Small businesses are the backbone of the US economy, generating local jobs and innovation while encouraging entrepreneurship among minorities, women, veterans, and other community segments.
As stated by Florida tax monitor data, small companies employ 48% of all Americans and generate 43.5 percent of the country's gross domestic product (GDP). At the speed of light, the corporate environment is continuously moving to new digital technologies. However, many small company owners are unable to keep up with this small business digital transformation.
In the opinion of recent Google-commissioned small company research, 80% of small businesses in the United States are not fully utilizing digital technologies. A few more reasons at play prevent small firms from adopting digital technology and falling behind on digital transformation trends.
Ignoring digital benefits or refusing to adjust is a surefire way to fail in a constantly evolving digital world.
"At least 40% of all businesses will die in the next ten years… if they don't figure out how to change their entire company to accommodate new technologies."
— John Chambers, Cisco
Factors Contributing to the Lag in Digital Transformation Race
Keeping up with New Technologies Is Tough
Numerous small business owners are unable to keep up with emerging digital transformation trends. Various digital opportunities for small businesses exist to employ in their operations. However, companies lack the will to leverage digital capabilities and so fall short of their full potential. In addition, limited resources create an impediment to digital adoption inside. Employee experience and digital skills are other significant impediments to SMBs adopting digital technologies.
Small businesses need to overcome their fear of change to capitalize on the digital dividend, accelerate growth, and scale effectively.
Change in Customers Behavior and Persona
Changes in customer behavior and knowledge of SMB consumer personas are critical components of small business digital transformation and are the primary issue confronting small business owners. The most significant change that small companies anticipate in the next five years is a shift in consumer expectations and personas.
Owners believe they understand their businesses since they are small or medium-sized business owners. Still, customers have a different perspective more than 70% of the time due to social and digital transformation trends. For the next five years, the top three consumer trends are expected to increase product or service customization, increased emphasis on customer experience, and higher expectations of quality or value for money.
"Clients are going to expect a lot of personalization in their businesses; consumers are going to expect the same. To avoid data silos, having an emphasis on driving real-time information from customer data and sources is core for any company to become digitally native."
– Bibhakar Pandey, Vice President & Leader of Customer Experience, Marketing Services, Capgemini.
Need Assistance for Right Decisions
Making technological decisions is challenging for small firms. Additionally, many business decisions are made by small business owners. Therefore, they must have the appropriate knowledge and help when making digital decisions involving various conflicting obligations.
Because the costs of digital technologies are so high, it is critical for small businesses to have sufficient information about the value of sales, service, and marketing technologies to select the appropriate digital systems, upgrade digital skills, and provide adequate protection and security. In addition, the small owners need timely assistance to cope up with small business digital transformation.
Small firms have several digital gaps in various areas, including internal skills gaps, financial gaps, and digital infrastructure shortages. Due to the utilization of high-speed internet connections and cloud-based technologies, these disparities are more significant for small businesses than large enterprises.
The owners need to cope up with different stages of digital transformation in small businesses. However, there is no denying the link between digital and productivity, which is critical for productivity.
Digital Transformation Approaches:
Adoption and Upgradation to CRMs
To evaluate client behavior, it is critical to implement and improve your customer relationship management system (CRM). In addition, businesses should leverage cloud-based solutions to strengthen their relationships with their consumers.
According to Deloitte, SMBS that use CRM generate 44 percent more income than those who do not have a system or only have a rudimentary system. However, numerous CRM features, such as omnichannel customer care, marketing automation, social tools, and predictive analytics with automation are not part of the classic CRM model.
"Right from the start, based on our ICP, we focus on what level of personalization and automation needs to be built out and what touchpoints like overlays, retargeting, and remarketing are to be done to convert the customer in the end and take them to the SQL stage."
– Amitabh Ramani, Global Marketing Director, Jade Global.
Adoption and up-gradation of CRMs will open new digital opportunities for small businesses.
Improvement in Digital Infrastructure
To fill the digital gap and be a part of digital transformation trends, small businesses must embrace high-speed broadband for small business digital transformation. In addition, adopt digital technologies in the workplace to enhance SMB productivity and connectedness.
By incorporating innovation and technology, small firms may increase their competitiveness.
Below are few actions that can be taken for more digitally engaged small businesses:
Raising awareness of digital opportunities
SME training and upskilling programs
Promoting business innovation and the provision of new digital solutions
Implementation of Sales and Marketing Tools
In today's competitive corporate climate, the focus is firmly placed on the sales and marketing aspects of the enterprise. As a result, small businesses strive to capitalize on possibilities for personalized marketing based on prior interactions or sales and engage clients through customized marketing.
Amaysim is an example of a company that focuses on customized marketing using a cloud-based marketing platform; they ensure timely marketing communication and connect with clients in real-time via SMS.
Only one in every five small businesses uses digital tools or social media platforms to acquire new consumers or connect with existing clients. Incorporate artificial intelligence into different business processes, such as predictive analytics, automated product recommendations, and upgrade suggestions based on consumer behavior.
Shift to Online Interactions
Face-to-face transactions have decreased as a percentage of total sales, and the line between physical and digital is becoming increasingly blurred, resulting in behavioral adjustments.
The purchase is moving due to internet channels, or you might say that more consumers favor online purchases over in-person transactions. With the increase in online sales, small companies also need to enhance their delivery services to keep up with the demand. In addition, the shift in communication channels to emails, social media platforms, and websites have altered consumer behavior about enquires and complaints. As a result, implementing CRM software for service interactions has become a necessity of the hour to ensure a fast response.
Shift to online interactions of sales or any business operation is an escalating demand for small business digital transformation.
With the evolution of digital trends in small businesses, owners can leverage small business digital transformation benefits by using the techniques as mentioned above. Regular use of digital tools may help small businesses enhance their performance and adapt to dynamic business conditions and changing consumer expectations and the surrounding environment. Engage small companies in new digital prospects for success and business growth, resulting in a greater return on investment (ROI).
Why is digital transformation important for small businesses?
Digital transformation enables small businesses to ease out their operations, increases efficiency, automates workflow, helps to improve customer relationships. Adopting digital transformation enables to fulfill changing behaviors and needs of customers.
What are the most significant trends of digital transformation?
Here are few significant trends of digital transformation in the coming year 2022 that will impact the work culture of businesses.
Improved connectivity (5G)
Multi-cloud and APIs
What are key areas of digital transformation?
The key areas of digital transformation are as follows:
Business process transformation
Business model transformation