SMB Growth In 2016: Digital Marketing Will Make The Difference
Local businesses’ prospects are good as they embrace social media platforms, consumer review sites, and SEO, says Yelp.
Roughly 85 percent of American small businesses active on Yelp expect their revenues to grow in 2016 — due largely to the expansion of digital tools aimed at SMBs, Yelp reported in its first annual Small Business Pulse survey.
Businesses estimated that revenues would increase by 26 percent, citing that digital marketing would “level the playing field.” In fact, 91 percent will use digital marketing tools in the coming year such as social media platforms (75 percent), consumer review platforms (48 percent) and search engine advertising (48 percent).
“It’s clear that the best local businesses value the feedback of their customers,” said Jeremy Stoppelman, CEO of Yelp. “Consumers now have the power to effortlessly share their opinions and experiences, which is a game-changer, helping savvy small business owners quickly improve and grow.”
SMBs social growth is more than simply running an Instagram account or Tumblr page. With big players — think Facebook’s rollout of SMB-focused ad tools, and its recent bid to unite social discovery and shopping with Professional services — actively embracing smaller businesses in the digital ad space, SMBs have reason to be optimistic about affordable, customizable options across a variety of platforms.
“There’s a misconception that only big companies have the capacity and resources to use sophisticated, high-tech marketing tools. Back when billboards and Super Bowl ads seemed like the only way to reach customers, small businesses were more constrained, but things have changed dramatically,” said Michael Luca, a Harvard professor of Business Administration and Yelp’s Economist in residence. “With an expanding set of tools to engage with customers, small businesses can leverage consumer feedback platforms to build higher-quality customer relationships.”
That said, SMBs still worry about how to best manage small marketing budgets — and what they might do if unexpected challenges arise. Specifically, the top identified issues include attracting and retaining customers (60 percent), managing a limited marketing budget (32 percent) and competition from larger businesses (30 percent).
To address that first concern, many SMBs are embracing loyalty programs, some of which reward consumers not just for in-store purchases but for online actions, such as sharing social posts and helping the business to curate a bigger following. As far as managing marketing budgets, the aforementioned social tools will help keep costs down — especially as companies like Facebook, Yelp, and more continue to position ad opportunities directly at SMBs.
“Small businesses are an important part of the economy,” Luca said. “This group of businesses is clearly optimistic, which is consistent with relatively strong consumer sentiment and a recent uptick in retail sales.”