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Small Business imperatives for the digital age Salesforce 2018
Small Business imperatives for the digital age | Salesforce Contents Executive summary 1 1. Changing perspectives 2 1.1 Key objectives of businesses 3 1.2 How can technology assist? 3 1.3 Threats to SMBs 4 2. Finding, winning, keeping 5 2.1 Effectiveness of sales and marketing 6 3. Why invest in digital technology? 7 4. What’s holding you back? 9 5. When is the best time to invest in CRM? 11 5.1 Starting digital 12 5.2 Introducing CRM software later in the journey 12 Appendix A About this study 14 Appendix B Economic Modelling 15 Appendix C Categorising SMB sales and marketing activities 17 Limitation of our work 18 References 18
Small Business imperatives for the digital age | Salesforce
Small business imperatives in the digital age
Top 3 objectives SMBs can take
identified by Australian greater advantage
and New Zealand SMBs of digital tools
49% 78%
Work/life balance could personalise
for owner and staff their marketing content
40% 75%
Growth in sales could make use of
digital tools to acquire
40% new customers
Improving
profit margin
Businesses Businesses with effective
with Customer sales & marketing
Relationship activities increased their
Management (CRM) chance of revenue
software earn growth from
28% 33% to 51%
more revenue than
– an 18 percentage
businesses using
point increase
paper, spreadsheet
or no system
94%
of businesses
that upgrade to a
CRM system
experience benefitsSmall Business imperatives for the digital age | Salesforce
Executive summary
Whether a small-to-medium-sized More generally, Customer Relationship
business (SMB) has just started out or Management (CRM) software enables
been in the family for generations, sales businesses to engage and monitor
and marketing is critical for business their interactions with customers more
success. Effective sales and marketing effectively. Yet only 30% of businesses
are the tools to maintain or grow a SMB’s have CRM software. Our modelling
customer base. Deloitte Access Economics’ of SMBs that have CRM suggests that
modelling suggests that businesses with these SMBs earn 28% more revenue,
effective sales and marketing activities on average, than those businesses using
increased their chance of achieving spreadsheets, paper or no system.
revenue growth over the past 12 months
from about 33% to 51%, representing Importantly, it doesn’t matter whether
an 18-percentage point increase. the CRM system is introduced at the start
of business operations or later. We did
For many SMBs, there are still not find evidence of a difference in
opportunities to improve their sales average revenue between these two
and marketing activities. Two thirds groups. A more important factor is
of businesses report that their sales whether the CRM is used effectively and
and marketing activities enable them to digital tools like CRM system form part of
achieve their business goals, but only the business’ overall growth strategy.
22% of businesses personalise their In fact, 94% of SMBs that have invested
marketing content and only 25% are using in CRM systems experienced some
digital tools to acquire new customers form of benefits.
representing additional avenues for
future business growth. Deloitte Access Economics
30% 28%
Only 30% of ... and these businesses earn
businesses have a CRM system... 28% more revenue on average
1Small Business imperatives for the digital age | Salesforce
1. Changing perspectives
Business objectives are the building blocks Our survey also found that SMBs and their SMBs today
for growth and development. They shape owners change their goals and perspectives
the direction of the business, inform over time. We considered SMBs at the
With about 2.6 million SMBs
strategy and decision making. However, following stages of their journey: in Australia and New Zealand,
these objectives do not necessarily remain
• Younger businesses: less than 3 years these businesses represent an
the same over time.
in operation; important source of economic
Deloitte Access Economics’ 2018 survey • Established businesses: more than output and employment.
of small to medium sized business (SMB) 3 years and up to 10 years in operation; This report explores the
owners found they had a wide range of key and
objectives for their business (see Figure 1.1).
perspectives of Australian and
• Mature businesses: more than 10 years
Maintaining a work/life balance for owners New Zealand SMBs – across
in operation.
and employees is in the top 3 objectives for different industries, years in
the nearly half of all SMBs. This finding is
supported by other research from Suncorp Key finding operation, and with varying
(2017), which found work/life balance Younger businesses are more objectives. The research
interested in growing their sales but
is a key reason for starting a business. considers how differences in
Meanwhile, the relatively small proportion as a business matures, they generally
(3%) of owners who view expanding become more focused in achieving a SMBs affects their decision
overseas as an objective reveals the local work/life balance and refining their making about the use of digital
business processes.
focus of the surveyed SMBs. tools in sales and marketing.
