Between the lines, Vodafone study asks how to sell to SMEs just trying to “stay afloat”
Whatever Vodafone’s intention when polling 1,000 small and medium-sized enterprises (SMEs) in the UK, and whatever its conclusion from their responses, one thing is also clear: business is hard in this economic climate. What also seems apparent, reading between the lines of Vodafone’s enterprise review, is that the SME-sized user market in the UK, and everywhere, is going to be a tough nut to crack for technology sellers like Vodafone.
In the specific case of private LTE/5G, and related enterprise IoT/AI gadgetry, the SME market will not easily yield the kind of quick returns that will make the likes of Vodafone serious players in the market. Why so? Because a quarter of British SMEs – which make up as astonishing 99.9 percent of the UK business population (5.6 million businesses), according to government statistics – have told Vodafone that “staying afloat [is] their main priority in 2022”.
Actually, they told consumer insights firm GWI, commissioned by Vodafone to run the survey. But it is the same question Enterprise IoT Insights has asked the tech-supplier market time and again: how do you persuade an enterprise to invest in new digital tech when it is struggling just to keep the lights on? In the end, many might gamble only as a last roll of the dice, the Vodafone report almost suggests. Unless Big Business steps in, it certainly says.
The study, available here, appears designed to promote some kind of future Vodafone support service for UK SMEs. What form this support will take is unclear, but Vodafone talks about better “understanding who makes up the SME community” in order to provide the “tools, resources, and solutions they’ll need to thrive and prosper on their digital transformation journeys”. As it stands, 28 percent have accessed financial support from the government to help through Covid-19.
Twelve percent have turned to family and friends, and (just, Vodafone implies) five percent have turned to big companies – like Vodafone. One problem, it implies, is they don’t get tech, or some don’t anyway; 12 percent of companies with 50-250 staff cite it as a hurdle, falling way down to three percent among small organisations. And these hurdles are mostly linked with Microsoft Teams and everyday phones and laptops.
The idea of cellular networking and algorithmic analytics seems like a tall order. The study says 30 percent of SMEs are risk-taking “innovators” when it comes to tech, which sounds positive; but another 18 percent describe themselves as “laggards”, and 26 percent classify themselves as part of a “late majority”. Which means, “a sizeable 44 percent… are missing out on critical benefits to propel their business to the next level”, says the tech vendor.
But ‘SME’ is too-broad a term, in the context, to make conclusions about Vodafone’s chances to sell Industry 4.0 into the engine room of the UK economy. So who are these SMEs? Vodafone quotes UK government figures, generally, that say there were 913,000 construction SMEs in the UK in 2021, with around 300,000 focused on the construction of buildings. This is the biggest ‘vertical’ segment, and one that would, in certain sub-segments, take a private 4G/5G network from Vodafone, or someone else.
Besides, the top five UK SME sectors are: ‘professional, scientific and technical activities’ (848,000), which include architects, accountants, and law practitioners ; ‘wholesale and retail trade’ (556,000), which apparently covers farmers, as well as fashion buyers; ‘administrative and support services’ (465,000), which is more easily defined; ‘information and communication’ firms (352,000) in fields such as IT and marketing.
Not all, then, but some will want private 5G, industrial IoT, advanced AI, in some kind of combination. But Vodafone UK appears, also, to have rejected standard vertical segmentation (and specialist industrial know-how) in its pursuit of new enterprise sales. Instead, it has workshopped the struggling SME classes back into eight marketing ‘tribes’, called things like ‘passion seekers’, ‘lead players’, ‘sole-not-SME’, ‘necessity entrepreneurs’, and ‘reassessors’.
There are eight in total, and they will presumably inform its new consultancy approach to help SMEs buy its tech. And actually, it turns out, towards the bottom of a press statement, that Vodafone has these services up and running; via something called V-Hub, offering “free expert guidance, knowledge, and… tools, training, [and] free… advice with an advisor”, and Business.connected, which offers skills training in partnership with Cisco and Samsung.
A press statement offers supportive quotes from non-Industry 4.0 sounding companies like Yogi Bare and Buttercrumble. (Oh, shoot me now.) Of course, Enterprise IoT Insights should consider the bigger picture, and the wider enterprise market for which these services are available. But the guff around SME personas seems, to us, to go against the commonly cited challenge for operators to get their hands dirty under the hood of industry.
It contradicts the Industry 4.0 lesson that solution providers should gen-up on specialist industrial know-how in order to make technical solutions that correspond to business problems. But anyway; Andrew Stevens, Head of Small and Medium Business, Vodafone UK explains: “We have to do a better job of defining and understanding SMEs… [to provide] better, clearer, more accessible advice, and guidance.”
Vodafone states: “A ‘guidance gap’ is emerging with 59 percent of SMEs having sought no support or funding from any third party… Whilst many large organisations continue to treat SMEs as a homogeneous group neatly tagged together by size and similarity, the report shows the opposite is true, with SMEs instead being as vibrant, diverse, and complex as the challenges they face. As a result, the report identifies eight distinct SME personality types.”