In this digital-first world, small and medium businesses don’t have much to worry about after all. The fifth edition of the “Small and Medium Business Trends” report shows that communities and customers “still want to support SMBs.” This striking revelation comes in the face of a change in consumer behaviour and business models driven by the pandemic.
The report shows that communities and customers want to support SMBs despite restrictions on in-person events and interactions. While this is a positive sign for SMBs, the leaders at these small and medium businesses are no longer sitting on customer support and increasingly moving their business online.
SMBs embrace the digital-first world
Each year, the small and medium business trends report from Salesforce shows the shift in how SMBs are conducting business. This year, the report highlights how SMBs are adapting, evolving, and embracing the change put forth by the pandemic. After prioritising customer and employee engagement, SMBs have been found to embrace the digital-first world.
Even before the start of the pandemic, the SMBs were facing the need to embrace digital and take their business online. However, in early 2020, the pandemic forced them to make that transition faster. The digital transformation of small and medium businesses took a new turn, as evident from the fifth edition of the Small and Medium Business Trends report.
The report shows that 83 per cent of SMBs have at least some of their operations online. Among these SMBs, nearly 95 per cent moved a portion of their operations online in the past year. The drive to embrace digital is driven by the safety and convenience of customers and employees. Among the SMBs surveyed, 43 per cent said they moved operations online to serve customers safely while 37 per cent cited catering to customer convenience as the reason.
These two reasons were followed by enabling safer work arrangements for employees at 32 per cent, increased productivity at 30 per cent and staying competitive at 29 per cent. The report also shows that nearly three-quarters of SMBs have increased their online presence, in the form of social media, dedicated websites, email, ads, over the past year.
In a nutshell, the report shows that 72 per cent of SMBs have increased their online presence. Among these SMBs, 46 per cent have seen a slight increase while 27 per cent are reporting a significant increase. The report also shows that 20 per cent SMBs have seen no increase while 8 per cent are saying they don’t have an online presence. The digital transformation is happening but there is still room for adoption and embrace of digital tools.
Technology investment outpaces previous years
The Salesforce report also shows that 71 per cent of most growing SMBs credit digitisation for surviving the pandemic. These SMBs are seeing the use of technology as a differentiator for helping build relationships and establish a foundation for growth. The survival during the pandemic due to digitisation has made SMBs accelerate technology investments.
The report shows that 42 per cent of growing SMBs accelerated their technology investment in August 2021 as opposed to 33 per cent in August 2020. The report also showed a slight increase in the number of growing SMBs staying steady with their technology investments. This number was at 38 per cent in August 2021 versus 35 per cent in August 2020.
In August 2020, 32 per cent of growing SMBs reported slowing technology investments and that number dropped to 20 per cent in a year. These growing SMBs are also reporting increased productivity, improved business agility, and increased data security as the top motivators for accelerating technology investment.
In terms of categories, both the growing SMBs as well as stagnant/declining SMBs have accelerated their technology investment in customer service, sales, marketing, IT operations, and human resources. Among growing SMBs, the acceleration across these categories stood at 51 per cent, 53 per cent, 50 per cent, 47 per cent, and 33 per cent, respectively. The stagnant/declining SMBs reported 32 per cent, 29 per cent, 31 per cent, 32 per cent, and 19 per cent acceleration in technology investment across these categories.
SMBs adopt CRM and other technology solutions
For SMBs, the pandemic forced them into a survival mode but now they are trying to become competitive. The fifth edition of the “Small and Medium Business Trends” report shows that three in five SMB leaders feel that their business could “not have survived the pandemic using technology from a decade ago.”
After a year of remote work and digitised customer experiences, SMBs are particularly relying on technology that enables both. This has led to SMBs embracing customer relationship management (CRM) systems. The report further shows that medium and growing businesses are leveraging CRM more than other businesses.
The analysis of responses from more than 2,500 SMB owners and leaders around the world shows that 56 per cent now have a CRM system. It also shows that 67 per cent of growing SMBs and 48 per cent of stagnant/declining SMBs are using CRM systems. Further, the report shows that 78 per cent of medium businesses have adopted CRM while only 42 per cent of small businesses are using the tool.
The SMBs are also reporting growth in the adoption of technology solutions such as customer service software. In August 2021, the use of customer service software stood at 53 per cent as opposed to 50 per cent in August 2020. The use of email marketing software grew from 52 per cent in August 2020 to 53 per cent in August 2021.
The e-commerce software saw growth from 48 per cent in August 2020 to 51 per cent in August 2021. In August 2021, the project or task collaboration tools and marketing automation tools also saw growth to 51 per cent (49 per cent in August 2020) and 45 per cent (41 per cent in August 2020), respectively.
The report does highlight that growing SMBs are more likely to leverage technologies like customer service software, email marketing software, and ecommerce software than stagnant/declining SMBs. In adoption over the past six months, these SMBs reported the largest uptick in the adoption of project or task collaboration tools. The report further notes that around three in five growing SMBs are now using each of these tools.