Digital Signage Industry Struggles in Taking its Technology to the Masses of Small Businesses

Posted by on Jul 6, 2011 in DOOH, Industry, Insight

There have been a number of companies who have popped up in the digital signage software division whose sole mission is to target the SMB. Targeting this particular market segment has benefits as well as particular risks. However, when you’re targeting the small to medium businesses you tend to run into some obstacles with the competition. This post will focus on some of the difficulties in targeting the small to medium business owner with a digital signage offering.  Let’s take a look at the possible issues involved. 

1. “We got what we were looking for at Radio Shack…”As a business targeting a small business, you’re going after someone who has learned to adapt to changing technologies, make due, and solve problems on their own. Often if they do not get what they are looking for at the first place they arrive, they go elsewhere to put the pieces together that will give them what they are looking for. SMB owners don’t need their hand held and in that case you are competing with Radio Shack, not with Scala.

2. The SMB is a bit squirrelly. In a previous post on the industry’s long tail, I said, targeting the SMB is “less like a two-ton gorilla and more like a thousand four-pound monkeys, difficult to chase down and almost impossible to corral.” While the opportunity is greater in the smaller deployments because they make up about 80% of the available market, getting a handle on them and selling them is much more difficult than most suppose.

3. Support is NOT Simple. This is a corollary to #2. Often the SMB feels they need to have their hand held through every piece of the process. Although margins are often greater in the SMB niche, many times they are eaten away by their demand for copious amounts of support hours. This is where software-as-a-service is truly put to the test. Support is sometimes the attempt to corral the little buggers.

4. Less is More. In feature-sets and price points, the SMB is generally a bit more conservative. Many would rather pay a lower price point and have less features on their system, rather than have all the whistles and bells. How many times do we hear, “all I want is something that is just a glorified PowerPoint presentation” or “I don’t need anything expensive, I just want to display some nice graphics rotating on a display.” Using an all-in-one Flash Player for such an application would generally suffice.

5. Scale is not obtained easily. The margins may be better on the SMB, but the scale is worse. Corralling the thousand monkeys cannot and will not be done by one or two companies. It is a group effort to make digital signage for everyone. When custom hardware projects are manufactured, they generally have a minimum order quantity. Because this is the case, the small-to-medium business owner cannot take advantage of economies of scale in digital signage hardware procurement processes.

6. Management is an issue. Unless content creation tools are made to be simple enough that a monkey could use them, you may lose them. Small businesses, while generally more adaptive and nimble can also be somewhat handicapped when the “non-technical” receptionist is also the chief cook and bottle washer. He/she may be used to wearing multiple hats, but making sure this is done with simplicity is of the utmost importance. Forcing a receptionist or some other office manager whose core competency is phone calls and emails to login to a Linux server and manage the digital content from that clunky portal will simply not work in most cases. Simple tools for the simple business. That is key.

7. Content is most certainly an issue. How many times have I personally heard, “are there some free templates I can see or use to get started in creating my content?” The beauty of using a Microsoft PowerPoint-like program is that such a software app already has hundreds and even thousands of ready-made templates to insert as backgrounds and sidebar options. Content may not be custom-made dynamic Flash, but it needs to be something–even if it is rather simple else why would they be going to Radio Shack to procure hardware and software for their displays.

8. ” Just what is this going to cost me?” Small business owners may be willing to pay more for the simple and the easy tools, but overall they are conscious of budgets and often recognize that DOOH may be a luxury for them. Choosing the right price point so COGS is covered can often be difficult–especially when the market demand begins to dictate price.

If you’re a member of the community of small and medium businesses, we welcome you. You represent the segment many digital signage companies are currently targeting. If you represent those digital sign vendors wishing to target the SMB, we also welcome your input as well. We can all certainly learn from the successes and mistakes of others. In the world of the small business owner, things are ALWAYS changing. Adapting concurrently is necessary for survival.

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