Magical Thinking: Small Businesses Err On What Consumers Want

Small business owners think they understand their customers. But they clearly don’t, judging by the Small Business Now Report -- a two-part study released Thursday by Constant Contact. 

Take their media preferences. Small businesses say they are using:

  • Social media — 63%
  • Websites — 55%
  • Email — 52% 

But consumers say are most likely to purchases via: 

  • Email — 34% 
  • Text messages — 30% 
  • Social media — 20%  

They also differ on the kinds of emails that are most likely to drive a purchase. Small businesses list these:

  • Check-ins with customers (i.e., “We haven’t heard from you in awhile”) — 30%
  • Business updates (“Come discover our new flavors!”) — 26%
  • Coupons or discounts — 22%



Consumers see things differently. They are most likely to be driven by: 

  • Coupons or discounts — 67%  
  • Check-ins — 33% 
  • Business updates — 26% 

Yet 84% of small businesses are “very or extremely” confident they know what consumers want. 

On another front, here is where small businesses stand on adopting new technologies: 35% are using automation, 34% are using AI, 29% use machine learning and 21% use none of the above.  

But they see the benefits of such tools:

  • Improving customer communications — 34%
  • Building a strong relationship with customers — 32%
  • Saving time on their email campaigns — 30%

(That last item is no small thing: 72% say it takes them from one to four hours to create an email campaign).  

In general, 53% don’t see the business benefit of modern marketing technologies, and 22% believe they are too expensive. 

Still, ecommerce is growing: 58% of small business started selling online for the first time after COVID-19 hit, and 48% are now generating most of their revenue from ecommerce. 

But the survey shows that 60% of shopping is done in stores, and 40% is conducted online.

Of the consumers polled, 86% have bought something online in the past month, and 35% say they will buy elsewhere if there is no online store for what they want. 

Constant Contact surveyed 1,000 small business owners and 1,000 consumers form June 23 to July 2 of this year. 

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