SMB Forecast: The 2023 Consumer Trends Index

As the number of channels and platforms available to SMB marketers and consumers alike multiply, email remains the most effective medium for driving sales. 52% of survey respondents made a purchase directly as a result of an email they received in the last 12 months, up 4% since 2022.

Consumers are using mobile devices more than ever to make and research purchase decisions. Half of consumers (50%) have browsed for products in a physical store but purchased online, and a quarter (25%) have made a purchase via SMS/MMS, up 4% since 2022.

What SMB marketers can do:

Emphasize your email strategy

Maximizing ROI is critical for SMBs, who are often working with limited budgets and lean teams. Email remains a low-cost, high-value investment that is easy to personalize with the right tech stack. When leveraged as a part of a true omnichannel sales strategy, email holds its own as the most scalable and cost- effective channel.

Email outperforms other channels by significant margins: it is 108% more effective than SMS/MMS and banner ads, 13% more effective than social media posts, and 11% more effective than social media ads.

Examine your mobile strategy

Consumers are using mobile more than ever on various fronts — a lack of mobile presence could be resulting in lost revenue.

SMB marketers can make a brand much more accessible to consumers by checking the boxes of a full mobile stack, including SMS/MMS, email, web, and mobile apps.

Utilize automation to enhance the client experience

SMB marketers have a slew of opportunities to enhance the customer experience via automation. Triggered VIP offers, personalized treats, abandoned cart reminders, alternate options for unavailable inventory, a consistent user-experience online, and other “surprise and delight” email/SMS communications based on customer behavior are all ways to demonstrate cognizance of non-transactional interactions that have taken place, and help build a relationship with the shopper.

Brand loyalty is on the rise, with 59% of consumers prepared to pay more to purchase from their preferred brands. Among those who have left a brand, or become less loyal, an astounding 77% say they can be won back. Loyalty programs are also a common desire of consumers — 67% cite a brand’s loyalty program as either important or critically important in winning lasting loyalty, and 43% say they’re more likely to engage in a loyalty program this year than last.

Brand loyalty is especially important for SMBs as it helps to establish:

• Repeat customers, who help provide a more consistent source of revenue, while alleviating the costs and stressors associated with acquiring new customers
• A competitive advantage, whereby consumers stay loyal to the brand even when other competitors offer better prices or greater convenience
• Word-of-mouth advertising, in cases where loyal customers share positive experiences about — or directly recommend — the brand to others within their network/ community, leading to more customers and improved image/reputation

What SMB marketers can do

Build a loyalty program, or upgrade an existing one

If your brand does not already have a loyalty program, consider creating one. Loyalty programs need not be overly complicated — consumers are quite clear on what they want, citing the following as desirable offerings:

• 85% Discounts on products/services
• 58% Points/rewards
• 29% Exclusive/early access to products/events/services
• 24% Suggested products/services based on the customer’s preferences
• 22% Communications via the customer’s preferred channels

Consumers are clearly looking to loyalty programs to provide financial relief, but incorporating a degree of personalized emotional loyalty shows you value all actions a consumer takes with your brand, not just those that involve purchases.

Meet loyalty desires

Consumers state that the following are either “important” or “critically important” in keeping them loyal to favored brands:

• 81% Range of options/product choice
• 80% Availability online/in-store
• 79% Data privacy policies
• 77% Quality of product or services
• 77% Customer service/support
• 76% Offers and promotions
• 69% Mobile app/website

Consumers are forward in their expectation of personalization, yet common frustrations persist. 49% of consumers have felt frustrations from irrelevant content or offers, and a further 42% from messages that have failed to adequately address wants and needs — both indicators of messaging devoid of personalization.

