It makes sense that the digitally-savvy small businesses have a more diverse customer base, which means they can grow faster, have a greater capability for product innovation, and generate new streams of revenue by offering products and services to international markets.
The major challenge is that 80% of small businesses in the U.S. do not fully use digital tools to further growth, yet many have expanded internationally as a result of the Web and are three times as likely to have exported a product or service in the past year, according to recent data from a study commissioned by Google.
The findings from Deloitte Connected Small Businesses US Research analyzes the economic impact drivers of more than 2,000 small business owners with fewer than 250 employees to help marketers better understand and quantify the impact of the Web on their companies. The economic drivers include revenue growth, job creation, exports, innovation, and business drivers along the purchase path such as in-store traffic, service inquiries, orders and customers.
The findings show that small businesses in the United States are using a variety of online channels, but most do not fully take advantage of what the Web offers. Deloitte revealed potential benefits from using sophisticated tools, but the difference in performance between basic and advanced was significant.Those using basic tools include those who have an email address, but no business Web site or social media page. Those with digital skills represent 20% of the sample, with more than 90% of these small businesses that do not have a Web site and 85% with no social media presence. Almost none engaged in online forms of marketing such as ad banners or search-related advertising.
Advanced businesses represented 20% of the small business sample. Within the advanced category, 81% of small businesses collect data about visitors to their Web site, with the majority of these using this data to analyze customer trends and inform business decision making. About 27% of advanced businesses have a mobile app, which is significantly higher than the average of 3% across the other levels of digital engagement.
Small businesses make a significant contribution to the U.S. economy and the more technology they use, the higher the benefits and growth.
Small businesses were found to experience an increase in revenue growth of 11% per additional engagement level reached. Compared to the 20% of small businesses with the most basic level of digital engagement, the top 20% most digitally advanced U.S. small businesses earned two times as much revenue per employee, revenue growth four times as high compared with the previous year, and were nearly three times more likely to create jobs, and have an employment growth rate about six times as high.
The report also examined a variety of digital tools that are used by small businesses in the U.S., such as the use of ad banners on Web sites or social media, to search engine marketing and optimization strategies.