How Amex Canada targets small business

I found an odd story at NationalPost.com on Amex Canada's plans for marketing to small business. I don't know why this story was commissioned or who would be interested in it – other than competing organizations interested in understanding how to sell to the same market.

Since that pretty much defines the readers of this blog, let’s find out what we can learn from this story.

Q: Why is Amex’s executive in charge of small business globally based in Canada?

A: Vice-president of international small business services Rob McClean says: Canada was selected as a testing ground for our small business growth strategy, really leveraging our investments in Canada to chart our blueprint for growth across the globe. There’s a strong entrepreneurial appetite that exists in Canada that makes it a real springboard to lead.

Q: What opportunities does Amex see in this market?

A: There’s plenty of evidence that suggests to us there is a real growth opportunity here and there’s a significant need for a company like American Express to tailor products to meet those growing needs. And when you look at the entrepreneurial spirit that exists in Canada, they’re focused on innovation and growth and are willing to take risks, and also very optimistic.

Q: What sets Canadian entrepreneurs apart?

A: In Canada, entrepreneurs are looking for advice, that additional component of servicing, and also the most attractive rewards they can find. For example they’ll leverage gift cards as incentives for employees, one way their spending translates to rewards which transforms into incentives they can reinvest in their business.

Q: What has Amex learned about Canadian entrepreneurs?

A: Small business owners are looking for personalized service, personalized account management, professionals that understand their unique needs, improved working capital and cash flow for their business, and we’ve developed products that allow them to do that.

Q: In the U.S., Amex has a very strong online business network, Amrican Express OPEN Forum. The Post didn't ask about plans to expand that in Canada, but they did ask about Amex Canada’s “networking initiative.”

A: We are constantly evolving and looking at various partnerships and rewards. At this point, I can’t give you specifics on what we have coming down the hopper. But we are starting to leverage social media as a tool. We’ve got a Facebook site we’re focused on growing, we link small business owners from time to time through special events or speaking engagements. And they’ll ask us for information too, for instance, how to leverage social media, what are the best practices for expense management, maximizing rewards and reinvesting rewards in the business. We’re looking to create those forums and platforms to disseminate information.

Q: Any industry-specific niche markets Amex is focusing on?

A: There’s a significant number of dentists in Canada who have specific needs for their practices, such as purchasing products and equipment from labs, and we have forged relationships with a number of dental suppliers and associations.

Want more? You can read the full story here.

Don't Disrespect Your Small-Biz Clients

When you're selling to small business, don't think of your customers as children.
You may have a big company, and theirs may be small. But don't talk down to business owners, and don't think for a minute that they are second-rate or stupid. Business owners are proud of their businesses, and they hate being talked down to.

No one means to insult their customers, but it happens all the time in small business. Take, for instance, a recent marketing venture involving Google, RBC, Rogers and The Globe and Mail.

“Get Your Business Online” (www.gybo.ca) offers Canadian business owners a free dot.ca web registration – and a free low-end hosting account. The laudable objective was to get more Canadian businesses online – but I found the solution clunky and even disrespectful.

Sure, participants could save the cost of registering a dot-ca domain name (e.g., sellingtosmallbusiness.ca), but that’s only a $13 item – and the free offer only covers the first year. Participants also got a barebones hosting account, enough to build a basic, no-frills web site – but again, the free offer only lasts a year. In ensuing years the hosting site (yola.com) collects another $13 or so per annum – although of course it really hopes to sell these clients up to more costly, but more fully featured, hosting plans.

The big problem, to my mind, was the sponsors’ assumption that a $13 fee was holding back entrepreneurs from setting up their own website. More likely, it’s a failure of vision, or ignorance of the web or how to sell on it, that prevent more companies from branding themselves and selling online. Setting up a cheap-looking website does nothing to solve these problems or  help these businesses grow.

Worse, the program allowed YOLA to advertise on the participants’ sites. Site pages also contained the phrase, “Designed by free CSS templates,” which pretty much exposes the website owners as freebie-seekers.

