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What is the hardest stage of growth for SMBs? After examining census and business data for the past decade, BIA/Kelsey has identified the “troubled teens” transition from blossoming small companies (one to nine employees) to medium-sized firms (20 to 49 employees) as the critical stage where tool complexity and pricing, as well as local business models, are misaligned with the needs of growing companies.

Take a moment now to get the free download of our new Sponsored White Paper, Optimizing Local Marketing: SMB Marketing Needs “Do-It-With-Me” Models.” Produced courtesy of Vendasta, which asked BIA/Kelsey to explore the opportunities for aggregated marketing services in local SMB markets, the paper examines the pressing need for consultative marketing services that blend easy-to-use digital presence management tools with hands-on marketing expertise for companies that are too large to continue to market on an ad hoc basis and too small to hire and retain full-time marketers while paying for expensive enterprise tools that are often overkill, and over-priced, relative to the SMB’s needs.”

Specifically, it’s the “troubled teens,” when a company is between 10 and 19 employees, that represent the greatest opportunity for local marketing services players to step into a startling gap in success. Even as smaller and larger firms continue to grow, albeit with very high failure rates among the smallest businesses, it is the teen companies that fail at a rate more than an order of magnitude greater than other businesses of any size.

The U.S. Census has been tracking business birth and death rates on a five-year cycle. During the last cycle, between 2010 and 2011, SMBs of between 10 and 19 employees failed 14 times more often than the next largest group (20 t0 49 employees) and accounted for the only net loss of jobs among all businesses of any size in the United States.

Vendasta talked about its DIWM approach at BIA/Kelsey Interactive Local Media Conference in December and also dug into the idea with Michael Boland during a video interview last fall. We’ve been increasingly struck by the emerging complexity of small business, which we believe is evolving into a “Local On-Demand Economy” (LODE). This takes the aggregation of demand further than Uber, blending new forms of local services with novel employment or contractor arrangements with service providers.

Tools to participate in the LODE economy will need to bridge the gap between limited human, technical and financial resources within growing SMBs and the requirements for digital presence management at a price that supports increasing growth. Too often, teen firms take on high upfront costs to integrate enterprise tools into their workflows, failing to get results because ongoing coaching is needed to build a robust marketing experience. The DIWM model provides expertise and explanations along with technology, helping business to grow organically, building their presence instead of exhausting their budgets upfront and leaving entrepreneurs on their own to use enterprise software designed for teams of marketers when the SMB has only begun to embrace marketing as a practice.

This misalignment in tool complexity, price and service model is a market opportunity for companies such as Vendasta, which provides a digital presence dashboard through resellers, including the Miami Herald, that deliver marketing advice along with the Vedasta’s 10X platform.

Yet we also see Google, Facebook and LODE exemplar Uber, to be expanding into these markets, across many locally delivered services. There is a race on to crack the local logistical and marketing challenges of on-demand goods and service.


We’ll be discussing DIWM in depth at BIA/Kelsey’s National Conference, March 24-27 in Dallas.

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