A detailed study of digital engagement finds most Australian small businesses are falling short online.
Only 22 per cent of Australian small businesses are benefiting from the growth opportunities of full digital engagement, according to a new report, State of the Nation – 2016, Small Business Digital Engagement in Australia.
This could have particularly dire consequences for start-ups. As the report says: “It is not easy to launch a small business, and it is even harder to sustain it; however, by not taking full advantage of digital engagement, these businesses are severely affecting their survival rate within a highly competitive market …”
The report card
The report, by Australian start-up NetStripes, also found that:
- Only 45% of small businesses have mobile-optimised websites, despite Australia’s high smartphone adoption
- A whopping 78% have poorly designed websites
- Only 18% are engaging with customers on social media
- A substantial 38% don’t have clear service offers on their homepage
- Only 8% use email marketing
- Only 28% are using search engine optimisation (SEO) efficiently, which means that more than 70% are not easily found when potential customers look for the services they offer on Google and other search engines.
Interestingly, South Australia had by far the highest average of digital engagement (37%), followed by Tasmania (29%), ACT (29%), Western Australia (24%), NSW (22%), Queensland (21%), Victoria (16%) and Northern Territory (11%).
The research sampled 1000 small businesses around Australia and across industries, including the medical, legal, professional services, trades and hospitality sectors.
NetStripes is a tech start-up that specialises in helping small businesses use the internet to win more customers, so it could be perceived to have a vested interest in the report’s subject matter. However, in BIT’s experience, any similar sampling of Australian small business digital presences is also likely to be generally unflattering.
In addition, the report makes some compelling arguments. It points to Deloitte Access Economics research that found high digitally engaged small businesses are twice as likely than to be growing revenue.
Dinesh De Silva, CEO and founder of NetStripes, added: “Small businesses that make full use of the Internet grow their businesses by over 20% each year.”
What is a digitally engaged business?
If there's good news to come from the report it’s that it’s not too late for businesses to improve their digital presence and gain a competitive advantage over those that don’t.
The report offers some pointers, defining 16 parameters for full digital engagement in two overall categories:
- Web Index (whether the website is functional and competitive): a mobile-optimised website; functioning homepage (user-friendly and simple to operate); homepage caption that conveys brand essence; design quality (strong, integrated visuals, well written content, consistent use of logo and branding elements); trust signals (awards, accreditations, etc); website speed (fast and easy to load); clear list of service offers; About Us section with photos; testimonials.
- Digital Index (overall digital presence and engagement): a functioning website; mobile-optimised website; active social media engagement on Facebook, LinkedIn and blogs; email marketing/newsletters; regular and consistent updates (15 per month on average); SEO that enabled first page ranking on Google.
If a business fulfilled four parameters or more out of eight on the Digital Index, and five parameters or more out of nine on the Web Index (both categories shared mobile optimisation), it was considered digitally engaged.
Putting one of the parameters into perspective, Mr De Silva said: “More than 50% of all searches are now done via smartphones and increasing, so if a business doesn’t have a website that is mobile-friendly they are losing half of their potential customers.”
The report was particularly surprised by the poor takeup of social and email marketing, pointing out that Australia is fifth in the world for social media penetration and that email newsletters are one of the best and most affordable channels available.
It did not delve into the reasons for the poor results, acknowledging that “more qualitative/ethnographic research is needed to investigate the reasons behind small businesses failing to achieve digital engagement”.