How small and medium businesses fared during the pandemic
The pandemic significantly impacted SMBs, emphasizing the need for health, safety, and digital technology adoption. Salesforce's report shows SMBs resilient through technology, highlighting the importance of digital customer engagement and internal communication. Despite challenges, SMBs are optimistic, with a digital-forward approach key to future success.
Nothing could have prepared the world for the impact of a pandemic
As the virus evolved to infect the human population, we should now adapt to the changes it caused.
In its fourth iteration of its Small and Medium Business (SMB) Trends Report, Salesforce presented a bleak yet hopeful picture of what transpired amongst 2,300+ SBM owners and leaders worldwide. The data was gathered by The Harris Poll in March 2020 when the pandemic and lockdowns were ramping up and again in August 2020 when some lockdowns were easing.
The report reveals how SMBs are impacted by the pandemic and how it changed their business operations. It gives valuable insight into ways businesses and SMBs can prepare for a changing landscape. The report identified emerging trends that will be guiding business in the months to come. These trends are upholding safety in customer and personnel interaction, adapting digital technology in business, and using the pandemic’s challenges to recover and prepare for future crises.
This article will first talk about the impact of the pandemic as well as the measures taken by SMBs, and then it will look into ways for SMBs to move forward and evolve in the light of a new status quo.
SMBs were very optimistic at the beginning of 2020. Faced with the usual threats of stiff competition from larger companies and expanding their business portfolio, nothing could have prepared them for what was to come. The three areas where SMBs had much to work on during the pandemic were health and safety, customer communication, and adapting digital technology.
Health and safety
Customer safety should now be a priority of many SMBs. The community expects them to abide by local and national health regulations, and they have as 59% expressed following the regulations. 64% of SMBs also have safety and sanitation policies and procedures for areas where customers and even employees are, which is essential considering the virus’s rate and medium of transmission. To further minimise transmission, some 48% of the SMBs have utilised digital and contactless services. This means that customers will have less to no contact with the employees, and even employees will have less contact with each other. Some businesses have even gone for remote and work-from-home set-ups. Even the office layouts of 43% of the SMBs have changed to implement physical distancing.
These safety measures would be rendered futile, though, if the customers are not made aware of them and are not made to follow them. For this reason, businesses have explicit instructions and labels for what to do while inside the premises. In addition, 55% of businesses have added policies and measures to communicate with their customers. Some might feel threatened by the new health measures, so correctly communicating with them might help.
Even without the pandemic, the SMBs’ relationship with their customers matters much. It should come as no surprise when they have started adopting digital technology in customer relations. This comes in different forms, from social media to websites and email marketing. Since 2019, the use of a customer relationship management (CRM) system in SMBs has seen a marked increase of 24%, which means that more than half of SMBs are now using CRM. The most prominent industries that use CRM systems are technology, consumer products, and manufacturing.
In the report, half of SMBs have added new ways for their customers to get in touch and interact with them. Some SMBs, for example, added a chatbot on their website, allowing customers to inquire about the products and services of the business, especially about how to get them. From online transactions to home or pick-up delivery, more SMBs are now using digital technology to get their products and services to their customers.
Adapting with technology
These benefits have made it easier for SMBs to shift to using technology in the future. 65% of them are now investing in technology to improve their businesses, especially in three key areas: workflow and production, internal communication, and customer interaction.
It is also quite interesting to note that as businesses use technology to get more done, they use fewer apps. So, instead of having an app for each part of the system, they are streamlining the use of apps and software to only focus on those that matter – in other words, system integration. 72% of SMBs would want centralised software to help them manage different business functions from sales to marketing and support. If you are in the market for effective and efficient systems and app integration software, then you should check out our services. We work with clients to create a seamless system or app that integrates vital work areas. The best thing about it is that it is unique and tailored to your business.
Of course, despite all the good news, the global market is still primarily affected. Only 24% of SMBs have accelerated their investments in technology to meet the times, and the remaining are either slow to adapt or not at all. This should not come as a surprise. With businesses forced to remain closed, there isn’t much capital to venture into technology. Revenue has significantly declined. Most SMBs say that limitations to their operation impact the viability of their business (60%) and that public health requirements add to their burden (59%). 57% of SMBs are now struggling to keep their businesses afloat.
