Small Businesses Have $60 Billion to Spend, but Telcos Have No Respect

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BOONTON, NJ. March 4, 1997:

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Small businesses just can't get no respect from the giant telephone companies, but with their phone bills growing at more than 11% per year, small businesses represent an enormous opportunity, says a new report from Insight Research. Glossy brochureware and discount pricing offers bombard the small business owner, but such primitive marketing tactics typically won't convince these savvy entrepreneurs. With competition in local and long distance markets forcing carriers to re-examine their entire marketing operations, now is the perfect time to address the unmet market needs of nearly 21 million small businesses.

According to the 1,000 interviews conducted for Insight's Residential and Small Business Telecom study, the small business customer is grossly underserved by the telcos, with little to no services created to solve their unique problems. This lack of service is due in part to old assumptions about small business. Small businesses are not cost sensitive, but revenue sensitive, says the report. Small businesses are not slow to adopt, nor slow to be sold, nor technologically naive. Today's small businesses are heavy users of advanced telecom tools and they're willing to pay for improved service features if they perceive a significant business value.

"Small businesses are the fastest growing part of our economy, and they have real money to spend--over $60 billion for telecom products and services in 1997 alone," explains Robert Rosenberg, president of Insight Research. "But the carriers tend to lump small businesses in with residential consumers or categorize them as 'mini' big businesses. They're neither. And they won't respond to services created for someone else."

For this market research report, Insight collected 15,000 pieces of data about small businesses and their employees, geographic areas of operation, equipment complements, communications traffic volume, information movement, and opinions on services, prices, and possible applications. While Insight found that small businesses are more willing to try new solutions than large organizations, they are equally quick to discard solutions which do not meet their requirements.

Significant business opportunities and recommendations on how to market to the small business customer are published in Residential and Small Business Telecom.

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Donna Savino

at Insight Research

973-541-9600