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Jan 29, 2001
How To

Terri Lonier's Advice (and Warnings) on Marketing to the Growing SOHO Marketplace

SUMMARY: No summary available.
As President of the Working Solo consultancy, Terri Lonier advises Fortune 500 firms on how to reach the rapidly growing small office/home office (SOHO) market. Her clients have included Microsoft, Intuit, Cisco, HP and Bank of America.

Q: What's the biggest misconception that big businesses have about small ones?

Lonier: What always surprises me is that I'll be at a conference and someone will say, "I just have one quick question: how do you market to SOHOs and small businesses?" So, the biggest misunderstanding is that they think there is one way to market and that there is one market!

This market is not homogeneous in any way. It's composed of a lot of micromarkets.

Q: How do you help clients who have products with a broad appeal market across the micromarkets?

Lonier: We sit down with them and say, "Let's take a look at your strengths and what you bring to the market already." Some clients say, "We feel totally lost, we see X company is having great success. Should we try that?" Our advice is instead of jumping on the bandwagon and adapting somebody else's marketing methods, always look at your strengths first. It may be an installed base, or demand, etc.

You also have to have a very clear idea of what you want to achieve. Sometimes big business marketers just have this amorphous feeling of "We just want to do better in this market." I try to pin them down -- is it units shipped? Brand recognition? Dollars? Profits? There are a lot of ways to target success. You need to be clear about the tangible goal you want to achieve.

Q: Is there anything the micromarkets have in common?

Lonier: There are several characteristics. They crave freedom and independence. They operate with a checkbook mentality. (They don't have someone on the 17th floor to send invoices to. They look at the checkbook and say, is this going to be possible for me?)

We really focus on the SOHOs which we define as 20 employees or less. The center of that circle are one-two people businesses and that's what we call "working solo." They have different motivators than a company of 35. They are what I call a mass market of individuals.

It's a tantalizing opportunity out there. But, you can also go through your marketing dollars so fast it will take your breath away! It's a mixture of consumer and business markets. They are making decisions for business reasons, but in many ways they act like consumers because you must reach them one at a time through consumer methods -- or more effectively through partnerships.

Q: Which are the best partnerships to reach this solo market?

Lonier: Some of the partnerships that have been done with telcos and ISPs seem to be working well because individual customers are self-selecting. You can build relationships with people who are just starting or expanding a business, and that's a time when they're going to be investing.

This market is really loyal if you treat them well from the first encounter.

The one mistake most companies make is saying, "We don't want to deal with a SOHO until they're really big enough for us." If you scorn them in their initial days, if you say, "Come back to us when you have three years of tax returns", they'll remember that. They don't have time to go shopping for new suppliers all the time. They won't switch when they are "big enough" for you unless the value proposition is significantly better. This is a fairly conservative group.

Q: What works when marketing to SOHOs via email?

Lonier: We've seen a great interest in email newsletters. This market is starved for information. They operate from two spheres -- the passion sphere where they are passionate about cabinet making or their salsa recipe, and the business sphere. The business sphere is the one most would rather ignore, or they feel intimidated, or they don't know much about it.

If a corporate provider can help them navigate the business sphere effectively and painlessly (and gosh maybe even have some fun) then that company will have greater success in this market.

You need to act as a partner to the SOHO customer -- to help them succeed. Selling to SOHOs is really not about standing on one side of the counter saying "I have this, buy it." It's really about walking around to the other side of the counter and saying, "This is the product or service we offer. Together we can help your business succeed." It's a subtle distinction but a crucially important one.

NOTE: Every Summer Working Solo holds the Soho Summit, a three day event specifically for business leaders of mainly large companies targeting the SOHO marketplace. While the event is an outstanding educational opportunity, Lonier feels its greatest value may be the potential partnerships with each other attendees walk away with. To learn more go to the link below.
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