Revenue among most small and medium-sized businesses (SMBs) is down during the pandemic. That’s no surprise. But there’s hope for SMBs: Our research suggests businesses that prioritize safety, focus on customer experiences, and commit to tech investments now set themselves up to succeed in the new normal.
In March 2020 and August 2020 we spoke to 2,300+ SMB leaders across the globe as part of our Small & Medium Business Trends Report. To drill down further into how the pandemic has affected US SMB owners, we surveyed 200 SMB owners as part of our SMB [COVID19] US Snapshot Survey.
As expected, business has been difficult, but owners are thinking about shoring up revenue, keeping their customers safe, and investing in an uncertain future.
Below is what’s top of mind for SMBs in the US during this pandemic, according to our latest data.
It is, of course, no surprise that SMBs have been hit hard by COVID-19. Among the 200 business owners in our SMB [COVID19] Snapshot Survey, more than half (51%) said their businesses have lost revenue due to the pandemic. In most cases, those revenue drops were substantial. Of the businesses that lost revenue, more than two-thirds reported revenue drops of 25% or more.
Another 8% of respondents said they’ve had to shut down temporarily or permanently due to the pandemic.
You might be wondering: Have certain sectors been hit harder than others? The answer is yes. According to our SMB Trends Report, across all sectors, 57% of SMBs globally say they’re struggling to keep their businesses afloat. That number is even higher for businesses in the following sectors:
And among those businesses, around two-thirds are struggling to stay afloat (69%, 67%, and 67% respectively).
But not every company has struggled with revenue. Nearly one in six respondents in our SMB [COVID19] Snapshot Survey reported an increase in revenue — and that’s not the only thing looking up.
In both our snapshot survey and full research, we found that despite challenges, a majority of SMB owners and leaders are feeling optimistic about the future of their businesses.
Among the 200 respondents to our SMB [COVID19] Snapshot Survey, more than three-quarters (79%) reported they had either seen signs that business was returning to normal, or that they were cautiously optimistic that it would.
In our SMB Trends Report, 72% of SMBs globally reported feeling optimistic about their futures.
But business leaders aren’t simply waiting for normalcy to return. They’re also taking proactive steps to make business work during this phase of the pandemic.
This includes pivoting their business models. 120 of the 200 business owners in the SMB [COVID19] Snapshot Survey reported making drastic changes to their operations or to their business models in response to COVID-19’s challenges. In more than half of businesses, this has meant adopting remote-work arrangements and creating socially distant protocols for interacting with customers.
In our broader SMB Trends Report, 48% of SMBs globally said they were adopting contactless services such as digital shopping, digital customer service, mobile ordering, and curbside pickup due to the pandemic. And in many cases, technology helps them make these pivots — especially for SMBs that are growing. In fact, 55% of growing SMBs say technology drives their customer interactions, and 51% say technology drives customer growth.
Right now, SMB business owners are focused most on safety. According to our Snapshot Survey, they want to make sure employees and customers feel safe, and consumers agree that it should be prioritized.
Our SMB Trends Report highlights how that focus has translated into ensuring safety and sanitation policies are up to par and in compliance with local public health mandates. Nearly two-thirds (64%) of SMBs globally report that they are focusing on safety and sanitation policies.
55% of SMBs also report that they are more careful in their customer communications since the pandemic began.
Why does this matter? Well, customer communications have changed for most businesses — 74% of respondents in our Snapshot Survey reported small or dramatic changes in customer communications.
The pandemic has put a premium on transparency. Consumers want to know what the businesses they support are doing to navigate the pandemic.
In response, businesses are making improvements to their communication channels. These include their websites, their social media channels, their local business listings, their email communications, and the text messages they send out.
So far, the data all point to a recognition among SMBs that it’s time to use technology. It can help them deliver digital customer support, offer curbside pickup, and improve their online communication channels.
It’s also what will help them grow sales. After safety measures, growing sales was the highest priority among SMBs in our SMB [COVID19] Snapshot Survey:
SMBs recognize the value in adopting new technologies, as well. Nearly two-thirds of the SMBs we surveyed described tech adoption as “very important” or “extremely important” to their operations.
And in our SMB Trends Report, we found out that more than half (56%) of SMBs globally reported that their companies use CRM technology in their day-to-day operations. That’s a 24% increase from just last year.
This is reflective of a trend we’ve seen throughout 2020: The pandemic is prompting SMBs to implement a variety of tech solutions. Around one in five SMB leaders report having implemented at least one of the following since the pandemic began:
So, while growing sales is a priority, there’s a recognition among SMBs that a solid operational foundation is necessary to grow those sales. It takes strong marketing, strong customer service, strong relationship management, and strong internal workflows to power sales.
That could explain SMB investment choices for the coming months. Among the 200 SMB owners in our SMB [COVID19] Snapshot Survey, nearly half reported they were planning to invest in digital marketing within the next six months, with 29% planning to at least double their investments in marketing and lead generation.
As SMBs look to heavily invest in digital marketing in the next few months, they’re also planning for the future of their business as a whole. In our SMB [COVID19] Snapshot Survey, 34% note they are planning, and another 32% say they plan to be much more proactive.
What that future looks like remains uncertain, and much of it depends on the world’s ability to slow the pandemic through treatments, public health, and the potential development of a vaccine. Regardless of what the future looks like,, two-thirds (67%) of SMB leaders globally in our SMB Trends Report don’t expect a full return to business as usual once the pandemic subsides.
And according to our Snapshot Survey, the vast majority of SMBs (two-thirds) say their safety precautions would remain in place, even if a vaccine arrived within the next year. Further, 46% of SMBs say they plan to offer more touchless customer interactions, even with a vaccine in place.
What does this mean? A digital future is forthcoming. Our SMB Trends Report shares that 45% of growing SMBs globally are preparing for future crises by adopting technology that helps digitize their interactions with customers and offers contactless services..
How can your SMB move forward with these stats in your back pocket? Ask yourself if you’re using the right technology to help your customers feel safe and make business easier. Read the full Small & Medium Business Trends Report for the latest insights.