Small businesses failing to satisfy customer expectations by resisting digital technology


Small businesses are falling short of meeting the needs and wants of digital-savvy customers due to a reliance on gut feelings and traditional ways of operating, according to Telstra Executive Director, Small Business, Brendan Donohoe.

Commenting on the 2018 Telstra Small Business Intelligence Report, Donohoe said there was a gap between what customers want and what small businesses are delivering in terms of how customers find businesses, how they prefer to interact and what keeps them loyal.

  1. Online is the new word of mouth: 76% of business owners consider ‘word of mouth’ (referral from others) to be the most significant driver of new sales, but for 71% of consumers, it comes behind online search and online reviews.
  2. Build it and they will come: A mere 36% of sole traders have a website when 89% of customers say they want a website that’s easy to navigate and 48% of customers say they will stop considering a business if it doesn’t have one at all.
  3. Customers are on the go: Two in five e-commerce businesses (43%) do not have a mobile-friendly website, while one in two (48%) of customers are shopping on a mobile device at least once per week.
  4. Reward loyalty: A rewards program is important for more than one third (39%) of customers, but only a minuscule 14% small businesses offer one.
  5. Face to face is out of fashion: Three times as many customers want to communicate via online chat than businesses that offer it (28% versus 9%). Three quarters (74%) of small businesses like to communicate face-to-face but this is the preference for only 33% of customers.
  6. Need it now or never: Half (54%) of businesses expect on-demand delivery as part of the e-commerce experience in the near future, but the vast majority (76%) of businesses have no intent to use this technology.
  7. AI giving people a voice: One in two customers (45%) believe voice commerce technology such as Google Home, Amazon Alexa and Apple HomePod will enhance their experiences with businesses in the near future, compared with only 16% of small businesses.

Donohoe indicated that small businesses should seek to close the gap by embracing digital technology.

“Where we see a real opportunity for some small businesses is being open to change, safely putting a toe in the water with digital technology and in return, delivering a great experience for customers,” he said.

The 2018 Small Business Intelligence Report was informed by two surveys – one involving more than 1000 small businesses and the other with over 1,000 consumers.