Figure 1.1: Key objectives or measures of success for SMBs
Work/life balance for you and staff 49%
Growth in sales 40%
Improving profit margin 40%
Acquiring new customers 35%
Improving customer satisfaction 31%
Producing goods and services at the highest standard 20%
Consistency of revenue streams 19%
Be my own boss 18%
Building brand awareness and market reach 14%
Higher levels of employee job satisfaction 10%
Provides income to save for retirement 9%
Producing innovative products or services 7%
Expanding overseas 3%
0% 10% 20% 30% 40% 50% 60%
Source: Deloitte Access Economics & Stancombe Research and Planning, 2017
2Small Business imperatives for the digital age | Salesforce
1.1 Key objectives of businesses Table 1.1: Key objectives of SMB owners by length of operation
Businesses of different ages have different
priorities. In the early years of a business,
Rank Younger businesses Established businesses Mature businesses
owners rightly have a key focus on growth
(less than 3 years) (3-10 years) (over 10 years)
in sales. Our survey found that owners of
younger SMBs ranked growth in sales as 1
one of their most important objectives,
with 17% ranking this objective amongst
Growth in sales Work/life balance Work/life balance
their top 3. In comparison, this reason was
only in the top three objectives for 10%
2
of businesses in operation for more than
10 years, far from being one of their top
three objectives overall. Work/life balance Growth in sales Improving profit margin
As businesses mature, the average 3
business owner shifts their focus from
growth in sales to achieving a work/life Improving profit margin Improving profit margin Acquiring new customers
balance, which was the most common
top 3 ranked objective for established and
Source: Deloitte Access Economics & Stancombe Research and Planning, 2017
mature SMB owners. This suggests that
when the business has overcome initial
challenges and proved itself as a viable
1.2 How can technology assist? Digital technology provides SMBs the
operation in the market, business owners
Across all businesses, retaining customers capability to achieve these methods of
may look to maintain, rather than grow,
was the most cited top 3 method to achieve future growth. Strategic use of social
their operations. At this stage, they may
future business growth. While younger media or continuing interactions with past
seek to reduce their hours and direct
businesses were also focused on improving customers can support businesses expand
involvement, potentially delegating
market awareness, the older businesses their market reach. Meanwhile, Customer
responsibility to others in the business.
were looking for more efficient business Relationship Management (CRM) software
Owners of more mature SMBs also place
practices to achieve growth, showing signs can automate interactions with minimal
greater focus on improving profit margins
of more developed processes. manual input from team members.
and acquiring new customers in order to
Chapter 4 explores the benefits of this
replace any attrition in the customer base.
technology in further detail.Small Business imperatives for the digital age | Salesforce
1.3 Threats to SMBs Table 1.2: Methods to achieve growth by length of operation
As the goals of SMBs owners change
over time, so do their perceived threats.
Rank Younger businesses Established businesses Mature businesses
Local competition and changing customer
(less than 3 years) (3-10 years) (over 10 years)
expectations are considered to be key
threats across businesses of different ages. 1
Younger businesses are also more wary of
online competition, with 18% ranking it in
Retaining Retaining Retaining
their top three threats. This perceived threat
your customers your customers your customers
may be a result of younger businesses
emerging in a more digital age, where 2
an increasing number of businesses are
providing products and services from more
Improving Improving Being more efficient
diverse locations. In contrast, only 7% of
market awareness market awareness with business processes
businesses in operation for more than 10
years rated online competition as one of 3
their top three threats.
As a business matures, efficiency and agility Increasing the amount Being more efficient in Increasing the amount
each customer spends your business processes each customer spends
become more important with two of the
biggest threats seen as changing customer
expectations and changing customer tastes.
