SMEs ignore digital marketing strategies: Report

Most Australian businesses are not creating digital business strategies for the use of websites, eCommerce and mobile marketing and as a result are not getting the most out of their investments online, the new Sensis eBusiness report reveals.

The survey has prompted one expert to warn businesses their refusal to become involved in online marketing is holding them back and will actually hurt their reputations as consumers begin to reject businesses that are not operating in social media and other fields such as mobile.

“This is just another example of where Australian businesses are falling behind quite substantially when it comes to their consumer base,” says James Griffin, chief executive of reputation management firm SR7.

“Australian consumers are among some of the most savvy social media users in the world, and there is a huge discrepancy between businesses actually controlling what they do in social media and the businesses that are doing it properly or influence how consumers can research online.”

The survey reveals that only 17% of businesses operating on the internet have a digital strategy, with 79% saying they don’t have one and 4% saying they weren’t sure. For those businesses that did have one, use of the internet and websites were covered in 80% of cases, with mobile included in 36% and social media included in only 33%.

Griffin says businesses don’t have to operate in all fields, but they should at least be operating through social media and they need to have some sort of digital market plan to manage their spend and their strategy.

“It’s a pretty poor statistics and the fact is there is a lot of misconception regarding why marketing managers and businesses actually don’t pursue digital marketing strategies. Perhaps they don’t understand the return on investment they can get.”

“I think they need to immerse themselves in some sort of education. They should attend seminars where they can hear discussions about how to use social media, look at competition and what they’re doing, and then get in touch with third party providers, similar to ourselves, where you can work out your digital footprint and work from there.”

But despite Australian businesses lagging behind when it comes to developing online strategies, the report shows SMEs are starting to increasingly use aspects of social media including pages on Facebook, blogs and ads on other social networks.

The survey found 10% of businesses on the internet are using social media for business, including the use of pages on Facebook and Twitter profiles, starting blogs and placing advertisements on other social networks.

The main reason for creating these social media marketing profiles is to share conversations with customers, build networks, share advise and post photos and videos of their business. About 90% of the businesses using social media monitor comments made about their business, with over 60% actually responding to those comments.

“The most likely way that businesses reported using social media in their business was by having a page for their business on social networking sites, with one in three SMEs that used social media reporting they did this,” the report found.

“This was closely followed by having a blog for their business and placing ads on social networks. Other social media applications were much lower in usage by comparison to these three.”

Report author Christena Singh said in a statement the report shows while businesses are still behind when it comes to a coherent strategy to manage their digital initiatives, many SMEs are noticing the benefits of moving online into social media and other areas.

“One of the by-products of social network marketing appears to be that businesses are getting closer to their customers, listening and responding to client comments,” she said. “It appears that undertaking social networking activity is a positive experience for the majority of businesses.”

The survey found 60% of companies operating social networking activities believe it gave a positive impact to the business, with 40% saying it had no impact; none rated their experiences as being negative.

The use of websites has also increased up 5% to 61%, with the cultural, recreation and personal services sector having the highest percentage at 76%. The building and construction sector recorded the lowest amount of websites, although its penetration grew from 24% to 51%.

The survey also found SMEs operating with a website noticed the benefits, with 73% saying it increased business effectiveness, with customers able to find the business, and with the ability to promote products and services.

The report also recorded some growth in eCommerce, with 60% of businesses now taking orders over the internet and 70% receiving payments.

“The internet has opened opportunities for small businesses to sell to overseas customers, with three in 10 businesses making some of their sales to overseas customers. However, the majority of sales through the internet are still made to customers in the business’ local area,” Singh said.

Of those businesses taking orders over the internet, SMEs in New South Wales were the most likely, and those in South Australia the least likely. The survey also found intentions to introduce eCommerce platforms among SMEs that were online already has dropped by 3%, with many saying their customers would not be prepared to carry out transactions online.

About 12% of SMEs also said major concerns included the fact consumers would be able to compare their products with competitors.

“Once again, SMEs were most likely to report that they were making sales online to customers in their local area, with 63% reporting they mainly sold to customers in the same city or town. Of those SMEs that sold online, 27% had made sales to customers overseas,” the report stated.