What independent workers mean for your SMB marketing strategy.
It’s called the “gig economy.” According to McKinsey, 20-30% of the US working-age population is comprised on independent workers, and this figure is expected to rise to 40% by 2020. SMBs are both major drivers and beneficiaries of this trend, which has important implications for anyone marketing to small or mid-sized businesses.
In this series called SMB-Minded, my goal will always be to take you inside the mindset of SMB owners and buyers, so you can better tailor your marketing to this unique and diverse audience. To this end, here are some insights on the role of independent or contract employees – often called freelancers – as applied to SMBs.
Why SMBs use freelancers
- With all the layoffs over the past 10 years, SMBs can now access more experienced talent than ever.
- Platforms such as Upwork, LinkedIn, 99designs have made it much easier for freelancers and companies to connect and engage.
- Contract workers allow SMBs to access talent on an as needed, non-committal or fractional basis.
- Contractors are less subject to employee-based regulations and requirements. (I predict that state governments will start giving freelancers some similar “protections” as employees).
- Companies are becoming more comfortable with remote employees with technology making it easier.
What does this shift toward independent workers look like in real life? I own a small business myself, and I talk with small-business owners every day. Here are some things close associates of mine are doing.
- A new technology consultancy is starting out entirely with freelancers, allowing the owner to quickly scale without fixed payroll costs. He does anticipate hiring some full-time employees as the projects become more consistent but for now he can match his company’s capacity to demand. That said, he envisions that freelancers will always have a role at his firm, especially when subject matter experts are needed.
- A marketing company employs two dozen off-shore virtual assistants to do web-based research and manage a robust marketing automation platform. This has enabled the company to grow substantially at a fraction of the cost of building a full-time US-based team.
- My own company, RSL Media, leverages an extensive network of subject matter experts and creative talent on an as-needed basis, enabling us to assemble bespoke teams for any project.
What does this mean for marketers?
The main takeaway is that, because they may be using freelancers, there may be more to your SMB prospective customers than is apparent to the eye. Traditional measures used to evaluate and segment target companies may be misleading, and important opportunities may be overlooked. For example:
- Employee count and other raw demographics, often used since revenue numbers are hard to come by for private companies, might not be an accurate indicator of the size and scope of an SMB. As a side note, we have always believed that behavioral metrics like content consumption, purchase intent are often better indicators.
- If you are selling directly to SMBs, contractors might be making or influencing buying decisions. You will rarely find them associated with the company on LinkedIn.
- If you are targeting very small businesses/solopreneurs, note that some of them may be freelancers themselves. Some will identify as business owners and others perhaps as consultants. In the aggregate, this subset of the SMB universe can be an attractive market niche to some marketers all by itself.
SMBs come in all shapes and sizes across almost every industry sector. To effectively reach them, it is helpful to understand how they are changing. Increased use of freelancers is just one way.