Source: Deloitte Access Economics & Stancombe Research and Planning, 2017
These threats indicate that the business’
products or service as well as delivery model
and customer service need to be particularly Table 1.3: Threats to SMBs by length of operation
responsive to any emerging customer
trends. For mature businesses, they have
established their good in the market but Rank Younger businesses Established businesses Mature businesses
may be more affected by the (less than 3 years) (3-10 years) (over 10 years)
economic climate.
1
These threats can be perceived or mitigated
through digital technology. For instance, Local competition Local competition Local competition
analysing customer data can pick up on
changing expenditure trends while social 2
media can create a dialogue with customers
so that SMB owners can remain abreast of Online competition Changing customer tastes Economic climate
any qualitative changes in their tastes.
3
Ask the question
How have your key business goals Changing customer Changing customer Changing customer
changed over time? How can digital expectations expectations expectations
sales and marketing help you achieve
these goals? Source: Deloitte Access Economics & Stancombe Research and Planning, 2017
4Small Business imperatives for the digital age | Salesforce
2. Finding, winning, keeping
Digital technology can be a powerful Yet it appears this knowledge is not This percentage is smaller for more
enabling tool for a business to achieve translating to use of the following mature businesses – most likely
their business goals. Our modelling finds marketing activities: indicating limitations of legacy systems
that businesses with effective sales and (such as spreadsheets or paper-based
• Brand awareness on social media.
marketing increased their chance of records of customer interactions). This
With the ease and low cost of social
revenue growth in past 12 months from means many businesses are missing out,
media, it is surprising that less than
33% to 51%, an increase of 18 percentage as personalised messages can provide
30% regularly use social media to target
points (further details regarding the substantial dividends. Research shows
consumers. In New Zealand this rate is
modelling can be found in Appendix B). that in some industries more than 50%
lower than Australian counterparts. For
Yet only two thirds of surveyed businesses of consumers want more personalised
instance, a survey of 1,000 New Zealand
considered themselves to have effective goods and services, and these customers
SMBs found only a quarter have a social
sales and marketing. This suggests there is are willing to pay a 20% premium for this
media presence (MYOB 2014).
room for improvement for many SMBs. personalisation (Deloitte 2017).
• Personalised marketing. While younger
• Measuring Return on Investment
Figure 2.1 shows that nearly half of SMBs businesses are leading the way in terms
(ROI). SMBs are unable to measure
report a detailed knowledge of customers of personalised marketing, less than
the effectiveness of their sales and
(details about the criteria for this specific 40% were able to communicate with
marketing. Only 29% of SMBs can
levels for each category are included in potential customers based on previous
determine the specific ROI on marketing
Appendix C). This knowledge about interactions, purchases or demographics.
investments while 42% don’t know the
customers is a powerful resource for
ROI for their investments or assume that
SMBs – if they have the tools to make
marketing is worth the investment.
use of that knowledge.
Figure 2.1: Proportion of businesses with high levels of sales and marketing activities in selected areas
Knowledge of customers 48%
Brand awareness on social media 29%
Measuring return on investment 29%
Timely forcasts 27%
New customer acquistion methods 25%
Insights and data 24%
Personalised marketing 22%
Use of artificial intelligence 10%
0% 10% 20% 30% 40% 50% 60%
Source: Deloitte Access Economics & Stancombe Research and Planning, 2017
Key finding
SMBs with larger number of employees tend to use more sophisticated tools. For instance, half of medium sized businesses
analyse customer data while only 15% of businesses with less than 5 employees do so. This may reflect a larger pool of talented
employees that medium sized businesses draw on.
