our research, simplified integration was a priority for just under half of SMBs (49%) – in simple terms, they want more advanced solutions, but less complexity in implementation, and more headspace to focus on their core business activities. None of this means that CSPs are expected to become system integrators. That would only prove costly and inefficient for both parties. Instead, the requirement is for CSPs to work with partners to understand the customer need and design the appropriate solution.

As digital marketplace owners, the responsibility falls to the CSP to make everything simple to buy and use – recognizing the customer experience is a valuable part of the solution. As part of this, CSPs can work with partners in the ecosystem, going beyond the technology integration, and streamlining everything from supply chain and inventory to fulfilment, and customer support.

6. Customer experience for the digital world

In their free time, SMBs are consumers too - shopping around for holidays, insurance, taxis, and food, just like you and me. So expectations are high, and the benchmark is set by world-class consumer apps. CSPs should fully embrace digital opportunities when designing their marketplaces. Above all, it’s vitally important to help SMB customers to identify and select the solutions they need, as quickly and easily as possible. In the typical journey, SMB customers explore first by sector, and then look at solutions based on business problems. For example: Hospitality; Smart Kitchens. At the same time, you should look to develop creative and flexible pricing models that involve more than just a price reduction, and consider different approaches including as-a-service subscriptions, tiered pricing loans, financing, loyalty points and more, to encourage SMBs to place all their technology needs with one supplier.

The ‘new way’ for CSPs: all-encompassing technology platforms

It’s clear that SMBs are demanding solutions specific to their needs, and solution-based digital marketplaces are the silver bullet. However, it is only possible when CSPs fully commit to the concept of the partner ecosystem - enabling them to experiment freely with reduced risk, automate their processes and relationships with customers and partners, support great customer experiences, orchestrate ecosystems, and achieve flexible monetization and settlement models.

It’s decision time for CSPs. Start something now - or risk losing out on revenues as more agile technology businesses and digital natives take ownership of the SMB-customer relationship.

  • Michal Harris
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