Small businesses increase technology spending to take on bigger rivals
As consumers seek out more compelling customer experiences, SMBs are realising that they need to be more like big businesses when it comes to technology investment.
It is often said that small and medium business (SMB) leaders are too busy running their business to think strategically, but a report on technology budget outlooks reveals SMBs are now approaching technology strategically, much like their much bigger competitors. And the reason can be explained in two words: customer experience.
Successful SMBs have always understood the importance of customer service, and in many instances have outshone their mega-competitors – indeed, that has been their competitive edge. But the digital marketplace has changed the rules of customer engagement.
A Forrester report on SMBs and technology spending confirms that they are broadening their traditional focus on customer support and are starting to provide the comprehensive customer experience (CX) that consumers now expect and demand. New market entrants, start-up digital disruptors with a singular focus on personalisation and CX have created new service benchmarks.
Alert and agile big businesses have responded to the challenge with heavy investments in innovation, new service models and enabling technology, while SMBs, which have typically been financially conservative and slow to adopt new technologies, are adjusting their mindsets to the digital marketplace.
“SMB behaviour is becoming increasingly similar to that of larger enterprises in both their business priorities and their adoption and utilisation of technology,” Forrester states.
Greater focus on customer priorities
Improving their customers’ experience is now front of mind for SMBs, who have always been sensitive to the cost of doing business. This is borne out in Forrester’s findings – when asked about their top priorities over the next 12 months, 36 per cent nominated growing revenue ahead of reducing costs (29 per cent). Tellingly, the next most urgent priorities were improving CX (27 per cent), improving products and services (23 per cent) and addressing rising customer expectations (22 per cent).
These business priorities are driving SMB investment in technology. “SMBs are becoming more active in both new technology adoption and acceleration of their refresh cycles. Just as similar priorities guide SMBs’ and [big business] investments and focus, SMBs’ technology investment patterns map closely to those of [large] enterprises.”
A strategic focus on IT spending
According to the report, 82% of SMB technology budget decision-makers expect to maintain or increase their IT spending in 2017. Plans to spend more on technology are also matched by a strategic focus on where that investment should occur.
Alert to technology trends, SMBs plan to increase their use of both software-as-a-service (SaaS) and hosting to access the latest CX technologies. SMBs that have already implemented customer-focused software solutions are evaluating new options.
Forrester believes SMBs have become “highly attuned to the customer experience value proposition”, which means big investments to replace older customer service technologies.
Digital and omnichannel consumers don’t care about the size of your business when it comes to finding the best customer experiences. For SMB decision-makers, that means adopting a big business mindset toward technology in order to compete and Forrester’s research shows SMBs are up for the challenge.
“SMBs are looking and behaving increasingly like [large] enterprises in terms of business drivers, technology investment patterns and technology utilisation,” the report concludes.
“SMBs are now quicker than [large] enterprises to pull the trigger on replacing technology solutions that aren’t meeting theirs or their customers’ needs.”
It seems small business has grown up at last.