5Small Business imperatives for the digital age | Salesforce
2.1 Effectiveness of sales and marketing Figure 2.2 shows that more than half of
An important consideration for SMBs is the SMBs report that their marketing activities Ask the question
effectiveness of their sales and marketing are effective at increasing their sales per One third of surveyed SMBs believed
activities at achieving certain goals. Figure customer (54%) and lowering their costs their sales and marketing were not
2.2 shows that 68% and 59% of businesses (50%). Yet this represents an opportunity effective at achieving their business
believe that their current activities are for many other SMBs to improve the goals. What investments are required
effective at retaining and expanding their capabilities of their sales and marketing to help achieve your key business
customer base. As this is a key source of activities, as our survey found that these objectives?
growth for relatively younger businesses, goals will become more critical as the
this finding suggests many SMBs are able business matures.
to achieve their goals when establishing
their business.
Figure 2.2: Effectiveness of current sales and marketing activities
Are effective at lowering my costs 50%
Are able to increase my sales per customer 54%
Are effective at expanding my customer base 59%
Are effective at retaining my customer base 68%
0% 20% 40% 60% 80% 100%
Disagree Neutral Agree
Source: Deloitte Access Economics & Stancombe Research and Planning, 2017Small Business imperatives for the digital age | Salesforce
3. Why invest in digital technology?
Digital technology can have substantial
benefits which align with a SMB’s key Key finding
business goals. Figure 3.1 shows that nearly Younger small businesses ranked
half of surveyed SMBs find that digital tools finding new customers as the
assist with finding new customers and main benefit of digital technology.
a third find that it can increase revenue. Meanwhile, established and mature
More than a quarter benefit from digital businesses more frequently ranked
technology by meeting customer improving their business’s efficiency
demands or increasing efficiency. or providing a better service or
product as the main benefit of
technology.
Figure 3.1: Benefits of digital technologies
Finding new customers 45%
Increasing revenue 32%
Broader market reach 30%
Meeting customer demands 27%
Doing business 24/7 27%
Improving your business’s efficiency 27%
Reduction in costs 25%
Providing a better service/product 20%
Improving competitiveness 16%
Allowing innovation in business 12%
Improving employee satisfaction and engagement 6%
Reducing reliance on individuals for business intelligence 5%
No benefit/Don’t know 9%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Source: Deloitte Access Economics & Stancombe Research and Planning, 2017
Customer Relationship Management There is a significant financial benefit Yet the majority of SMBs (70%) are still
(CRM) software is one digital technology from using CRM software. Our modelling using basic methods of recording and
used to manage customer interactions suggests businesses using CRM software analysing customer interactions (see Figure
and potential new sales. CRM allows have 28% higher revenue than those using 3.2). Over half of businesses reported using
businesses to record and analyse sales spreadsheets, paper based records or not paper or spreadsheet based systems. Even
and marketing and customer service having a system for recording or analysing more concerning are the 14% of businesses
information, particularly in areas of customer interactions. This analysis reporting having no system to record or
personalised marketing and measuring controls for years in operation, number of analyse customer interactions.
ROI. As such, it can be useful for expanding employees and the industry the business
a business’ customer base and providing was operating within. Further details can
relevant and targeted information be found in Appendix B.
to customers.
7Small Business imperatives for the digital age | Salesforce
Figure 3.2: Systems for recording Other research forecasts that CRM
and analysing customer interactions
software, content related services
and communication software will
play significant roles in driving the
14%
20% total Australian business technology
expenditure of $85 billion in 2018
(Gartner 2017). However, this figure
13% includes the expenditure from all
businesses and if SMBs do not keep
pace, they risk falling behind their
larger counterparts.
Ask the question
17% 36% What are the key benefits of digital
technology for your business? Could
CRM assist in your operations?
Paper based records Spreadsheets
CRM programs accessible from the office
CRM programs accessible from anywhere
No system
Source: Deloitte Access Economics
& Stancombe Research and Planning, 2017
8Small Business imperatives for the digital age | Salesforce
4. What’s holding you back?
With substantial benefits gained This has decreased substantially
from using CRM software and other from last years’ survey, in which 59%
technology it’s important to understand of businesses cited this reason for not
what is preventing businesses using these upgrading. So while SMBs are becoming
tools. Sometimes, it can be SMB owners more aware of the benefits of CRM,
themselves. SMBs still using basic systems a significant number are yet to be
or no system are most likely to report that convinced or feel their business isn’t
their existing system of managing and ready to upgrade yet.
analysing customer interactions is good
enough (as seen in Figure 4.1).
