96% of Canada's small business owners say client retention is a top
priority for their company, but majority still rely on traditional
customer service as main way to engage with current clientele
MARKHAM, ON, Sept. 10, 2012 /CNW/ - In today's highly competitive
business climate, fostering client retention has become top of mind for
many business owners. While SBOs recognize that the longevity of their
company's success hinges on customer loyalty, they still face a number
of roadblocks when marketing their products or services.
The quarterly American Express Small Business Monitor reveals that
despite SBO's retaining, on average, three quarters (74%) of customers
as repeat clients, they are still threatened by the appeal of
competitor (25%) offerings around both customer service (18%) and price
(13%). According to small business owners, competition (36%) is also
their greatest marketing challenge.
SBOs lack an online presence for their brands
The Monitor revealed that 48 per cent of small business owners admit to
not having a company website to display their brand and services. Over
half (51%) of SBOs report social media tools haven't been effective in
building their brand, and 58 per cent continue to say social media is
not important to their business.
"It appears there is a growing opportunity for today's SBOs to place
more emphasis on engaging online to expand their existing client base
over more traditional and costly marketing methods," says Athena
Varmazis, Vice President and General Manager, Small Business Services,
American Express Canada. "As the digital and social media world
continues to evolve rapidly it can be overwhelming to traditional
business owners, but it offers a gamut of free tools to expand
businesses and reach a new audience."
However, of the small business owners who have embraced social media
(29%), 38 per cent cite they found it most effective and nearly
one-fifth (19%) say it has the best ROI. LinkedIn (35%) and Facebook
(34%) are the leading social media channel for SBOs.
SBOs prioritize sales growth over customer loyalty when measuring
Next to competition (25%), customer satisfaction (18%) is the single
greatest challenge SBOs report in retaining their current customer
base. While business owners understand the value of their existing
clients and what they mean for the future of their company's success,
there is a void in nurturing those relationships. On average, small
business owners report 74 per cent of their customers are repeat, yet
less than half (40%) offer a loyalty program to incentivize repeat
Almost all SBOs (98%) said exceeding expectations is the best way to
ensure repeat business, yet in terms of monitoring client satisfaction,
83 per cent do not conduct regular client feedback surveys.
The majority (82%) of small business owners rely on high quality
customer service as their primary way to engage with current clients.
This takes precedence over frequent communication (74%) and developing
and maintaining personal relationships with clients (65%).
"With SBOs relying almost exclusively on the customer service experience
to generate positive word of mouth, they risk falling behind
competitors who engage with their customers on a daily basis through
social channels," says Varmazis.
Optimism about the financial state of their business has declined
amongst SBOs to match 2011 confidence levels
In terms of the quarterly index portion of the survey, the Monitor
reveals SBOs are experiencing a dramatic decrease in their business
outlook. Fifty-seven per cent say they remain hopeful about their
future financial position - down 13 points from last quarter (70%).
Furthermore, there continues to be a decline about future revenue
growth, profitability and their overall financial state amongst
Canada's small businesses; less than half (46%) of SBOs report their
business' current financial position is improving - down 14 points
since last quarter. And although over four in five (81%) SBOs remain
confident their business will grow over the next six months, this has
also declined from last quarter (90%).
"It appears optimism levels have declined to what they were a year ago,
leaving SBOs mindful and cautious when it comes to operational
decisions," says Varmazis. "Now, more than ever, business owners are
carefully planning for the future."
About the American Express Small Business Monitor
From June 29th and July 26th, 2012, Rogers Connect Market Research conducted an online survey on
behalf of American Express Small Business Services with a sample of 593
Canadian small business owners each employing between 2 and 100 people.
The margin of error for the total sample is +/- 4.0%, 19 times out of
20. In order to ensure the results are representative of the entire
population of small business owners in Canada, the data have been
statistically weighted for small business by region according to
Statistics Canada. Respondents were located across Canada and came from
a variety of industries, including health, social services, education,
tech, sales and skilled trades. Due to rounding, some results may add
to over 100 per cent.
About American Express Small Business Services
American Express Small Business Services (SBS) is dedicated exclusively
to the success of small business owners and their companies. SBS
supports business owners with exceptional service. We offer tailored
products and services that deliver purchasing power, flexibility,
control and rewards to help customers run their business. Specifically,
business owners can leverage an enhanced set of products, tools,
services and savings, including charge and credit cards, robust online
account management capabilities and savings on business services from
an expanded line-up of partners. To obtain more information about SBS,
visit www.amexforbusiness.ca or www.facebook.com/AmexforBusiness.
SOURCE: American Express
For further information:
For further information or a full copy of the report, please contact:
Isabella Mise, (416) 644-2293
Christina Peck, (416) 644-2295