For the fifth edition of the "Small and Medium Business Trends" report, Salesforce analyzed the responses of more than 2,500 SMB owners and leaders around the world to determine: 1. How support from local communities has affected SMBs, 2. What SMBs are doing to deepen trust with customers and employees, 3. How technology helps SMBs grow, and 4. What has changed for SMBs over the past year and how that impacts their future. The focus of this article will be on the use of technology to enable business growth.
Small and medium businesses (SMBs) have endured significant changes for nearly two years, transforming their operating models through ongoing health crises, social unrest, and a highly volatile economy. Many SMBs have successfully navigated through uncertain times and have adjusted, readying themselves for future growth. Here are the four high-level themes and insights of the SMB Trends 2021 report:
- Communities and Governments Step Up for SMBs - Due to pandemic shutdowns, SMBs found themselves even more resource-strapped — all while struggling to maintain revenue streams. Governments and local communities alike stepped up to help. Two-thirds of SMB leaders say community support has been important to their company's survival. More than half of SMB aid applicants received help, with small businesses more likely to have received national/federal government aid
- Customer and Employee Engagement Take Priority - After a period of turmoil, SMBs are looking to deepen trust. To do so, they're focusing on providing employees with transparent communications and flexibility, while also meeting customer expectations. More than seven in 10 SMBs say their customers expect online transactions, and nearly the same proportion have an ecommerce presence.
- SMBs Embrace the Digital-First World - In an increasingly unpredictable world, SMB leaders are accelerating their tech investments — seeking technology to help their business survive even the most tumultuous times. More than half of growing SMBs accelerated investments in sales and customer service technology over the past year.
- SMBs Foresee Long-Term Changes from the Pandemic - Many SMB leaders have rethought their strategies in order to keep their businesses afloat; in doing so, operations became more efficient. SMBs now plan to keep some of those changes permanently. Three-quarters of SMB leaders believe shifts they've made to business operations over the past year will benefit them long-term.
Here are 10 important takeaways of the 2021 Small and Medium Business Trends report:
- To improve the customer experience, start with the employee experience. More than two in five SMBs have provided flexible working arrangements to employees during the pandemic. Growing businesses are more likely to have offered employees flexibility, compared to stagnant/declining businesses.
- Flexible work schedules and safety are top employee priorities. As the pandemic continues, employees are voicing expectations for new safety measures at work. They also expect flexible work schedules and locations. Trust must be the number business core value in order for companies to earn the loyalty and commitment of both employees and customers. Customers have greater expectations than ever before. As found in Salesforce's most recent Connected Customer survey: 90% of customers say how a company acts during a crisis demonstrates its trustworthiness. In addition, 83% of customers expect to engage with someone immediately when contacting a company — up from 78% in 2019.
- SMBs are using technology to deepen relationships with customers. In a decentralized and digital only or digital-first economy, SMBs are leaning into technology to improve customer engagements. According to the report, e-commerce is a prime example. Most SMB leaders (71%) say their customers expect online transactions. Accordingly, the majority of SMBs (63%) have an e-commerce presence — including nearly one-third (31%) who added it within the past year. In tandem with the rise of e-commerce, nearly all SMBs (90%) are focused on data security and taking action to ensure their customers' information is safe. Growing SMBs are particularly focused on this (95%) and are more likely than their stagnant/ declining counterparts to be taking action to secure their business online.
- SMB leaders are prioritizing moving their business online. The majority of SMBs (83%) have at least some of their operations online; of those, nearly all (95%) moved a portion of their operations online in the past year. Seventy-two percent of SMBs have increased their online presences during the pandemic.
- SMBs have embraced the digital-first world. The path to growth is via digital engagement channels. Most growing SMBs (71%) say their business survived the pandemic because of digitization. And during a time of change, growing SMBs are accelerating technology investments. Their top motivators are to increase productivity (62%), improve business agility (60%), and increase data security (54%). Customer service, sales and marketing are leading digital transformation for growing SMBs.
- Vast majority of growing SMBs use customer relationship management (CRM) to win a digital-first economy. More than three in five SMB leaders (62%) say their business could not have survived the pandemic using technology from a decade ago. The top focus areas for technology adoption for growing SMBs are: 1. customer service, 2. email marketing, and 3. e-commerce.
- Improving the quality of customer service is a high priority for SMBs. In addition to their accelerated tech investments, growing SMBs are more likely than stagnant/declining ones to leverage technologies like customer service software, email marketing software, and ecommerce software. Sixty-five percent of growing SMBs have increased investments in customer service software and 61% in e-commerce software.
- Vast majority of SMBs will invest in contactless services as a permanent capability. Three-quarters of SMB leaders think changes they've made will benefit them in the future. Many are making these changes permanent. As an example, the majority of SMBs (79%) plan to offer contactless services permanently, which is particularly true for those in the consumer goods, retail, and technology industries
- SMBs are adopting a work-from-anywhere business operating models. In the long term, more than two in five SMBs plan to have employees work remotely at least half time, but a similar proportion will have most employees work in-person. Working arrangements vary by industry. SMBs in the travel/hospitality and manufacturing industries are more likely to have employees working in-person compared with the technology industry, where SMBs are more likely to embrace remote work. 43% of SMBs have long-term work-from-anywhere plans.
- SMBs are looking for specific set of transferable skills and characteristic as they recruit in a digital-first economy. Those characteristics include market knowledge, problem-solving skills, and being flexible and agile. The top five characteristics for running a successful business over the next year is: 1. market knowledge, 2. problem solving skills, 3. flexibility and agility, 4. innovative mindset and 5. good leadership skills.
To learn more about the Small and Medium Business Trends Report, you can visit here.