29 Oct Thrive to Survive: Embracing Technology
The world is in the midst of the ‘Forth Industrial Revolution’; an era characterised by an avalanche of digital innovations changing the way we are running and doing business. In the realm of SMBs, owners are having to embrace technologies to survive.
According to Digital Opportunities for Today’s Small Businesses – a 2017 Deloitte Access Economics Report – only 30% of all SMBs have a system that can record and analyse sales, marketing, and customer service information. This leaves significant room for SMBs to embrace emerging technology and become digital savvy.
Making decisions about digital technology
There are many digital tools available for SMBs to connect with their customers and grow their business. This includes predictive analytics, big data, business intelligence, and customer relationship management (CRM) software. For some owners and managers, the advent of new technologies is a great opportunity. Yet for others, it can be an overwhelming prospect.
Its predicted that the average cost of digital technology expenditures amounts to $52,100 per year for SMBs. However, the benefit of investing in the right digital tools can add huge value to the business. Such expenditures are vital to the survival and growth of SMBs across Australia.
The accelerating shift to online interactions
There has been a significant decline in the proportion of customers making face-to-face purchases. This is due to an uptake of online sales channels. Replaced by sales via email and online platforms, face-to-face sales dropped from 45% in 2015/16 to 39% in 2016/17. With the current rate of change, the share of face-to-face transactions could fall as low as 24% in 2022. SMBs that expect to be doing the majority of business face-to-face in five years’ time will be in the minority. They may also face higher costs relative to their competition.
Beyond the overall shift online, customers see in-store and online shopping as complementary. While transactions are increasingly being made via online channels, it may not be the first or only interaction the customer will have with the business. This emphasises the importance of integrating both brick and mortar and an online presence to deliver the full customer experience.
Additionally, customer enquires and complaints are shifting online. Face-to-face interactions are expected to drop 3 percentage points in the next five years to 29%. Similar to sales, customer interactions are taken place via email, the website, and social media platforms. The survey revealed that email is now the preferred channel of communication for customer enquiries, overtaking the phone. For this reason, software that allows businesses to respond quickly to customer enquires is a critical investment for continued growth and survival of SMBs.
Sales and marketing: tools and best practice
Sales and marketing tools have always been critical to the success of small business. As informal processes and word of mouth are replaced by online platforms, successful SMBs will need a more systematic approach to meeting customer needs.
In an increasingly competitive business environment, there is a greater emphasis on getting sales and marketing activities right. The survey indicated that Australian SMBs have a solid understanding on their customers and how to acquire new customers. However, only 1 in 5 use digital tools to target new customers. This leaves significant room for SMBs to strengthen their digital sales and marketing skill set.
Businesses stated they knew their customers. However, they are not taking full advantage of opportunities for personalised marketing. Based on previous interactions or purchases, only 22% of businesses reported using this. With an abundance of online and physical advertising content, customised marketing is a key method to engage customers.
According to the ABS, only 31% of all Australian businesses have social media presence. With only 1 in 5 businesses regularly use social media to engage with customers. This is surprising, given the relative ease and low cost of using social media. Social media offers a major marketing avenue for SMBs. With three quarters of all Australians spending more than 12 hours a week on social media, this suggests widespread access for existing customers.
Artificial intelligence technologies are still relatively new, with only 10% of SMBs currently use it in several business functions. Business Intelligence (BI) provides users with power. The power of knowledge. Through this knowledge, BI can accelerate and improve decision-making, helping to gain a competitive advantage over business rivals.