While the UK small business telecoms market offers the best growth opportunities for service providers, its nuances and complexities can be difficult to navigate. Most service providers are continuing to segment the market by employee base, but research by leading data and analytics company GlobalData reveals that this is too simplistic, and a more sophisticated, focused approach that also utilizes third-party channels is required to truly reap the benefits.

Robert Pritchard, Principal Analyst for Enterprise Technology and Services at GlobalData, says: “It seems obvious that strategic focus is key to winning in the UK SME market, but this is not always realized. While it is a lot simpler just to segment by number of employees, such a complex and dynamic market requires a smarter go-to-market strategy. Instead, service providers need to demonstrate understanding of their strengths and match these to target customers’ evolving needs. The addressable market can then be maximized through third-party channels. In this way, service providers can identify that sweet spot where their direct go-to-market proposition is differentiated because their ability to serve the whole market is finite.”

By identifying their advantages—covering portfolio, network, value-added services, brand, price, or customer support—service providers should be able better to identify their target customer groups.

Pritchard continues: “This may require go-to-market partners for areas such as security and cloud, but equally by using resellers to address the ‘long tail’ of businesses that do not offer the best commercial return from direct sales (or those businesses that choose not to source their services from the ‘big four’ national telco players).”

GlobalData analysis finds that most service providers continue to segment the market by employee base, usually in sub-groups from zero to 249 employees. In parallel, service provider portfolios are increasingly the same as those offered to larger enterprises, including cloud services, security, Internet of Things, and unified communications. Portfolios are also very similar across service providers, both through the direct and indirect channel.

Pritchard concludes: “If you add up the reported number of the SME installed base across national network-based service providers, the direct total comes to less than two million. This implies that the majority of the UK small business population either uses third-party resellers or, even more likely amongst SoHos, source their telecoms services using consumer-oriented products. Clearly, just counting numbers of employees is too simplistic an approach.”