Follow-Up Thoughts on the SMB Marketing/Operations Universe

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David: Happy Valentine’s Day, Mike. Hope you got some good R&R in with your actual valentine on the California Coast after Street Fight Summit West a couple weeks ago.

Mike: I always love the coast of California. We had a great time after Street Fight whale and seal watching. And it was beautiful weather.

David: I thought it was a really well-run conference, aside from a minor A/V glitch outside Street Fight’s control, with the best food I’ve ever had at a conference and some interesting panels we don’t typically get at these kinds of shows.

In particular I found Peter Hutto’s panel with the M&A and business development leaders compelling, and I wondered if we could focus this week on Lorren Elkins’ view of the small business technology space, which he presented as the SMB Universe.

Mike: He certainly provides a model that makes some sense of a very fragmented space(s). It does help in understanding both the relative importance of these major SMB activities as well as the players.

David: Well, I’d modify your statement slightly to say it helps in understanding how the market has weighted these activities historically, not necessarily the relative importance of each activity in the current environment.

I obviously have my own more serial view of how small businesses ought to adopt these technologies, but I’m with you in your appreciation for the way Lorren has framed both the relative size of most of the major players as well as the price points.

Mike: So how do we make sense of these universes as an agency trying to help the small business succeed in digital?

David: Great question. Lorren noted in his in-person presentation in L.A. that one of his biggest challenges was determining the appropriate amount of complexity to represent in his graphics (which he rightly noted as an “ecosystem”).

His example of the email marketing ecosystem alone illustrates this representational challenge well. The graphic would be a complete mess if he were to replicate that for each “galaxy” at that same level of detail.

At the same time, this complexity is where you and I see the major opportunity for agencies over the next several years. Identifying which ecosystem components are most appropriate for a business at a particular stage of its lifecycle, and tying them together, is likely to be an agency’s highest-margin and most-defensible service, as automation and machine learning make the execution of specific marketing tasks much cheaper and better.

Mike: The questions are many for agencies. It’s been too easy for too long to sell “SEO” and not explore a fuller, more comprehensive stack for their clients. But the job of picking products, integrating them and creating enough margin is obviously going to be a daunting task that is necessary as the agencies move forward.

Where to start?

David: To be fair to those agencies, SEO by itself was an incredibly high-performing channel and with a good website UX, is still delivering incredible returns with few other efforts. As I’ve said many times, though, I see the number of winners in SEO shrinking over time, even as those wins become bigger.  So it’s higher-risk, higher-reward.  

But as an agency I wouldn’t want my business to depend on such a high-risk deliverable.

Mike: High risk to both the agency and the business. As Google (and everyone else) takes their share of the local pie it becomes incumbent that the agency help the SMB “own” their own customers. That might be a place to start.

David: Which is what I’m trying to get at with my Stack graphic. There are at least a handful of more fundamental martech elements that businesses too often ignore and agencies too often skip right past on the way to selling their sweet-spot. But Google (and Facebook in the social media world) are making that sweet-spot considerably more bitter.

Back to your earlier question, one of the limitations of Lorren’s graphic is that we don’t get a sense of which large-scale DIWM or DIFM providers in the “asteroid belt” are offering which product galaxies. Identifying what the larger players’ specific offerings look like might help software companies better target partnerships and would definitely help agencies identify successful price points and product combinations in the SMB market.

Mike: Yes it is hard to know in any given market exactly what price point is sustainable with low churn and what are “critical” features to meet that need. I am working with a small hosting agency that is attempting to do just that in a rural market and there is some sense that $300-400 month is a bit of stretch for many of their clients. It would be helpful to have more nuance in the chart.

What would you suggest? It would seem that they need a few products to integrate and package that they could scale across a lot of their clients with a goal of hitting that range with fundamental value for the businesses.  

David: Right, the features are not one-size-fits-all. The health insurance broker probably does not need online scheduling or a loyalty program, but definitely should have a CRM and a weekly email newsletter.  But the taco stand should probably have both online ordering AND a loyalty program, whereas a CRM and regular content marketing probably aren’t as important.

Regardless of the right package, the key for both agencies and small businesses is to choose best-of-breed components in each galaxy that integrate with each other so that you can add relevant and profitable services over time. Which is why you and I recommend providers like Mailchimp and WordPress because they’re so widely supported and so widely integrated (in addition to being free).  But a business often doesn’t have the wherewithal to evaluate these solutions adequately and it’d be incredibly rare to find one with the time or technical ability to integrate and manage them. This expertise and management is exactly what agencies should be selling.

Mike: I think leveraging Google’s freebies might be an obvious choice as well (Posts, Q & A etc).

So we are back to where we started this conversation last fall. That agencies need to move beyond SEO & SEM and there will be no substitute for many of them to wading through a number of these galaxies finding good market fit with good integration and bundling that up creatively across their client base.

Lorren’s chart is complementary to your chart and could work hand in hand with it.

David: Exactly, I think that’s part of the reason I found Lorren’s latest iteration so compelling — it provided a unique new lens through which we can all view local business marketing and offers new areas to explore in terms of packaging and selling those services.


After more than a decade in local search, David Mihm now runs Tidings, an email newsletter platform for small businesses that leverages their everyday social media activity, and his own weekly newsletter, Minutive. In 2012, he sold his former company to Moz, helping over 3 million businesses get better visibility in Google and other search engines. Along with Mike, he’s a co-founder of Local University. 

Mike Blumenthal is a co-founder of GetFiveStars, a feedback and reputation platform, and LocalU, which provides small business and agency training in sustainable local search marketing. His motto: All Local All the Time.  He writes at his blog and does a twice a week podcast about Local marketing. 


Got an idea for what you want Mike and David to discuss next time? Send it to either [email protected] or [email protected], or just leave a comment below and we’ll put it in the hopper!

After more than a decade in local search, David Mihm now serves as VP of Product Strategy at ThriveHive, leading the direction of the company’s search-related product offerings. He’s also the Founder & CEO of Tidings, an email newsletter platform for small businesses that leverages their everyday social media activity, and his own weekly newsletters, Minutive and the Agency Insider. He’s the former founder of, Director of Local Strategy at Moz, and along with Mike Blumenthal, he’s a co-founder of Local University. Mike Blumenthal is the co-founder and analyst at Near Media where he researches and reports on reputation, reviews and local search. Mike has been involved in local search and local marketing strategy for almost 20 years. He explores the online to offline local ecosystem and helps businesses understand it and benefit from it through writing, speaking and education.