Global brands have major muscle to flex when it comes to producing alluring advertising and product packaging, but if their purchase and usage policies aren't flexible they will miss the boat on the lucrative small business customer, according to a study conducted by business-to-small business (B2SB) marketing agency Cargo in partnership with online survey specialist Toluna.
For the past three years, Cargo has conducted its annual survey of U.S. and Canadian small and midsize businesses (SMBs) to help global brands connect with this elusive audience.
This year's U.S. study was conducted online among a representative sample of out-of-home small business owners with 5 to 249 employees.
The U.S. report indicated optimism is on the rise after taking an uncharacteristic plunge in 2013, as 71 percent of U.S. small business owners said they are now confident about the future of their business, a 6 percent increase over last year.
Stronger still, 77 percent are projecting growth, an 11 percent increase over 2013. The majority of SMBs (54 percent) said marketers get their attention by showing them how they can help their business grow.
Ten percent more SMBs this year over last year said brands are marketing to them effectively (67 percent versus 57 percent).
When asked how their favorite marketing campaign aimed at small business owners makes them feel, the highest number of respondents (33.3 percent) said "motivated" followed by "understood" (30.6 percent), "supported" (30 percent), "confident" (22.6 percent), and "appreciated" (19.3 percent).
"We always say that to win the mind of the small business owner you must first win their heart," Dan Gliatta, managing director of Cargo, said in a statement. "This year's study confirms this mantra but goes one step further by showing how to win their heart."
Where to reach small businesses with relevant messaging is also uncovered in the study. While the top two information sources—industry peers and trade publications—fall on the traditional side of communications tools, new media sources such as apps are on the rise.
For example, the report found 71 percent of small business owners use business apps on a daily basis, a 10 percent increase over last year's study.
"Small businesses can be one of the most loyal customer groups a brand will ever know," Gliatta continued. "But their driven nature means brand marketers must stay on their toes. The opportunity to take business from a 'sleeping' brand is tremendous."
Along with the small business rebound in optimism comes a propensity to switch brands if they believe they're not receiving adequate customer service or if they're not understood, survey results indicated.
These are two of the top reasons SMBs make a decision to switch brands (47 and 40 percent, respectively), and they are willing to do plenty of research to find a replacement. Ninety percent will shop for three or more brands when seeking a new provider, and 72 percent make the decision within one month.