In other words, the program sponsors weren't respecting the participants’ businesses. They seem to have never thought about entrepreneurs' needs for credibility.

The system was finally revised to eliminate the telltale line, “Designed by free CSS templates,” but only after I complained about the program to an executive of one of its sponsor groups. I had previously denounced the oversight in my Financial Post column, but none of the sponsors seem to have noticed that. (You can read my original article on “Get Your Business Online” here.)

This is a prime example of how companies with the best of intentions can mess up when they sell to small business. Recognize the market’s need for respect and for well-considered, sophisticated solutions. Hard-working business owners deserve nothing less.

Double your SME marketing effectiveness

SMEs need so much help: with growth, strategic guidance, accounting support, management efficiency, procurement, IT, marketing communications, and employee management and motivation. Yet most entrepreneurs can only afford so much help at a time.

That suggests an easy strategy: If you provide one of the above services, you could partner with a company selling some of that other expertise. Together, you share leads, you can serve each SME more efficiently, and you'll likely get a bigger share of their dollar than you would otherwise get. The fact that you can connect them with a trusted, effective provider will also be appreciated; you've saved them research and decision time, thus helping them move ahead further and faster – which will help cement your status as a trusted provider of value-add.

This happens all the time, of course, when a local accountant recommends a business lawyer, and vice-versa; it's win-win. It happens less often at the national brand level, but that’s more a failure of marketing moxie than anything else: Scotiabank has a successful alliance with the CFIB, for instance, and RBC and Google teamed up last year to encourage more small business to go online.

Business owners are cautious buyers for many reasons: resources are usually tight, they are picky about finding the right solution, and the cost of failure (in time and opportunity lost, as well as cash itself) can be crippling.

Double your credibility with business owners by teaming up with other reputable sales organizations and service providers to create client savings and synergies. Make sure you share similar values with your partners, and offer comparable value propositions. (Lexus, for instance, might not care to hook up with an “everyman” service like Google to offer free web hosting – but why not explore opportunities with an upscale business hotel chain?)

If you make life easier for business owners, by helping them source the deals they are looking for, and saving them the trouble of tracking down other best-in-class providers – they’ll respect you as caring partners. And they’ll stick with you through thick and thin.

The Flesh and Blood Cash Machine

One of the key differentiators and characteristics of the SME market is that when business owners are considering the purchasing of equipment, investing in an ad campaign, or making a donation to a local charity, they are spending their own money. They don’t have access to a corporate account that represents virtually limitless funds from anonymous investors, as executives tend to have in large corporations. They are acutely aware that every dollar they spend comes from their own pocket.

The other day an entrepreneur told me about a phone call he’d recently received from a local homeless charity. When he found out how much they were asking him to contribute, on behalf of his company, he had this to say:

“The amount you’re asking would pay for my family to go on a week-long ski vacation to Whistler. And I could bring my parents, too. So tell me again why I should contribute to this cause rather than give my family an experience they would never forget?”

In the end, the entrepreneurs anted up most, although not all, of the donation the charity had requested. He probably always intended to give. But he wanted to make damn sure that the canvasser knew that when he asked that company for a donation, it was coming out of somebody’s pocket—not a special budget intended for charitable contributions, not out of some vast anonymous slush fund. It was important to him that the canvasser understand the choices that business owners have to make when they are called upon to invest large sums in non-strategic activities.

In my experience, most business owners are grateful for the support of their community; they are glad and even proud to be able to give back when their level of success allows it. But many business owners are running highly leveraged companies, and they don’t have a lot of cash to throw around.

So here’s the bottom line for charitable canvassers and vendors’ sales managers alike: Respect the pocketbook of the entrepreneur. Remember where that money’s coming from. And make sure you make a good case for the deal that you’re proposing. Because the funds aren't coming out of a budget. They're coming out of MY pocket.

And that makes all the difference.