Born between the early sixties and 1980, Gen Xers are sandwiched between asset-rich baby boomers and the much-hyped millennials. By comparison, they receive relatively scant press. However, overlooking them creates a missed opportunity for telcos — especially since a typical small business owner often happens to be a member of this generational club.
Research shows that in markets across the world, Gen Xers are the bedrock of the small business community. So what drives them? What do they expect in terms of product and service? How should offerings be tailored and presented to meet those expectations? Here’s how telcos can repurpose their strategy to target this neglected demographic, opening up the opportunity to provide value added services to this audience and subsequently strengthening their appeal.
In popular perception, business owners fall into one of two categories. There’s the traditional CEO: a fully paid-up member of the baby boomer generation, who, if they haven’t yet retired with a generous pension, is looking to do so very shortly. Then there are the millennial entrepreneurs: young, ambitious, and trendy go-getters who capture the imagination of the public and marketers alike. Caught between these two personas, Gen Xers are sometimes dismissed as ‘slackers’; a cohort too young to benefit fully from the post-War boom but somehow unwilling or incapable of grasping the entrepreneurial opportunities of the tech revolution.
That said, research casts serious doubt on this — especially the image of the average small business owner being a 20-something techie. To illustrate, drawing on data from Goldman Sachs, the 2016 Babson College State of Small Business study shows that once solopreneurs and freelancers are taken out of the equation, the median age of US small business owners is around 50. When Sandler surveyed the UK small business landscape, it found that the average age of an entrepreneur is 47.
The small business sector, in other words, is firm Gen X territory. An appreciation of this fact can and must inform the strategies of telcos seeking to optimise their SME offerings.
Gen X business owners: their CV as a marketing opportunity
The Sandler survey showed that around two in five male and almost a quarter of female successful small business owners had previously held MD positions. Of the rest, many had been in mid/senior management roles before deciding to go it alone.
The evidence suggests that not only is the typical small business owner firmly in the Gen X demographic, they’re also likely to be far removed from the green, wide-eyed millennials operating from their bedrooms. Gen Xers frequently have intimate experience of corporate environments and have been involved in decision making at the highest level — including ICT procurement.
This background means that many Gen Xers will be familiar with market-leading tech solutions. Their familiarity with names such as Office 365, Sage, Dropbox for Business, and Norton mean that these are likely to be top of their wish-list when they build their very own business infrastructure.
To capitalise on this, telcos should consider, or reconsider in some cases, the benefits of presenting themselves as complete ICT providers: a one-stop-shop for the best-in-class corporate software that Gen Xers have been getting to know throughout their working lives. These individuals are likely to be less interested in the ‘next big thing’ and more concerned with accessing tried and tested enterprise-quality tools in a small business-friendly way.
They approach new ventures with a healthy dose of realism
Gen Xers are typically portrayed as ‘more pessimistic’ than either baby boomers or millennials. This pessimism is borne of experience; whereas many millennials were still in education at the time of the 2007 crash, Gen Xers had to work through the upset. Likewise, the first dot-com bubble and numerous other booms and busts; Gen Xers have seen their share.
A younger entrepreneur might look at what are usually rather depressing stats on small business success rates and still assume that failure is something that happens to other people. For a Gen Xer, failure is a very real possibility — many will have first-hand experience of ventures going wrong throughout their long careers.
So how should telcos respond to this? It’s a generation that has seen enough not to be taken in by claims that a single app or comms package is make or break for a startup; however, they are savvy enough to appreciate that by accessing the right digital services, they will be better equipped to grapple with specific business problems.
As an example, the 3-year attrition rate for Australian startups is around 80%. Vodafone Hutchinson Australia (VHA) recognised the potential of offering a better way for SMEs to access cloud solutions to help them do more and become more efficient. This case study shows how BCSG was able to bring their cloud application marketplace platform to market in four months, resulting in direct positive results for VHA in terms of SME customer lock-in and churn rates.
Why SaaS is tailor-made for the ‘Me First’ generation
Unlike the idealistic boomers or the socially responsible millennials, Gen Xers are sometimes caricatured as a generation driven entirely by self-interest; an alternative, and less contentious charge would be one of pragmatism stemming from experience.
This generation may have grown up with out-of-the-box software, but the SaaS model can speak to their requirements and attitudes in a very effective way. “Why should I pay for bundled apps that I’m not going to use?” “Why should I sign up to a 50-user licence when there are only 20 of us?” Gen Xers are experienced enough to spot a raw deal, and a platform that comprises a comprehensive toolkit, along with the ability to scale up or down as required, can provide that blend of functionality and flexibility Gen Xers are looking for.
This is a generation seasoned enough to know what tools they need for their business to have the best chances of success. They want to access market-leading solutions in a no-nonsense manner and by offering a platform for this, telcos are presented with a clear opportunity in terms of both multi-product upselling and SME churn reduction.
Find out more about telecoms cloud services and developing your own cloud application marketplace by heading over to our resource centre. Alternatively, you can check out our page on cloud services brokerage solutions for telcos and see how it can be part of your new Gen X SME strategy.