As we enter 2021, the total number of businesses across the country that were forced to adapt due to COVID-19 last year has increased as the pandemic has expanded. These changes have meant, for some, a complete way of doing business and for others, making some changes to fully adapt to the new requirements and increase customer retention.
We asked over 500 CEOs and business owners of British SMEs the changes business owners have made to their businesses and how they are using marketing tools to communicate with customers.
Highlights of the study:
- 84% of British SME owners feel very or somewhat confident that the business model changes implemented will be effective.
- Almost half of them (48%) plan to maintain some of the changes.
- 21% of British SME owners invested in marketing software.
- Half of SME owners (51%) use social media to communicate changes to customers.
84% feel confident that changes to business models are effective
84% of British SME owners feel very or somewhat confident that the business model changes implemented will be effective in mitigating the financial impact of COVID-19. In addition, 67% are optimistic that the business will bring revenue in the first half of this year this year compared to the last six months of last year.
Almost half of them (48%) plan to maintain some of the changes like virtual services or online business once the pandemic concerns have eased.
Looking at the main changes implemented by SMEs, 35% of respondents have changed their business model to a new online delivery channel (online marketplace, etc). Looking at the breakdown by industry, accounting (41%), wholesale (37%) and distribution/inventory management (33%) are the three segments that have had the biggest change in business model adding a new online delivery channel.
22% offer new virtual services such as online yoga classes or virtual tours of homes. By sectors, energy and utilities (67%), telecommunications (67%), and marketing and PR services (40%) have added virtual services. In addition, almost a quarter of banking and financial services (24%) have also added a new virtual service as a response to the COVID-19 crisis.
Retaining and attracting new customers are the main challenges faced by SMEs
Despite this, two of the main concerns are retaining the existing customer base (15%) and attracting new ones (15%). However, these challenges vary depending on the size of the business. For instance, almost a quarter of sole traders (24%) admit having issues with retaining customers since the beginning of the pandemic. For companies with less than 100 employees (16%), the main challenge is the lack of funds. For companies with a maximum of 250 employees, the main challenge since the beginning of the pandemic is the lack of skills by employees required for new delivery channels (16%).
The role of software in enabling these changes
With many changes prompted by the pandemic, businesses were forced to invest in software to keep the business running. Software to enable teams to work remotely, like collaboration tools, and video conferencing; CRM, live chat, or marketing are the most popular implemented by SMEs as a result of the pandemic.
Half of business owners use social media to communicate changes to their customers
With a number of business owners concerned about retaining customers, how these changes are communicated to current customers is vital to keep them informed and make them feel they are part of the company. Looking at what channels companies used to communicate changes to customers since the beginning of the pandemic, over half of SME owners (51%) state using social media to communicate changes to customers. Other channels used are company website updates (46%) and email campaigns (27%).
Social media marketing skills needed by almost a third of SMEs
1 in 5 British SME owners invested in marketing software. However, social media marketing (27%) and web and app development (24%) are the skills most needed in 2021 by SMEs. Over a third of SMEs (33%) are planning to increase employee training budgets this year. Looking at the investment by the number of employees, SMEs with over 21 employees are planning on increasing the investment in employee training.
Banking and accounting firms invest in SEO and SEM for the first time since the pandemic
Companies are cutting down the investment in some areas of marketing and starting to invest in others that may suit their needs better since the pandemic. For example, looking at the investment by sectors, banking and accounting stand out as two sectors that have started spending on SEO and SEM tools. This could be explained by the number of companies in these sectors adding new virtual services.
43% of business owners surveyed that work in accounting and almost half of those who work in banking (45%) state having added a budget for the first time for these tools since the beginning of the pandemic. In addition, a quarter of those working in accounting (25%) have also invested in paid social media advertising for the first time. 29% of those working in banking have also invested in television and radio advertising for the first time.
*Data for the GetApp New Business Model Survey has been collected in November 2020. The sample comes from an online survey of 1,851 respondents that live in the UK.
The survey data used for this article comes from 539 participants who have qualified to answer. The information in this article corresponds to the average of all surveyed participants.
The criteria for participants is:
- Owner, founder, or another head role
- C-suite executive (e.g., CEO, CIO)
- President or vice president