Figure 4.1: Reasons businesses do not use CRM software
39%
Existing system is good enough
59%
31%
Too expensive
27%
22%
Don’t have the time
11%
18%
Lack of skilled persons to operate CRM
10%
16%
Not aware of better option
13%
14%
New technology is overwhelming
11%
12%
Insufficient information about new technology
8%
12%
Hard to transition from or add to existing systems
7%
9%
Other
7%
9%
Not that involved in IT decision making to know
4%
0% 10% 20% 30% 40% 50% 60% 70%
2018 2017
Source: Deloitte Access Economics & Stancombe Research and Planning, 2017
9Small Business imperatives for the digital age | Salesforce
The next biggest limitation for businesses Figure 4.2: Evaluation of upgrade experience
in using CRM is expense, cited by nearly
a third of SMBs. While CRM software costs 6%
more than paper or spreadsheet systems,
the modelling results suggest that the
investment can result in a significant
increase in business revenue.
51% 32%
Yet 94% of businesses that have upgraded
to CRM software report an improvement
from their previous system. This suggests
that the investment in CRM should be
carefully considered by those businesses
sceptical of benefits or wary of the cost of 40%
investing in CRM software (see Figure 4.2).
Ask the question
What is stopping you from investing Still not as valuable as the previous system
in your business? Has this reason Set our foundation for growth in the future
changed over time? Effective and in alignment with our
business strategy
Some challenges but now successfully managed
Source: Deloitte Access Economics &
Stancombe Research and Planning, 2017
10Small Business imperatives for the digital age | Salesforce
5. When is the best time
to invest in CRM?
Should an SMB invest at the start of Other studies suggest that businesses
their business journey or when they benefit more from adopting technology
have a larger customer base or more when it forms a core part of their strategy
financial resources? for expansion rather than using technology
to solve particular issues. For instance,
Our modelling compared those businesses CRM software can be used share important
that introduced CRM software at the start customer information to all employees
of their operations to those that introduced rather than relying on the owner or a few
it later in their journey and did not find key staff members (Ngyuen and Waring
any significant difference in their average 2013). This can be a more important factor
revenue (further details regarding the for successful technological investment
modelling can be found in Appendix B). This rather than when a business decides
means that late adopters have not missed to upgrade.
opportunities presented by upgrading
their systems.
Benefits to early technology adopters
There can still be significant benefits for business from being early adopters of
new technology more generally. For Australian SMBs, research by Deloitte Access
Economics (2017) found that relative to those less digitally engaged, digitally
advanced business were:
• 50% more likely to be growing revenue; and
• Earn 60% more revenue per employee.
In addition, IT services provider Cognizant found in its 2015 report The work ahead:
mastering the digital economy, that the gap between the technological leaders
compared to laggards totalled $692 million in revenue. This is partly because the
longer the business is using technology, the more benefits it receives, which allows
the business to pay for the initial investment and generate more benefits.
11Small Business imperatives for the digital age | Salesforce
5.1 Starting digital 5.2 Introducing CRM
More than one in five businesses that software later in the journey
started off with CRM software did so mainly For businesses that introduced CRM
due to the expectation of future growth in software later in their business journey,
their business (see Figure 5.1). For these over a quarter introduced CRM software
businesses, digital tools are an enabler to manage and analyse existing customer
for growth right from the start. interactions (see Figure 5.2). This suggests
these SMBs wait until the investment
is required. Meanwhile, the SMBs that
invested in CRM software to the build
future capacity to expand was cited by
one in five respondents.
