SECOND ANNUAL Small & Medium Business Trends Report

SECOND ANNUAL

Small & Medium

Business Trends Report

Research insights from nearly 500 business owners and leaders

Introduction

Welcome to the second annual

¡°Small & Medium Business Trends Report.¡±

They report many challenges in finding, winning, and

3

SMBs Rise Above Growth Challenges

6

Growing Businesses Chart a Course to

keeping customers, especially as their businesses grow.

While tracking customer information is essential, many

Small and medium-sized businesses (SMBs) drive today¡¯s

still rely on email or spreadsheets. When we look at SMBs

innovation and economic growth. They have unique

in the category of ¡°growing businesses,¡± there are more

needs and challenges, which change and evolve as their

than a few common characteristics; they¡¯re more likely to

businesses grow. To better understand and address those

prioritize CRM in their budgets, to use helpdesk software,

challenges, Salesforce Research compiled the second

and to focus on providing consistent and personalized

annual ¡°Small & Medium Business Trends Report.¡± We look

customer experiences.

Find, Win, and Keep Customers

11

Conundrum

16

We also discovered that while many SMBs are automating

processes, on the whole they are spending too much time

In analyzing responses from nearly 500 SMB owners and

inputting data manually. Growing businesses are more

leaders,* we found some interesting differences between

likely to be using or investigating AI, and connecting the

growing businesses (defined as those with a revenue

apps that power their businesses.

To Connect the Customer Experience,

SMBs Explore Automation and AI

at what faster-growing companies are doing differently,

and uncover some of their secrets for success.

SMBs Face a Time-Tech-Training

20

Methodology

increase of 1% or more over the past two years) and their

stagnant/declining counterparts (defined as those with a

We hope you find this research useful as you endeavor to

revenue increase of less than 1% or a decline in revenue

grow your own business.

over the past two years). Comparisons are also made

between small businesses (defined as those with 2¨C49

Sincerely,

employees) and medium-sized businesses (defined as

Marie Rosecrans

those with 50¨C199 employees).

SVP, SMB Marketing

Our research shows that although SMBs rely on

technology to fuel their growth, it isn¡¯t always easy for

them to purchase, implement, or scale it. SMB leaders

want to grow smoothly, but they wear many hats and

don¡¯t always have the time to address long-term needs.

* SMBs represented in this survey include respondents with 2¨C199 employees. See ¡°Methodology¡± for more information on how this survey was conducted.

Salesforce Research

Small & Medium Business Trends Report / 2

01. SMBs Rise Above Growth Challenges

SMBs may aspire to grow into something

more. But as with many things for small

To what extent do you believe the following factors will pose a challenge to

your business¡¯ ability to grow over the next couple of years?

and medium-sized businesses, growth

is often easier said than done. Meeting

customer experience expectations,

Percentage of SMB owners and leaders who say the following factors are

critical, major, or moderate challenges

Small vs.

Medium*

Total

scaling technology, and establishing and

maintaining processes are areas of concern

for SMBs as they plan for growth.

Medium-sized businesses are

1.5x as likely as small

businesses to say

establishing/maintaining

processes (59% vs. 40%) is

a critical, major, or moderate

challenge to their business¡¯

ability to grow over the next

couple of years.*

59%

59%

Maintaining financial growth

48%

Hiring and retaining employees

74%

Meeting customer experience

expectations

43%

55%

42%

Scaling technology for growth

56%

40%

Establishing/maintaining processes

59%

Small businesses

no

difference

59%

1.5x

54%

1.3x

46%

1.3x

45%

1.5x

45%

as likely

as likely

as likely

as likely

Medium-sized businesses

* Difference between small and medium-sized

businesses was calculated using the following:

% medium / % small

Salesforce Research

Small & Medium Business Trends Report / 3

01. SMBs Rise Above Growth Challenges

Simplicity is important to SMBs as they

How important are the following factors when you¡¯re evaluating new technology for your company?

plan for the future. Beyond price, the

most important evaluation criteria for

new tech are ease of use, ease of setup,

Percentage of SMB owners and leaders who say the following factors are extremely, very, or somewhat important

and simplicity of maintenance. Nearly

three-quarters of SMB owners and leaders

Ease of use

95%

(74%) say that scalability is extremely,

very, or somewhat important when

Price

94%

they¡¯re evaluating new technology for

their company. More SMBs choose to

Ease of setup

93%

implement solutions that will meet

their long-term needs (58%) than

Simplicity of maintenance

92%

Speed

92%

to quickly meet their company¡¯s

immediate needs (33%).

Trustworthy vendor

62% of growing businesses

choose solutions to address

their long-term needs.

91%

Compatibility with existing

infrastructure or systems

87%

Mobile capabilities

76%

Scalability

74%

¡°Best in class¡¯¡¯ vendor

73%

Automation capabilities

Artificial intelligence capabilities

Salesforce Research

71%

51%

Small & Medium Business Trends Report / 4

01. SMBs Rise Above Growth Challenges

For many SMBs, investing more budget

into one area may mean taking budget

What are the top three tech budget priorities

for your company? Please select up to three responses.

away from another. When it comes to

prioritization of tech spend, the top of the

list includes productivity software, financial

software, security systems, and CRM

systems. Medium-sized businesses are 1.5x

as likely as small businesses to prioritize

CRM in their tech budget (42% vs. 27%).*

Productivity software

(e.g., Microsoft Office, Google apps)

36%

34%

Security systems

(e.g., firewall, intrusion detection)

34%

31%

Hardware

(e.g., servers, laptops)

29%

Internet hosting/internet service

provider (ISP)

24%

Point of sale/point of purchase

software

20%

Technology services

(e.g., consultants, partners)

18%

Mobility/mobile solutions

17%

Telecommunications/VoIP

Enterprise resource planning (ERP)

Other

* Difference between small and medium-sized

businesses was calculated using the following:

% medium / % small

** Difference between growing and stagnant/

declining SMB businesses was calculated using

the following:

% growing / % stagnant/declining

Salesforce Research

Not sure

1

2

3

39%

Productivity software

Financial software (e.g., accounting,

bookkeeping, bill payment)

Customer relationship management

(CRM) application or system

Among growing SMBs, the

top-reported technology

budget priority is CRM.

Growing SMBs (36%) are

2.2x as likely to prioritize

CRM than stagnant/declining

SMBs (16%).**

Top three tech budget priorities:

small businesses

13%

7%

3%

6%

35%

Financial software

34%

Security systems

Top three tech budget priorities:

medium-sized businesses

1

2

3

Customer relationship

management (CRM)

application or system

42%

32%

Security systems

32%

Technology services

Small & Medium Business Trends Report / 5

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