What small businesses are doing to improve their connection with customers

How are small businesses preparing for tomorrow? To find out, we asked hundreds of small business owners, managers, and decision-makers for insights into how they navigate the ebbs and flows of today's market, manage the ever-changing needs of consumers, and leverage technology to thrive.

The 2023 Verizon Business State of Small Business Survey reveals that small businesses are cautiously optimistic for the future. In our recent look forward for 2024, we explored what small businesses had to say about navigating artificial intelligence (AI), reducing financial strain, and more. But there's one topic in particular that can critically impact small business success—connecting with your customers.

Communicating with existing and potential customers is critical to business success. This can be seen in the priorities of small business owners. About half (48%) are very or somewhat concerned about creating new relationships, while a similar amount (45%) feel the same way about maintaining existing relationships.¹

In response, small businesses have turned to technology to help. Improving their connection with existing and new customers was the second and third most cited reason to add or upgrade their tech stack in the past year, behind only making operations more efficient.²

Wanting to improve your connectivity is one thing, it's another thing to know where and how to invest. For many small businesses the answer last year for where to add or upgrade their tech stack was the internet.³

In particular, key priorities were having internet with strong bandwidth to facilitate high-capacity activities (53%) and high-speeds (51%).⁴ Other related areas of investment included routers or extenders to boost wireless signals (47%), website hosting services (38%) and web/video conferencing tools (40%).⁵

Small business owners were not only concerned about online communication. They also invested in communication tools, with 42% adding or upgrading employee devices to enhance connectivity.⁶ About a third (34%) of small businesses invested in services to integrate desktop and mobile phone lines.⁷

Lastly, it is important not to forget the infrastructure that underpins connectivity. More than two-fifths (41%) invested in communications and networking hardware.⁸

Today's customers want to be able to connect with businesses in a variety of ways. This approach, of providing multiple formats to communicate with a customer, is known as adopting an omnichannel strategy. 

For small businesses, one of the ways to benefit from an omnichannel marketing strategy is to increase their focus on social media and digital marketing. A majority (56%) of owners expanded their use of social media to increase engagement and online traffic, while 41% implemented new digital marketing technologies to better target the right audiences.⁹

Interest in learning more about social media and digital marketing remains high among small business owners. When asked what resources would be most helpful for the upcoming year, 69% said access to free social media marketing courses, while 61% wanted to speak with e-commerce experts to help them establish a digital presence, digital branding, or social media engagement.¹⁰

Another interesting development in this area, is the use of AI. While only 14% of small businesses currently use AI solutions according to the survey,¹¹ marketing and media was the leading use case (14%).¹² On top of this, more than a third (36%) would consider using AI in their social media and digital marketing operations.¹³

With a wide range of communication channels open to consumers, it can be hard for small businesses to know what exact ones to use. While each company has a unique situation that will impact what platforms to use, the survey offers insights into how other small businesses are using social media to connect with customers. The most popular social media platforms in the survey were:¹⁴

• Facebook (80% of small businesses used this platform)
• Instagram (59%)
• LinkedIn (49%)
• X, formerly known as Twitter (40%)
• TikTok (35%)
• Threads (28%)

While investment is largely directed toward digital communication, small businesses have shown they have not forgotten the benefits of in-person communication. A majority (59%) said they strongly or somewhat agree their business is developing or implementing strategies to drive customers back to face-to-face interactions.¹⁵

For small businesses with brick-and-mortar locations, the in-store experience still plays a key role in an omnichannel strategy. Combining the positives of digital and in-person experiences can help SMBs in their efforts to enhance their connection with customers.