96% of Canada's small business owners say client retention is a top priority for their company, but majority still rely on traditional customer service as main way to engage with current clientele
MARKHAM, ON, Sept. 10, 2012 /CNW/ - In today's highly competitive business climate, fostering client retention has become top of mind for many business owners. While SBOs recognize that the longevity of their company's success hinges on customer loyalty, they still face a number of roadblocks when marketing their products or services.
The quarterly American Express Small Business Monitor reveals that despite SBO's retaining, on average, three quarters (74%) of customers as repeat clients, they are still threatened by the appeal of competitor (25%) offerings around both customer service (18%) and price (13%). According to small business owners, competition (36%) is also their greatest marketing challenge.
SBOs lack an online presence for their brands
The Monitor revealed that 48 per cent of small business owners admit to not having a company website to display their brand and services. Over half (51%) of SBOs report social media tools haven't been effective in building their brand, and 58 per cent continue to say social media is not important to their business.
"It appears there is a growing opportunity for today's SBOs to place more emphasis on engaging online to expand their existing client base over more traditional and costly marketing methods," says Athena Varmazis, Vice President and General Manager, Small Business Services, American Express Canada. "As the digital and social media world continues to evolve rapidly it can be overwhelming to traditional business owners, but it offers a gamut of free tools to expand businesses and reach a new audience."
However, of the small business owners who have embraced social media (29%), 38 per cent cite they found it most effective and nearly one-fifth (19%) say it has the best ROI. LinkedIn (35%) and Facebook (34%) are the leading social media channel for SBOs.
SBOs prioritize sales growth over customer loyalty when measuring marketing success
Next to competition (25%), customer satisfaction (18%) is the single greatest challenge SBOs report in retaining their current customer base. While business owners understand the value of their existing clients and what they mean for the future of their company's success, there is a void in nurturing those relationships. On average, small business owners report 74 per cent of their customers are repeat, yet less than half (40%) offer a loyalty program to incentivize repeat visits.
Almost all SBOs (98%) said exceeding expectations is the best way to ensure repeat business, yet in terms of monitoring client satisfaction, 83 per cent do not conduct regular client feedback surveys.
The majority (82%) of small business owners rely on high quality customer service as their primary way to engage with current clients. This takes precedence over frequent communication (74%) and developing and maintaining personal relationships with clients (65%).
"With SBOs relying almost exclusively on the customer service experience to generate positive word of mouth, they risk falling behind competitors who engage with their customers on a daily basis through social channels," says Varmazis.
Optimism about the financial state of their business has declined amongst SBOs to match 2011 confidence levels
In terms of the quarterly index portion of the survey, the Monitor reveals SBOs are experiencing a dramatic decrease in their business outlook. Fifty-seven per cent say they remain hopeful about their future financial position - down 13 points from last quarter (70%).
Furthermore, there continues to be a decline about future revenue growth, profitability and their overall financial state amongst Canada's small businesses; less than half (46%) of SBOs report their business' current financial position is improving - down 14 points since last quarter. And although over four in five (81%) SBOs remain confident their business will grow over the next six months, this has also declined from last quarter (90%).
"It appears optimism levels have declined to what they were a year ago, leaving SBOs mindful and cautious when it comes to operational decisions," says Varmazis. "Now, more than ever, business owners are carefully planning for the future."
About the American Express Small Business Monitor
From June 29th and July 26th, 2012, Rogers Connect Market Research conducted an online survey on behalf of American Express Small Business Services with a sample of 593 Canadian small business owners each employing between 2 and 100 people. The margin of error for the total sample is +/- 4.0%, 19 times out of 20. In order to ensure the results are representative of the entire population of small business owners in Canada, the data have been statistically weighted for small business by region according to Statistics Canada. Respondents were located across Canada and came from a variety of industries, including health, social services, education, tech, sales and skilled trades. Due to rounding, some results may add to over 100 per cent.
About American Express Small Business Services
American Express Small Business Services (SBS) is dedicated exclusively to the success of small business owners and their companies. SBS supports business owners with exceptional service. We offer tailored products and services that deliver purchasing power, flexibility, control and rewards to help customers run their business. Specifically, business owners can leverage an enhanced set of products, tools, services and savings, including charge and credit cards, robust online account management capabilities and savings on business services from an expanded line-up of partners. To obtain more information about SBS, visit www.amexforbusiness.ca or www.facebook.com/AmexforBusiness.
SOURCE American Express