The Most Common SME Challenges and Smart Solutions to Fix Them 

“Small and medium-sized companies do not know what they have to offer and we all must change this. They must react just as strenuously like larger companies.”- Lawrence Eagleburger, Former Secretary of State 

Digital channels and online resources have changed the entire picture of marketing strategies- for both big establishments as well as for SMEs. Since buyers today have access to varied resources and channels for consumption, it is harder than ever to reach out to them and turn them into buyers.  

This is the reason behind the challenges faced by SMEs– from connecting with the audience, generating enough leads, and closing deals. 42% of SME salespeople say prospecting is the hardest part of their job. The rest say it’s closing (36%) or qualifying (22%). 

In this article, we have the most common issues faced by the salespeople of SMEs and the effective ways to solve them. 


 Strained customer relationship 
 Competition from big brands 
Unorganized database 
Lack of comprehensive database 
Understand the USP 
Targeting and retaining customers 

SME challenges: strained customer relations 


Many small companies lose their customermainly because of weak customer retention and even weaker requisition processes. Also, due to the lack of automated tools, many SMEs rely on human efforts for processing. Such unorganized and unsystematic process management leads to inaccuracies and delays in customer relations, thus leading to a high attrition rate. 


In 2020, 86% of buyers will pay more for a better customer experience. This shows that customer experience has overtaken price and product as the key brand differentiator. 

SME challenges

Source- Google 

Image displaying the importance of relationship marketing 


Automation tools help a lot in relationship marketing by managing and minimizing such obstacles. Many automation software and APIs help marketers access real-time databases and integrate it into CRM or any other cloud-based tools for easy access and usage. Using automation tools to update customer database also helps marketers execute ABM campaigns, email campaigns, and other promotional activities. 


Competition from bigger brands  


Small scale enterprises have always borne the burden of being side-lined by the bigger players. This has intensified more so after the COVID 19. The pandemic has limited the resource consumption for SMEs and put terrible financial restrictions on them. This has impacted their conversion rate by reducing sales.  


According to Statista, 38% of SMEs in the USA ran out of funds between March 2020 and August 2020, and 4% have shut their business down permanently.  

how marketers use database for business growth

Source- Google 

Image displaying how marketers use database for business growth 


SMEs can leverage targeted email lists and customer contact databases for this purpose. To stay put, it is essential to locate your exact audience. When brands focus on a set of buyers instead of going haywire with their campaigns, it increases customer acquisition and reduces the loss of marketing funds. Building a strong customer relationship with a small audience is also great for promoting branding, building customer loyalty, and retaining customers. 


Disorganized database 


Many small-scale enterprises have limited customers. Hence, they usually do not feel the necessity to organize, maintain and update their customer databaseBut in reality, organized data boost the acquisition rate by 147% and reduce retention cost by 95%. The sales and marketing team of small enterprises need an organized database as much as a big organization, as they require more market insights. Also, an organized database and report analysis system is vital to plan, strategize and execute business policies. 


Segmented email campaigns see 14.31% higher open rates as compared to non-segmented email campaigns on a global basis. 


advantages of Email Campaigns

Source- Google 

Image displays the advantages of Email Campaigns 


Segmented database or contact lists are a great source of revenue generation. Many B2B database solutions providers primarily segment data into four broad categories- firmographics, demography, geography, and buyer psychology.  When brands design promotional content based on such segments, it attracts the customer hence scaling the sales rate.  

Bonus tip –  How a segmented prospect email list can help marketers do their jobs efficiently? 

Lack of a comprehensive database 


In a study done by McKinsey USA, it was reported that 47% of SMEs in the USA in 2018 did not have their own customer database, and more than 40% of them were targeting the same audience as their competitors. While this may not be an entirely incorrect marketing procedure, it might not yield the desired results. When a brand or a marketer does not have a database of his exact audience, he is wasting his marketing funds by targeting consumers who  

  1. a) might already be loyal to his competitor(s)
  2. b) might not be looking forward to that particular service/product or
  3. c) might go for an established brand.  

This is why SMEs must focus on building a comprehensive database set before executing any marketing campaigns. 


Successful database monitoring is a fundamental contributor to overall business growth. It is expected that investments in data-driven solutions will increase by 62% after the COVID 19 pandemic.  

process of database marketing

Source- Google 

Image displaying the process of database marketing 


As the consumer economy is getting more niche every day, it is important for SMEs to execute datadriven marketing solutions. You can leverage market reports and customer analysis surveys for this purposeSo, novice brands must rely on credible database providers to locate, target, and connect leads effectively. Also, it is an overall cost and time effective method to boost sales and ROI. 

Bonus tip – Stay connected with customers through a multi-channel marketing strategy 

Understanding their USP 


The markets are becoming increasingly crowded and competitive; so, SMEs find it hard to display their individuality and gain exposure. Many enterprises fail to identify or devise their own USPs in order to stand out in the crowd. A survey done by Statistica in September 2020 reported that more than 40% of SMEs temporarily shut down their operation after COVID 19 in February 2020. 


Social media engagement is vital for the brand establishment, brand positioning, and customer loyalty. It increases CTR rates by 86% and brings 37% more traffic to the website. 

reach of Instagram marketing

Source- Google 

Image displaying the reach of Instagram marketing 


It is important for businesses to be very specific about their services because this helps them stand out. In order to do it, managers must move faster and act smarter. Analyze the market and audience to deliver need-based solutions. 

Bonus tip – Social Media Marketing Ideas For Fashion Brands to Boost Brand Sales 

Targeting and retaining customers 


It is very hard for SMEs to convince a new customer to close a deal. Research shows that 78% of them leave before purchase due to unsatisfactory customer service. Also, according to Marketing Metrics, the chances of persuading an existing customer to purchase is 60-70 percent, whereas it is only 5-20% with a new one.  


A 5% increase in customer retention tactics like social media marketing, email campaigns, cold calling and SMSs will increase the company’s profitability by 75%. 

Image displaying importance of CRM

Source- Google 

Image displaying the importance of CRM 


SMEs must begin their marketing journey by identifying their target audienceMarketing channels such as email, chat sessions, etc. are best to connect with them and address their pain points. Amplify the customer service to offer knowledge and expert services that are within your niche. 

Bonus tip – 5 strategies to help you retain customers 

Advantages of intent-based database marketing on SMEs 

Database marketing platforms like DataCaptiveReachStream offers comprehensive 360-degree marketing and sales solutionsThese data-driven marketing tactics are necessary to keep up with the modern marketing trend, estimate budget and distribution are other crucial business aspects. 


Complete data security 
Affordable and cost-effective  
No extra software required  
Automates complete sales process 
360-degree sales solutions  
Increase organic traffic 
Boost sales and ROI 
Help in customer retention and acquisition 
Facilitate Email and ABM Campaigns 

Let us know in the comments what problems do you face as an SME, and what actions you have undertaken to combat them. 

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