The fourth edition of the report Small and medium-sized enterprises: the main trends collects information from more than 2,300 small and medium-sized enterprises. We asked them to tell us about the new challenges they are facing and the main solutions they have adopted to deal with the Covid-19 pandemic.
In the last six months, the traditional concept of business has been turned upside down.
At the beginning of 2020, in a stable global economy, most SMEs focused mainly on acquiring new customers and its position in the reference market.
But suddenly, the world as we knew it changed.
The COVID-19 pandemic has presented each of us with new challenges, forcing us to face a serious health and financial crisis. Businesses have suffered one of the biggest impacts and have had to learn to adapt very quickly. For this, the objective of the fourth edition of the report “Small and medium-sized enterprises: the main trends” it was collects information from media from around the world, including Italy, and examines the main strategies in detail adopted by them to cope with such a vast number of sudden changes.
We had the great opportunity to interview these people at two specific times. The first survey was conducted at the beginning of the pandemic, i.e. in March 2020, while the second was conducted approximately six months after the onset of COVID-19, i.e. in August 2020. The analysis of the responses received allowed us to monitors the priorities and critical challenges faced by the SMEs involved. Thanks to the data collected, we have described some key trends in business changenecessary to adapt to the new needs imposed in the last semester.
The information contained in the report is essential for every SME. It’s an essential tool for anyone looking to discover how best to reinvent themselves and prepare to manage the “new normal” we’re experiencing as the business landscape continues to search for effective solutions to address the pandemic.
Below, we present some of the main trends we have identified. See the full report for more information and Tableau dashboards for industry and country specific data.
1. For the sake of their customers, even in times of crisis, companies do not compromise on security
Regardless of their industry or size, businesses around the world have been affected by the COVID-19 pandemic. In a certain way, exactly SMEs were faced with complex challenges. They had to carefully assess where to allocate the few resources available, to ensure that they implemented interventions aimed at maintaining stability and ensuring growth.
Even in a time of crisis like this, customers remain at the center of every company’s attention. SMEs have adopted all the strategies at their disposal to adapt to the new regulations, to properly communicate the adopted interventions to their customers and to maintain a sufficient level of flexibility in the relations with them. Entrepreneurs and managers responsible for SMEs have paid special attention to the implementation of safety policies in compliance with health regulations against Covid-19.
As stated in the report, 69% of medium-sized companies we asked and 61% of small ones have invested a large part of their resources in adopting disinfection and security policies details such as cleaning physical spaces immediately after use by a customer or employee. Less common (although still practiced by a significant number of SMEs) was the choice to invest in contactless services (48%) and to shop online or door-to-door (43%).
Interventions implemented by SMEs to deal with the Covid-19 pandemic
2. Small and medium-sized enterprises face the crisis caused by the pandemic with different solutions
After adapting to the new regulations and implementing the procedures required to deal with the COVID-19 pandemic, many SMEs are barely managing to stay afloat. More than half of those we asked (57%) say they struggle to function in their field. In Italy, the number of companies forced to radically change the way they manage their business corresponds to 59%. The SMEs that have felt the crisis the most are those involved in retail trade, hospitality, travel and transport.
However, although they are often grouped together and spoken of as a whole, land small and medium-sized businesses are dealing with the pandemic differently. Medium-sized companies, compared to small ones, register a 12% higher favorable attitude towards the future. Specifically, SMEs operating in the healthcare, technology and consumer products sectors have particularly positive prospects for the future.
State of operation of the media during the COVID-19 pandemic
From the report, It turns out that demographics, like family income, can also influence business experience. During the COVID-19 pandemic, Businesses led by higher earning managers are more likely to be open and operating at 100%. In contrast, companies with lower-income CEOs are more likely to have experienced closures during the pandemic.
There is an essential difference between these two types of entrepreneurs. Those with lower incomes are likely to see access to capital as a barrier to entrepreneurial activity. Conversely, higher-earning counterparts are likely to hire the right talent at the right time. And if both categories tend to be forward-looking anyway, those with middle/high family incomes are more optimistic about the future of their business.
Medium-sized businesses, which typically have more capital and more employees, are likely to be better able to deal with the new challenges posed by the pandemic, compared to smaller companies. With the exception of the rules to be applied according to the provisions of the local health authorities, to which all SMEs pay the same attention, regardless of the size of the company.
In general, thanks to a larger and often more consolidated customer base, mid-sized companies also need to learn to exploit their pain points. To retain customers and meet their expectations, they must be able to develop a sense of real connection, respond quickly to any question or request and always create a quality product.
3. Do customers always interact in the same way?
These days, it’s harder than ever to meet customer expectations. Now, the main concerns of companies are to comply with new health and safety regulations and to implement contactless services. Implementing these measures is one thing, but letting your customers know their importance is another. So, It is not surprising that 55% of media participating in the exhibition pay more attention to communication. In addition, almost half of them have expanded the channels available to their customers to communicate with them.
The main solution companies are adopting to maintain relationships with their customers is greater use of technology. 65% of profitable SMBs say technology is driving their customer interactions or growing their customer base. In fact, companies manage to meet customers where they feel most comfortable. Indeed, research conducted by Salesforce in July 2020 shows how 63% of millennial consumers and 61% of Gen Z consumers say they are more likely to support small businesses that have a digital presence.
Key challenges faced by SMEs to meet customer expectations
In this moment of crisis, companies are investing heavily in the possibilities offered by technology to face the new challenges posed by the Covid-19 pandemic. There are those who have implemented online shopping and those who have implemented takeaway or home delivery services or those who have preferred to focus on newsletters and social media.
There is also a greater trend towards the adoption of customer relationship management technologies (CRM). In fact, SMEs using CRM software are able to provide better and faster customer service thanks to the significant advantage that technology offers. In Italy alone, 53% of companies already have CRM systems and 27% have implemented one in the last year.
Mid-sized companies, which typically have more resources than smaller ones, are more likely to have revolutionized the way they interact with their customers. In particular, they are more willing to share the strategies they are adopting to deal with the pandemic and there is a greater possibility that they will be able to diversify the way they communicate with their customers across multiple channels.
4. Why relying on technology makes a difference
As we have already mentioned, SMEs are investing more in technology to manage their customer relationships. Many companies are waiting to figure out how and when they can safely return to doing business in person.
The pandemic is also pushing companies that have the opportunity to invest to consider doing so in the technology sector, which could go a long way toward improving their futures. THEIn particular, growing SMEs were forced to accelerate the pace of technology investment due to the pandemic by 65%. These investments are mainly focused on the three areas where technology can really make a difference: customer interaction, workflows and internal communications.
What’s really interesting is that companies want to invest in technology, but they don’t want to increase the number of apps they use to do it, and if possible, they’d like to use even fewer. The average number of apps used by SMBs to run their business has seen a significant decline over the last year.
As of 2019, this decline is accompanied by a 24% increase in the adoption of CRM systems by companies. Customer relationship management software is now used by more than half of the SMEs surveyed. With the same CRM application, you can manage a centralized system for sales, customer service and marketing optimization. The technology (68%), consumer goods (68%) and manufacturing (64%) sectors are the main users of CRM systems.
In line with pre-pandemic trends, the main benefit that CRM software offers, according to users who use it, is still the marked improvement in customer service management. In addition, the unified view of the customer and the ability to integrate with other systems were also noted as strengths.
Discover the solutions companies are adopting to address the challenges posed by the present,
by downloading and reading the report “Small and medium-sized enterprises: the main trends”