Figure 5.1: Reason businesses chose to start their business with CRM
Expectation of growth 21%
Personal preference for using digital technology 17%
Advice from an external business advisor 17%
Industry requirement 16%
Advice from other business owners, an employees/
16%
manager or family/friends
Strategic reason 12%
Other 1%
0% 5% 10% 15% 20% 25%
Source: Deloitte Access Economics & Stancombe Research and Planning, 2017
Figure 5.2: Reason businesses introduce CRM software during their business journey
The business needed to manage and analyse
27%
customer interactions
To build capacity to expand the business 19%
Strategic reasons 14%
Introduced to keep up with competitors 13%
Advice from an external adviser 12%
Advice from other business owners, an employee/
9%
manager or family/friends
Other 6%
0% 5% 10% 15% 20% 25% 30%
Source: Deloitte Access Economics & Stancombe Research and Planning, 2017
12Small Business imperatives for the digital age | Salesforce
For the immediate factors that facilitated Once these obstacles are overcome,
the upgrade to CRM software there businesses can look to trialling the Ask the question
was almost equal division between technology for later adoption or refining What resources – whether they be
having adequate time, skills and financial to suit the business needs. For those time, skills or financial – would you
resources to invest in the technology (see businesses that did trial the CRM software need to invest in CRM software?
Figure 5.3). This suggests that obstacles or or committed to upgrading their system,
barriers often impede the upgrade to CRM 94% experienced an improvement from
software beyond the perceived benefits. their previous system.
Figure 5.3: Factors facilitating the upgrade to CRM software
The business has the time to invest in
26%
upgrading systems
Owner/staff developedskills to use CRM 25%
The business has financial resources to
24%
invest in upgrading
In response to problem/issue/constraint 16%
Don’t know 5%
Other 5%
0% 5% 10% 15% 20% 25% 30%
Source: Deloitte Access Economics & Stancombe Research and Planning, 2017
13Small Business imperatives for the digital age | Salesforce
Appendix A – About this study
This report explores the diversity of This data collected from
business journeys available and taken the survey provided:
by SMBs in Australia and New Zealand.
• perspectives from SMB
It marks the fourth edition in a regular
owners themselves;
series of reports commissioned by
Salesforce to better understand the • comparisons to previous
context of SMB owners. years’ surveys; and
• data to be used for
In order to produce fresh insights, a econometric modelling.
bespoke survey was fielded by Stancombe.
This report finds that SMB owners face
548 SMBs (defined as having less than
a variety of challenges depending on
100 employees) in Australia and New
their circumstances. Many SMBs are
Zealand responded to the survey. The
realising their current sales and marketing
questions were designed to develop an
capabilities are not sufficient to overcome
understanding of the owners’ experiences
these threats and achieve their business
and motivations when making decisions
goals. A decision not to invest may leave a
about digital investments in their sales
SMB falling behind.
and marketing capabilities.
14Small Business imperatives for the digital age | Salesforce
Appendix B – Economic Modelling
CRM systems and revenue growth Having no system or using a paper or
Econometric modelling was used to spreadsheet based system was used as the
quantify the relationship between SMB base scenario. The coefficient for CRM use
use of CRM software and revenue. The was positive as expected and statistically
model involved creating a binary variable significant at a 1% significance level. Models
to categorise businesses based on their separating CRM software into those
methods for recording and analysing systems accessible only from the business
customer interactions. The binary variable and those accessible anywhere led to
categorised the sample into businesses statistically insignificant variables.
reporting using no system, paper based or
spreadsheet systems; or CRM software. Causality
It is important to note the general issue of
The economic model causality. It is possible that higher levels
Data cleaning was undertaken for the of revenue growth drives more digital
548 SMBs survey responses used for the investment in CRM software if strongly
modelling. This involved removal of those performing SMBs had more time or
who reported not knowing their revenue resources to undertake digital investment
figures and using mid points for revenue rather than vice versa. This effect is
categories when respondents failed mitigated by controls such as employee
to report their exact revenue amount. size and years in operation, yet there is
Removing these observations did not likely to remain some correlation between
significantly affect the reported results. more successful businesses so that the
estimated revenue difference between
The model used controls for: having CRM software or not may be smaller
than estimated. However, our previous
• employee numbers to account
research into SMBs and digital tools
for the size of operation;
suggests that digital engagement through
• years in operation were used as a CRM software does substantially
proxy of business maturity; and boost revenue.
