Business as usual has been anything but “usual” over the past six months.
In early 2020, as the global economy thrived, most small and medium business (SMB) leaders were focused on how to win new customers and access capital. But, the onset of COVID-19 brought new challenges, including a health and economic crisis, shortly followed by the ongoing injustices against the Black community in the U.S. As a result, SMB leaders have had to adapt, but a surprising number remain optimistic about the future of their businesses while navigating uncertainty.
Today we released the fourth edition of the “Small and Medium Business Trends Report.” The report looks at how 2,300+ global SMBs are evolving in the midst of so much change. We had the unique opportunity to survey these business leaders in March 2020 and again in August 2020. Obviously, a lot has happened during those months.
The report shows how SMBs have shifted their business operations over the past six months. These insights can help SMB leaders adapt and prepare for the next normal as the business landscape continues to deal with the pandemic.
Here are three things that changed for SMBs between March and August:
1. Businesses are doubling down on customer communications
It’s more challenging than ever to meet customer expectations. SMBs have to worry more about safety and sanitation, meeting local health mandates, and offering contactless service. Implementing these measures is one thing, but making customers aware of them is another. So, it’s no surprise that 55% of the businesses surveyed are more careful about how they communicate with customers — and almost half have expanded the ways customers can get in touch with them.
Unsurprisingly, SMBs are leaning into technology to maintain their customer relationships. Over half of growing SMBs say tech drives their customer interactions or customer base growth. Really, businesses are meeting customers where they’re most comfortable: 63% of millennial consumers — and 61% of Gen Z consumers — surveyed in July 2020 say they’re more likely to support small businesses with a digital presence.
SMBs now lean into customer-focused tech in all kinds of ways, from offering online ordering for curbside pickup or delivery, to putting more focus on email and social media messaging. We also see a continued embrace of business technologies like customer relationship management (CRM). SMB leaders who use CRM cited delivering better and faster customer service as the technology’s biggest benefit.
2. SMB leaders are taking action for racial justice
The past six months have seen widespread calls from around the globe to address ongoing systemic racial injustices. As just one example, data shows Black SMB leaders in the U.S. are the most likely to struggle to obtain capital, as compared to their peers of other races and ethnicities. Zooming out a step further, one in three Black SMB leaders in the U.S. said their race/ethnicity has been a disadvantage in running a business, period. Along with a struggle to raise capital, Black SMB leaders in the U.S. disproportionately reported difficulty in networking, a task essential to helping their businesses grow.
But in light of the ongoing racial injustices and systemic racism, we’re seeing SMBs are taking action where they can. As of August, almost half (45%) of SMB leaders in the U.S. say they are taking at least one step to address issues of racial injustice, such as actively training employees on more inclusive practices or having conversations regarding race and diversity. Black SMB leaders in the U.S. have been notably active on this front, primarily through workplace training and public-facing actions.
3. Growing SMBs are accelerating their use of technology, but use fewer apps
We mentioned SMBs use technology to maintain customer relationships as they figure out how and when in-person business can happen safely. The pandemic is also driving those able to invest, to consider ways tech can help shape their future for the better. Growing SMBs, in particular, are 65% more likely to have accelerated their pace of technology investments due to the pandemic. They also focus on three key areas where technology can help: customer interactions, workflows, and internal communications.
What’s really interesting is businesses use fewer apps to get more done — and they’d love to use even fewer. The average number of apps SMBs use to run their business dropped over the past year. This coincides with a 24% increase since 2019 in SMBs’ use of a CRM system — CRMs are now used in more than half of SMBs and offer centralized systems for sales, service, and marketing within the same app. The technology (68%), consumer products (68%), and manufacturing (64%) industries are the biggest users of CRM systems.
Greg Howell, founder and president of Flexo Concepts, a small manufacturing business in Plymouth, Mass., put it best, “We’re starting to have those conversations today that we thought we might have 10 years from now. And the platform, and the ability for folks to work remotely, and the ability to quantify the work that’s being done, has made that all possible.”
Learn how SMBs are navigating the present and preparing for the future, by downloading and reading our latest Small and Medium Business Trends Report. Plus, find out the new technology trends reshaping the business world and see how they can help set up your business for growth.
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For more business and leadership inspiration, check out our entire Leading Through Change series.
