Despite their lucrative potential, most small businesses continue to eschew marketing overtures from big companies

By: Elaine Grant

Larry Marion, owner of Triangle Publishing Services, a Massachusetts custom publishing house, has built a career ensuring that his small company meets the needs of the numerous big brands it serves.

But ironically, many big companies don’t know how to begin to reach out to small businesses like his. Their worst mistake? Breaking into his day with phone calls. “I just hung up on (a telemarketer) today,” carps Marion, his disdain indicative of the ongoing problems big businesses face when trying to market to their smaller counterparts.

In the U.S., there are approximately 20 million sole proprietorships and partnerships and 5.2 million “micro” businesses, defined as companies with four employees or fewer. Small businesses spent $5.09 trillion on goods and services making them a veritable gold mine for big companies, according to figures gathered by the Small Business Administration’s Office of Advocacy in 2001, the last time the agency tracked small business expenditures.

But as for all the lucrative opportunities small businesses present, many major marketers can’t even identify these shops, let alone make overtures to them. Even when marketers do discover communications inroads to small businesses, the owners are often either too busy or too cynical or both to respond.

In fact, so many obstacles keep small business owners from changing suppliers or adopting new ones that Zach Vetter, vice president at Toronto-based marketing advisory services firm Warrillow & Co., refers to the phenomenon as small business “inertia.” The chief reason is obvious: Small businesspeople are usually so busy hustling to thrive that they don’t think they have time to adopt even some simple marketing measures. In a recent survey, for example, Warrillow found that although 64 percent of small business owners are aware that they can buy keywords, only 9 percent do so. Similarly, of the 92 percent who know about remote access to their business e-mail, only 43 percent do so.

Yet as maddening as the inertia can be, marketers can’t stop looking for ways into the small business market. As every marketer knows, the smaller a company, the more expensive it is to reach them. The market is highly fragmented; small companies typically identify themselves by their industry, not their size, and they are slow to make changes. Furthermore, over the last 18 months, Vetter says, competition has increased for the lower end of the small business market, with more marketers targeting micro businesses. That’s smart, he says: “It’s very important to get in as early as possible [in a company's lifecycle] and begin to develop a trust-based relationship.”

But therein lies a huge challenge. Small companies’ resistance to big business sales pitches hasn’t changed much in two decades, says John Cicco, who until last year ran Cicco & Associates, a market research firm in Murrysville, Penn. For two decades, Cicco’s quarterly survey of small business owners showed that they consistently had what he calls “Goliath phobia” the fear that large companies would fail to respond effectively to their problems. “Small businesses have a very thin buffer between them and the road, so anything that happens hits them immediately, and they need an immediate response,” says Cicco. “So concern about not getting the attention you need is very strong, and this did not weaken in the 20 years we did surveys.”