• the industry that the business
operated in.
Both employees and years in operation
controls had positive co-efficients as
expected and were statistically significant.
The log of the current revenue was used as
the dependent variable.
15Small Business imperatives for the digital age | Salesforce
Starting businesses with Probit regression framework
CRM compared to upgrading Probit regression, also called a probit
Further modelling was undertaken to model, is used to model a binary outcome
determine if there was a difference in variable. For example, the outcome of
revenue between starting a business with revenue growth over the previous year
CRM software or if the business upgraded can be categorised as achieving revenue
to CRM software later. This led to a sample growth or declining or no change
of 158 businesses. in revenue.
The model used controls for: Having defined the outcome variable
as binary, we then model the conditional
• employee numbers to account
probability of a “successful” outcome.
for the size of operation;
For the purposes of this report, the
• years in operation were used as outcome variable was revenue growth
a sign of business maturity; and and the predictor variable was the
• the industry that the business effectiveness of sales and
operated in. marketing activities.
A binary variable was used to measure
The controls for the model included:
the effect of when the CRM software
was introduced in the business. Those • employee numbers to account
starting with CRM systems were used as for the size of operation;
the base case. The co-efficient was small • years in operation were used as a sign
and negative, however it was statistically of business maturity; and
insignificant at the 30% level.
• the industry that the business
operated in.
This result suggests there is insufficient
evidence to reject that businesses starting The regression coefficients were evaluated
with CRM have different revenue, on at the means of the predictor variables and
average, than those upgrading their the regression coefficients. The average
CRM system. partial effects was also used to determine
the marginal effects and these were similar
Effective sales and marketing to the estimate at the means.
activity on revenue growth
Modelling was undertaken to determine
if effective sales and marketing would
increase the likelihood of revenue growth.
The evaluation of the businesses’ sales
and marketing activities was self-assessed
which may lead to bias. However, this was
preferred to an objective criteria of current
capabilities as these may not be suitable
for all businesses in various industries.
16Small Business imperatives for the digital age | Salesforce
Appendix C – Categorising SMB
sales and marketing activities
Surveyed SMBs were asked about their current sales and marketing activities. For each
category respondents could select one of three options about their usage. Although
not specifically labelled, these options represented a spectrum of increasing usage and
sophistication for each category that could be designated low, medium high. The specific
criteria for each category are presented in the table below. For each category,
the respondent could also select a “Don’t know/not applicable” option.
Table B.1 Criteria for categorising surveyed SMBs’ current sales and marketing activities
Category High use and/or sophistication Medium use and/or sophistication Low use and/or sophistication
Knowledge of customers Can effectively target customers and Can usually differentiate between Can’t identify which staff member
sales based on previous interactions new and repeat customers had the last interaction with a
customer or prospect
Brand awareness on social media Regularly use social media Occasionally broadcast sales promotions Rarely use social media
to engage customers on social channels
Personalised Marketing Message content based on previous Every communication is personally Communications are sent but it’s too
interactions, purchases or demographics addressed and unique by customer hard to personalise so we keep them
segmentation more general
Measuring Return on Can determine the most effective Confident that marketing is working, Assume that marketing
Investment (ROI) marketing channels and content but difficult to identify which tactics is worth the investment
deliver ROI
Timely Forecasts Accurate visibility into current and Accurate visibility into current and Not confident in accuracy of revenue
/or next month’s revenue within minutes/ /or next month’s revenue within forecast regardless of time spent
hours days/weeks
New Customer Primarily using digital tools to target new Heavy reliance on customer retention Dedicated to face to face customer
Acquisition Methods customers and word of mouth interactions prior to acquisition
Insights and Data Detailed analysis of customer data Some analysis of customer data Not analysing customer data
