Many New Zealand small to medium-sized enterprises (SMEs) rely on word of mouth to deliver new business and spend modestly on digital marketing, according to research from internet domain name provider Dot Kiwi.

While only half of SMEs have a website (56%) and most use email to communicate to their regular customers (81%), even fewer use common marketing tools such as search engine optimisation (SEO) and digital advertising, which are being used by larger companies such as banks, retailers and utilities to their advantage.

The research carried out by Dot Kiwi found that 50 % of SMEs spend less than $1000 annually on marketing, relying on existing networks and word of mouth.

As a result, there is a correlation between their web traffic and their marketing spend, with low spend correlating with low visitor numbers.

A third of SMEs with a website say they receive less than 50 visitors each week, whereas 25% had no idea about their web traffic numbers.

Angus Richardson, Dot Kiwi managing director, says SMEs should be tracking their website visitors, at the very least, so they can track the effectiveness of their sales and marketing efforts.

Beyond that, for a relatively low investment, website owners should optimise their existing digital assets by applying some automation to their marketing to make it quicker to communicate with customers.

“Many business owners don't appreciate the value of a website visitor. Once a visitor is at your website, you have the chance of converting them to a customer either through eCommerce, an online newsletter, or a social media connection.

“60% of New Zealand SMEs can't take payment on their website, but that doesn't mean they can't convert someone into a newsletter subscriber.

35% of SMEs say they receive most of their enquiries from their website, but there is potential to do more.

“Using search engines such as Google and Bing has become routine for New Zealanders when looking for a business, product or service. It might come as a surprise though, that only 77% of SME respondents say they use them when searching for businesses online. 18% search the internet by typing in web addresses, while 4% use a directory service.

Despite the importance of search, only 27% of SMEs optimise their website using SEO, and 22% use paid search engine advertising.

That is set to increase, as 15% of SMEs will look to engage SEO and 16% paid search engine advertising.