Small businesses across Australia and New Zealand must adopt a digital strategy or risk losing revenue, according to a new report from Deloitte Access Economics (March 2016 release date).
Within five years, at least half of all sales will involve digital tools – so the 25% of small businesses that ignore digital will be severely disadvantaged. The report is a great reminder for SMBs to continue to explore new ways to integrate digital solutions into their sales and marketing strategies.
A key finding in the report shows that small businesses that invest in technology experience faster revenue growth, with a 1% increase in online services spend leading to a 2.9% increase in growth. Successful businesses are channelling this increased spend into innovative online tools and services, instead of the more traditional software and hardware stacks.
Digital is key to customer retention
In the report, 47% of SMBs state that retaining existing customers is their top priority, with 30% aiming to increase their proportion of returning customers in the next five years.
Technology is key to achieving this goal. Using strategic digital tools, small businesses can gain invaluable insights into what their customer want and need – and will have the ability to personalise and target content at the right time, in the right place.
“Successful SMBs are using digital tools to capture customer information, analysing this information to build personalised relationships and pre-empting customer demands.”
In fact, even small businesses that don’t rely on digital sales, still leverage digital marketing tools to engage customers – 29% use automated marketing, 24% use digital communications, and 6% use digital lead generation. Again, these businesses gain a distinct competitive advantage.
Lowering the cost of acquisition
Over half (57%) of SMBs are planning to expand their digital strategy, whether it’s simply to make more sales online or to add new digital channels.
Growth in digital lead generation and a reduction in cost per acquisition will go hand-in-hand. As the report states:
“Those SMBs which already make use of digital lead generation report lower costs for obtaining new customers than other SMBs, reflecting their ability to engage with customer quickly and cheaply.”
Gaps still exist
The report reveals that only 22% of SMBs use CRM software or services; under a quarter have the capability to capture online customer behaviours; and only 15% have the ability to personalise online customer experiences.
But as the above figures show – with a 1% increase in technology spend increasing your revenue by 2.9% – it pays to close these gaps.
The trends are clear; in 5 year’s time, the businesses that have invested appropriately in digital technology to help them acquire and retain customers will most certainly be victorious on the customer experience battleground.