Use of Artificial Currently use artificial intelligence Trialled use of artificial intelligence Not currently using any artificial
Intelligence in several business functions in one aspect of the business intelligence system in business
(e.g. predictive analytics, automatic operation operations
recommendations for related
products, suggested upgrades
based on previous patterns
of purchase)
17Small Business imperatives for the digital age | Salesforce References Cognizant (2015), The work ahead: mastering the digital economy, available at: https://www.cognizant.com/whitepapers/the-work-ahead-mastering-the-digital- economy-codex2115.pdf. Deloitte (2017), Global powers of Luxury Goods 2017 available at: https://www2. deloitte.com/content/dam/Deloitte/global/Documents/consumer-industrial- products/gx-cip-global-powers-luxury-2017.pdf. Deloitte Access Economics (2017) Connected Small Businesses, available at: https://www2.deloitte.com/au/en/pages/economics/articles/connected-small- businesses-google.html. Gartner (2017) Gartner special reports, available at: https://www.gartner.com/ technology/research/. MIT Sloan and Deloitte (2015), Strategy, not technology, drives digital transformation, available at: https://dupress.deloitte.com/content/dam/dup-us- en/articles/digital-transformation-strategy-digitally-mature/15-MIT-DD-Strategy_ small.pdf. MYOB (2014), The state of the digital nation, available at: https://www.myob. com/content/dam/myob-redesign/nz/docs/MYOB%20NZ%20BUSINESS%20 MONITOR%20SECIAL%20REPORT%202014-SEPT.pdf. Ngyuen, Thuyuen. and Waring, Teresa (2013), The adoption of CRM technology in SMEs: an empirical study, Journal of Small business and enterprise development, Vol 20, no. 4, pp. 824-848. Sensis (2017), Sensis e-business report 2017: the online experience of small and medium enterprises, available at: https://www.sensis.com.au/asset/Reports/ eBusinessreport/Sensis%20eBusiness%20Report%202017.pdf. Suncorp (2017), SME vs me, available at: https://www.suncorp.com.au/about-us/ news/media/business-owners-sme-over-me.html. Limitation of our work General use restriction This report is prepared solely for the use of SFDC Australia. This report is not intended to and should not be used or relied upon by anyone else and we accept no duty of care to any other person or entity. The report has been prepared for the purpose of generating economic insights for Australian and New Zealand SMBs, particularly in terms of digital tool decision making. You should not refer to or use our name or the advice for any other purpose 18
Small Business imperatives for the digital age | Salesforce
Authors
John O’Mahony
Partner
Deloitte Access Economics
+61 2 9322 7877
joomahony@deloitte.com.au
Kathryn Matthews
Partner
Deloitte Access Economics
+61 2 9322 7605
katmatthews@deloitte.com.au
Michelle Mountford
Associate Director
Deloitte Access Economics
+61 2 9322 7146
mmountford@deloitte.com.au
Nick Hull
Senior Analyst
Deloitte Access Economics
+61 2 8620 4222
nhull@deloitte.com.au
19Contact us Deloitte Access Economics ACN: 149 633 116 Level 14, 225 George Street Sydney NSW 2000 Tel: +61 2 9322 7000 Fax: +61 2 9322 7001 Deloitte Access Economics is Australia’s pre-eminent economics advisory practice and a member of Deloitte's global economics group. For more information, please visit our website www.deloitte.com/au/deloitte-access-economics Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte. com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. The entity named herein is a legally separate and independent entity. In providing this document, the author only acts in the named capacity and does not act in any other capacity. Nothing in this document, nor any related attachments or communications or services, have any capacity to bind any other entity under the ‘Deloitte’ network of member firms (including those operating in Australia). About Deloitte Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world- class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte's approximately 244,000 professionals are committed to becoming the standard of excellence. About Deloitte Australia In Australia, the member firm is the Australian partnership of Deloitte Touche Tohmatsu. As one of Australia’s leading professional services firms. Deloitte Touche Tohmatsu and its affiliates provide audit, tax, consulting, and financial advisory services through approximately 7000 people across the country. Focused on the creation of value and growth, and known as an employer of choice for innovative human resources programs, we are dedicated to helping our clients and our people excel. For more information, please visit our web site at www.deloitte.com.au. Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited © 2018 Deloitte Touche Tohmatsu MCBD_HYD_04/18_055755
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