$150k and counting... Digital Kiwi SMEs bask in higher revenues
Savvy New Zealand SMEs are benefiting from digital with the Yellow SME Digital Readiness Survey revealing the average annual revenue of SMEs using digital marketing tools is $150,000 higher than SMEs disengaged from modern marketing practices.
The survey, commissioned by Yellow and conducted by Colmar Brunton, showed Kiwi businesses that are online enjoy a range of benefits.
Forty per cent said digital helps boost their revenue and more than half said it generates positive word-of-mouth.
Yellow CEO Michael Boersen says small businesses are vital to New Zealand’s economy, contributing nearly 30 per cent to our GDP each year, and the economic benefits could be substantial if all SMEs used digital tools to help grow revenue and productivity.
“We commissioned this research to put SMEs under the microscope and understand which digital marketing tools they’re using and what’s working for them," Boersen says.
"It’s important we share this information amongst the SME community to help them market their businesses better and in turn grow."
However, Boersen was quick to point out that all is not rosy when reviewing the finding of SME’s marketing practices.
“It’s hugely concerning that overall there’s been little progress in the uptake of company websites around the country since last year – it’s stayed stagnant at 50 per cent," he adds.
"So we’re at least three years behind Australia - their uptake was at 52 per cent in 2011.
“What SMEs need to remember, is that websites aren’t just about e-commerce - they’re a vital research tool for customers.
"Almost half (47 per cent) of people who researched online bought offline and smartphone users are even more sophisticated, with 74 per cent of them using their device to research a product or service.”
Further, the research examined how confident businesses are in the effectiveness of their digital tools, and it found that it’s not always the highest rated that are top of the list for small business owners.
“If we look at websites for example, 61 per cent of SMEs agree that their website is effective at promoting their business," Boersen explains.
"Despite this, just 16 per cent of those without one are considering getting one in the next six months.”
Consideration of social media however, is higher than websites with around a quarter (26 per cent) of business owners planning to use it in the next year or so.
“SMEs considering social need to be aware that for those using it, the jury is still out," Boersen adds.
"The majority (55 per cent) of SMEs using social weren’t confident that it was effective at promoting their business, or described it has having a ‘neutral’ impact.
“It seems SMEs are prioritising social, but it’s a bit of the cart before the horse. Social works best when there’s a strategy and call to action behind it.
"Often that’s to drive web traffic, so if there’s not one – or it’s a bad one – it’s a bit of a wasted exercise.”
In terms of what’s next for SMEs, Boersen says, “We can expect to see savvy SMEs turning to video to boost their content play online and on social.
"While uptake is low at seven per cent, there’s a 53 per cent confidence rate."