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Constrained Local Retail Digital Marketing Dollars Squeeze Ability To Seek Tech Help

About 86 percent of small businesses narrow their preferred list of digital marketing vendors to just four, says a report by GO Digital and Entrepreneur magazine.

Smallbiztechnology's Ramon RayThe average small business has just 4 percent of its staff working on marketing-related roles, indicating that spending of both time and money are in shorter supply just as decisions affecting digital outreach to consumers is becoming more costly, according to a report by GO Digital and Entrepreneur magazine.

The study, Crossing the Digital Divide (registration required), examines the education gap between local retailers and the tech vendors who are competing with services for content marketing, app development, online advertising, search engine optimization, in-store Point-of-Sale solutions, social media, and Digital Presence Management.

Addressing Omnichannel Challenges

While all those service categories address a particular omnichannel pain point that retailers know they need to address, the budgeting afforded by small businesses remains as attenuated as ever, the study found.

Based on 591 total responses from a random list of small to medium-sized businesses between November 2014 and this past February, 86 percent of small businesses representing retail, medical, home services, apartments and legal services, say they’ve narrowed their preferred list of digital marketing vendors to an average of four tech service providers.

At the same time, 78 percent of the SMB respondents say that digital marketing accounts for only 5 percent of their annual revenue.

“Taken together, these results paint a somewhat surprising portrait of small businesses,” the study says. “Contrary to what some might assume, not all small businesses are ‘weak’ in strength and struggling to generate revenue. Rather, they have a unique set of advantages, which makes it that much more important to find the right digital marketing provider — one whose approach is holistic, goes beyond a singular campaign and is founded in a test-and-learn methodology.”

Education Is A Differentiator

At a time when tech service companies are falling over each other trying to carve out a clear point of differentiation against their rivals in the local digital marketplace, the study suggests that these companies would do better looking outside themselves instead of within.

For example, more than one-fourth (27 percent) of the respondents believe it’s more important for a potential vendor to understand their organizational needs/goals than it is to deliver on commitments (18 percent) and meet designated timeframes (5 percent).

On a practical level, retailers will spend money on education, particularly when it comes to seemingly sudden changes that could affect a business’s ability to be found and discovered by customers online, as evidenced in the bewilderment that accompanied Google’s recent mobile search algorithm update.

Ultimately, it all comes down to tech vendors operating in the local space clearly showing “proof of value” to small businesses, says one of the report’s interview subjects, Ramon Ray, who serves as an SMB tech evangelist at Smallbiztechnology.

“A provider needs to demonstrate that their solutions fit your industry and your business,” Ray says. “The solutions need to be easy to implement and use. It should be solid, mature, and as ‘bug-free’ as possible. It needs to demonstrate solid, post-sale customer support. One good way to gauge proof of value is whether a provider offers testimonials or case studies. And, most importantly, they should be able to show how their benefits translate into revenues.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.