Heavy Web Use Seen Correlating With Sales Growth for SMBs

bcg-smb-web-use-sales-growth-march2012.jpgSMBs that use a wide range of internet tools to market, sell, and support customers, interact with suppliers, and empower employees (high-Web) appear to enjoy faster sales growth than those who either just have a website or social networking site (low-Web), or do not have a website at all (no-Web), according to survey results released in March 2012 by the Boston Consulting Group. High-web SMBs in the US experienced 10% growth in historical 3-year sales, compared to a decline in sales growth of 5% among low-Web and no-Web SMBs. Similar, if not even larger discrepancies in historical 3-year sales growth between high-Web and low- or no-Web SMBs were found in China (25% vs. 9%), Turkey (17% vs. -5%), and Germany (18% vs. 4%).

Within the US, high- and medium-web (those that sell goods or services online) SMBs expect to grow by 17% over the next 3 years, compared to 12% for low- and no-Web companies.

One-Quarter of US Ad Budgets Spent Online

Meanwhile, US SMBs appear to be making good use of digital media, per a February 2012 report from BIA/Kelsey. 87% of survey respondents in Q4 2011 said they used digital media, down slightly from 90% in Q4 2010, but representing a 7.4% increase from 81% in Q4 2009. And these respondents appear to be finding value in their online media use, allocating 24.3% of their total ad budget to online channels, and an estimated 26% over the next 12 months.

Overall, SMBs used 4.4 different media types in Q4 2011, relatively unchanged from a year earlier (4.6), but up from 3.1 in Q4 2009.

Many Opt for Self-Service

SMBs seem confident in their abilities to purchase online advertising directly on the internet: 63% expressed a willingness to do so, compared to 22.3% who were not willing, and 14.7% who were unsure. Among the channels used to purchase online advertising, self (without a live operator) was most common, at 36.1%, followed by a Yellow Pages salesperson (23.5%), self (with a live operator – 16.4%), a newspaper salesperson (12.6%), an agency, and a radio salesperson (both at 8%).

Other Findings:

  • 52% of BIA/Kelsey survey respondents reported using social media to promote their businesses, and 22% planned to have a YouTube video up in the next year. Data from a Constant Contact survey released in February indicates that almost 40% of UK SMBs are using social media for marketing purposes, with 79% of those planning to increase their use of the channel in the next year.
  • The Constant Contact survey respondents said that leading benefits of social media included the ability to generate word of mouth and referrals (48%), its cost effectiveness (47%), it being a good way to communicate with existing and prospective customers (45%), and its helping their businesses succeed (45%). According to a March 2012 report from Payvment, small businesses selling on Facebook are most happy with the ability to promote products via social marketing (61%), customers not having to leave Facebook to buy (60%), and the ease of setting up and maintaining a storefront (50%).

About the Data: The BCG data is based on a survey of approximately 4,700 SMBs. The BIA/Kelsey results are based on a survey of roughly 300 SMBs. The Constant Contact survey was conducted in October 2011 by Chadwick Martin Bailey via an online forum launched in the UK. A total of 680 respondents participated in the study. The Payvment results are based on a survey of 750 users of its Facebook commerce platform across 12 countries. The survey was fielded online between February 15 and February 28, 2012.