Close this search box.

SMEs say closer relationship with customers would boost their revenue by a third

The cost of in-store theft is higher than of online fraud. Image: Adobe Stock

Small and medium-sized businesses (SMEs) are struggling to build and maintain relationships with their customers, new research has revealed – and they blame Big Tech’s control of customer data.

In the survey, 43% agreed that acquiring new customers is their number one challenge. And almost 1 in 4 (24%) said that building closer relationships with customers will be critical in the next 12 months. Interestingly, it seems that closer connections could even lead to better business performance, with SMEs predicting they would increase their profitability by 34.9% if they could build more personal relationships with customers.

The research, published by marketing automation platform Klaviyo, surveyed 500 directors at UK based SMEs. When participants were asked about their key challenges, struggling to connect with customers was considered more challenging than standing out from the competition (31%), supply chain issues (30%) or access to finance (23%).

So what is responsible for this disconnect with customers? The results show that the challenges of doing business online are partly to blame.

4 in 10 (40%) of those surveyed reported that their greatest opportunity in 2022 was online expansion. But crucially, SMEs reported that eCommerce is a double-edged sword. Why? Doing business online means you must also market your business online and for SMEs, Big Tech is standing in their way.

Those surveyed told us they were spending an average of 43% of their marketing budget on social media marketing, but few feel in control of how it is spent. Over half (52%) reported that they didn’t feel fully in control of their marketing spend on Facebook, 61% said the same of LinkedIn, and 43% reported a lack of control when it comes to spending cash with Google.

Fortunately the future looks bright, with a third (33.6%) saying that their profits would rise if they were able to get back control over their customer relationships.

Even more promising is that 27% of SMEs are already investing in better customer analytics to understand how they can build stronger relationships. What’s more, 26% are looking to advanced marketing technology platforms that give them direct access to customers, in order to boost their business.

Andrew Bialecki, co-founder and CEO of Klaviyo comments on the findings: “For most small businesses, success is all about the ability to reach the people who are aware of or interested in their creations, and this shouldn’t be limited by technology gate keepers. The bill of goods that’s been sold is that you have to market your small business through the likes of Facebook — and that’s simply not true. The most successful small business leaders will be those who limit their dependency on ad networks and take back control of their customer data and relationships.”

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on