Favored brands, on the other hand, get personalization right. An overwhelming percentage of consumers associate the following communications with their favorite brands:

• 82% Treats me like an individual
• 82% Rewards me for my loyalty
• 79% Strives to develop a relationship
• 72% Surprises me with rewards I don’t expect
• 69% Make me feel special, like a VIP

What SMB marketers can do

Invest in zero-party data (ZPD)

This is data gathered voluntarily from consumers. Often, it goes beyond pure demographics and includes psychographic data; data that represents an individual’s own personal wants and needs. This data is best attained via “experiences” — think interactives, such as surveys, polls, or quizzes — that probe consumer interests and preferences with the ultimate goal of promoting a feeling of understanding between brand and customer.

Recognize what consumers are willing to share

To create personalized experiences, a brand must learn its customer’s preferences and have a channel to communicate. Fortunately, a sizable majority of consumers are willing to share key data, such as:

• 70% Hobbies/interests
• 66% Age
• 74% Gender
• 64% Email address

With intensifying data privacy laws and the curtailment of third- party tracking cookies on the horizon, it is more important than ever to acknowledge consumer privacy concerns and closely monitor data collection practices.

Consumers want to receive customized content and are willing to share some personal data in return — but they are also conscious of such data and have begun taking steps to protect their online privacy.

What SMB marketers can do

Avoid collecting unnecessary data

Consumers are willing to share a variety of data, but some areas are guarded more cautiously than others. Keep data collection to the scope of what is actually necessary to create personalized experiences, or run the risk of making customers uncomfortable. A notable 73% of consumers do not want to share their photograph, and a further 69% do not want to share their location in real-time.

Work within the confines of a privacy-conscious environment

Developing a strategy now that doesn’t rely on antiquated methods of data collection will help avoid the shock of a post-cookie environment. In the past year, a significant uptick in consumer use of privacy measures has been observed:

• 51% have used privacy mode on a pre-installed browser (55% increase YoY)
• 45% have used an ad-blocker (22% increase YoY)
• 25% have used an alternative privacy-centric search engine (9% increase YoY)

Consumers love brands that are ethical with their data, with an overwhelming 82% citing that their favorite brand uses their data responsibly and a similar 79% stating that data privacy policies are either “important” or “critically important.”

When it comes to the overall online customer experience, every industry — save for betting/gambling — sees “excellent” ratings that exceed 50% and “poor” ratings that are under 15%.

• 82% of consumers cite that their favorite brand uses their data responsibly

What SMB marketers can do

Have transparent and clearly defined data procedures

Ask customers for permission before initiating communications on new platforms. Ensure customers have the ability to “opt-in” or “opt-out” of messages, and if a customer does “opt-in,” provide an explanation for how their data will be used.

Avoid the “creepy” and embrace the “cool”

Consumers overwhelmingly view adverts from unknown companies based on location data and adverts that follow across devices as “creepy” (67% and 61%, respectively). Not all brand interactions are subject to this scrutiny, however. Recommendations from a brand based on past purchases and email reminders about abandoned shopping carts are both seen as “cool” by the majority of consumers (79% and 65%, respectively).

Consumers are deeply concerned about global economic uncertainty, with 60% “very pessimistic” about both the rising cost of living and the economic outlook and a mere 22% “very optimistic” about their own financial situation.

This feeling of uncertainty is clearly demonstrated in consumer behavior, where most are making fewer impulsive purchases (51%), doing more research (51%), waiting for sales (47%), and relying on loyalty benefits (46%) when purchasing from their favorite brands.

• 60% of consumers feel “very pessimistic” about both the rising cost of living and the economic outlook

What SMB marketers can do

Offer mutually beneficial financial incentives

Establishing loyal customers is obviously about more than just offering financially tangible benefits, but these benefits still have a role to play in an economy marred by tightening budgets, inflation, and overall uncertainty. However, instead of offering financial incentives simply to sustain revenue, consider using this as an opportunity to enhance your access to previously mentioned zero-party data. Consumers consider the following to be either “highly valuable” or “somewhat valuable” when it comes to an exchange for personal data:

• 93% Discounts or coupons
• 91% Loyalty points/rewards
• 83% A chance to win something