SMBs must also meet their customers’ expectations, which were already difficult during the times before the pandemic. 7 out of 10 customers expect businesses to improve because of the pandemic, with 88% expecting businesses to fast-track using digital technology because of the pandemic. 66% are likewise expecting companies to be able to cater to their unique needs.
Other challenges SMBs are facing include hiring the right talent, motivating existing employees, and finding the right technology. The last one is tricky to land. SMBs are looking for technology that can positively impact speed and quality. 7 in 10 SMBs want technologies that score simply on ease of use, price, and trustworthiness of the vendor.
The future with COVID-19
Despite the uncertainties, most (72%) SMBs are still optimistic about what the future brings. Interestingly, the highest level of optimism can be seen in the sectors of healthcare (83%), technology (80%), consumer products (77%), retail (67%), manufacturing (66%), and travel (60%).
The current normal has shown us that SMBs that had been aggressive in digital technology before the pandemic could ride the waves of lockdowns and health concerns better than their counterparts who held back on technology.
The report has shown that SMBs must improve on critical areas: customer relationships, automation, and using technology to plan for future crises.
The pandemic has redefined how we interact with one another. Likewise, businesses must also change with the times as more people are now moving towards digital technology for much of what they need and do. And since customers are online most of the time, businesses must also go online. SMBs must transition to provide digital services and experiences. A bit over half of SMBs now rely on technology to interact with their customers, and this is not enough, as the public expects even small businesses to transition to online services.
SMBs should also consider minimising personal interaction with their customers while conducting business. This is in response to health concerns as safety becomes the priority. Here at HeadChannel, for example, we have adjusted our project visibility. We have also been using JIRA software tools when giving reports to our clients. Besides this, there are other ways for SMBs to remain in contact with their customers. They can, for instance, offer different delivery options, like a curbside pick-up. They can expand ways of ordering online. They can even offer contactless payment. Businesses with ample cash flow can extend their return policies and even develop transaction flexibility. So far, only 49% have started offering flexibility to their customers.
Another area where SMBs can improve is marketing automation. 41% are now using marketing automation, with another 25% planning to shift to within the next 12 months. SMBs have seen how marketing automation improves business and marketing by tracking sales and website traffic, allowing SMBs to respond better and improve their services.
Finally, there is much to learn from SMBs who were able to prepare for a crisis like the current pandemic. Many of these are growing SMBs who have embraced digitising their operations years ago and earmarked emergency funds for any event. They could easily navigate the challenges by digitising three salient areas.
Digitising customer interaction
The first is digitising customer interaction. They could offer or shift to contactless services early and easily because they already had a system. They could still get orders and keep operations running even as businesses were disrupted. Out of the respondents in the study, 45% have shifted to using technology for customer interaction and contactless services. SMBs should consider using software for email marketing, customer service, and e-commerce.
Digitising internal communications
The second is digitising internal communications. Moving meetings online and using online projects or task collaboration makes working together easier despite the distance. This also fulfils the basic need of people to communicate as it still allows co-workers to interact and ask one another how they are doing.
And third, is digitising workflows. Like in internal communication, moving workflow operations and processes online will help get things done. Working from home has become not just an option but a necessity. 39% of growing SMBs have used technology to digitise workflow.
Right now, the priority of many SMBs is to recover from the impact of the pandemic. Many businesses are likewise looking into how they can improve their business resilience. 60% of SMBs will be enhancing their business in some capacity as opposed to the 33% who will return to how it was. This is a welcome development as more customers will see the improvements they have made. And much of the improvements will be technology-driven, with some digitising customer interactions (38%), internal communication (35%), and workflow (34%).
We are living in a pivotal moment in human history. There was no way to prepare for and see what 2020 would be back in 2019, but those who have invested in the digital revolution were able to ride the tides better. What will come in 2021? Maybe work-from-home will become work-from-anywhere. Maybe Zoom meetings will become VR meetings. Truth be told, no one knows. Returning to normalcy will be most welcome, but there’s no assurance. For now, the best we can do is to evolve and improve.
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