Rob Smith Rob Smith Director, Product Marketing - MDS

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The rising importance (and opportunity) of SME customers

  • Beyond the holy grail of landing the big corporate contract, it’s easy to forget about smaller businesses, and just how much of an opportunity they present. 

    By most figures, the business world is populated by as few as 1% of large corporations, and that the remaining 99% are small to medium sized enterprises (SMEs). Significantly for CSPs (who often see themselves as being solely embroiled in a battleground for large corporate contracts), this 99% represents a massively untapped and unexploited market.

    In an ultra-competitive landscape where finances are being increasingly squeezed, this undervalued section of the market becomes even more significant for CSPs in terms of revenue generators.

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    That said, this is not a chance for CSPs to simply apply their corporate model and marketing budget to gain the custom of SMEs. It’s fair to say that SMEs have a right to feel like second-class citizens when it comes to the level of service they’ve received from CSPs historically, who have approached this section of the market with a mix of corporate and consumer models, neither of which have fully addressed the needs of this segment.

    What is genuinely exciting for CSPs (and subsequently, SMEs) is that they have something genuine and robust to offer this section of the market. Advances in analytics, policy and billing technology offer CSPs the opportunity to unlock the value of the SME sector to offer bespoke and scalable solutions that not only meet their requirements but also offer choice and assurance.

     

    With a vast range of potential tariffs and packages to choose from, SMEs can find it difficult to identify the one that works best for their usage patterns, subsequently spending years tied to contracts that don’t fit their needs. This of course doesn’t benefit the SME in any fashion, and ultimately, this set up isn’t good for retention and loyalty to CSPs either.

    With a new range of price plans, CSPs need to provide SMEs with a choice of service level agreements (SLAs) and assurance, avoiding the crude ‘one size fits all approach’ that has traditionally plagued this sector. To do so, CSPs need to be flexible and agile and ensure that their back-end systems are able to adapt to the differing needs and usage patterns.

    The advent of Bring Your Own Device (BYOD) also gives CSPs the opportunity to add value to the service provided to SMEs. In doing so, they can seek to leverage value-added services to increase the average revenue per user (ARPU), which is typically higher in SME customers than corporate customers anyway.

    It is equally important that CSPs implement sophisticated analytics to harness information and data from every touch point they have with SME customers. This offers a more proactive approach to understanding their customers, allowing them to structure SME packages according to their needs, providing additional value.

    By delivering these services to the SME market, CSPs can add an additional revenue generator to fuel sustained business growth. In addition, by providing a deeper and closer customer relationship, CSPs could benefit from improved retention figures that would have an equally  lucrative effect on the bottom line.

    Rob Smith
    About Rob Smith Rob Smith works as Director, Product Marketing at MDS
    More information : http://www.mdscem.com

Comments

5 comments
  • Rob Smith
    Rob Smith Thanks for your thoughts Tony, and agreed. It’s undoubtedly a lucrative opportunity for CSPs, one that we’d expect to see addressed as cloud becomes ever-more embedded in the enterprise.
    24 August 2012
  • Krishna Gopal
    Krishna Gopal SME behaviour is closer to the Consumer behaviour in the B2C context. And in B2C its the GYM (Google -Yahoo- Microsoft) or the FYT (FB-YouTube-Twitter) that know how to navigate and get the $$ better than the traditional CSPs. Its a fundamental behaviour ...  more
    5 September 2012
  • Robert Machin
    Robert Machin Totally agree that the SME sector is the key market for Cloud services, and a huge potential opportunity for telcos. Corporates will always be slow and wary about moving established functions to the cloud, but if you were a startup or a small but growing ...  more
    5 September 2012
  • Cato Rasmussen
    Cato Rasmussen Hmmmm?
    BSS/OSS in a Cloud context is outsourcing wrapped in http(s)://www.xxx.com. So what new does it bring? Very few CSP BSS solutions lifted up in the Cloud have added functionality or better offerings. Time to market is still crap, whether modified...  more
    5 September 2012