How have UK SMEs improved their digital presence since COVID-19?

In a competitive corporate landscape, businesses need to adapt to survive. Two years after the outbreak of COVID-19, the digitalisation of business processes has shifted to a ‘new digital normal’. How have businesses developed their digital presence, what challenges did they face, and what is still pending?

The COVID-19 pandemic showed that adaptability and agility were important traits for small and midsize enterprises (SMEs). Whether it was needing to shift to remote work capabilities or digitising workflows to ensure business continuity, processes that usually take time to set up often had to be implemented overnight.

Today, businesses have had to change their strategies to focus more on customer relationships, while reviewing their tech stack —and even their staff— to cater to the requirements of digitalisation and improve their digital presence.

Capterra surveyed nearly 300 UK professionals who work at an SME that has adopted a digital strategy before or since the outbreak of COVID-19 and who have not changed companies since August 2020. We wanted to understand how COVID-19 impacted the migration to a digital strategy, what changes their organisation made, and how these changes affected their teams. The full methodology for conducting this study can be found at the bottom of this article. 

One in five businesses did not have a digital strategy before COVID-19

According to our survey, the disruption caused by COVID-19 did not catch the majority of companies who have implemented a digital strategy completely unprepared. Around three-quarters of companies had at least started to carry out a digital strategy in some way. 

A quarter of respondents said their organisation had already implemented a digital strategy before the pandemic and only had to make a few minor changes. For more than half of companies, though, COVID-19 accelerated their digital transformation processes because their initial digital strategies were not sufficient.

That left 23% who did not have a digital strategy in place in 2020 and had to define and implement one because of the pandemic . Regardless of their company’s stage of digitalisation, the majority of respondents found digital transformation to be a challenging process. Nearly two-thirds (64%) of respondents found it extremely or somewhat difficult for their company to implement their digital strategy.

Customer demand is at the forefront of digital strategies

Businesses can have multiple reasons for trying to improve their digital strategies, from boosting stagnant sales, ensuring business continuity, or providing real-time communication channels with clients. We asked survey-takers to select up to three reasons why their company decided to move towards the adoption of a digital strategy. Meeting client demands came out on top for 38% of respondents. 

Our survey also showed that over half (51%) of respondents who did not think they had a well-established digital strategy saw their customer service support tools, including customer relationship management (CRM) and chatbots, as focal points that needed to be improved. 

Using digital tools to manage customer relationships can help integrate and align sales, marketing, and customer service processes to engage with customers across different touchpoints and collect insights. Consequently, reaching out to customers regardless of their location and leveraging data to provide better-personalised services can help SMEs build customer loyalty and brand awareness . 

After looking at the objectives companies had in mind when developing their digital presence, we wanted to know if survey participants considered the implementation of their SME’s digital strategy to have been a success by their own standards.

Rushed digital strategies were less likely to benefit company standing 

Multiple statistics show that between 60 and 70% of digital transformation projects fail. What constitutes failure can be relative to each specific project’s objectives. We wanted to know if our respondents felt their shift to a more digital environment had affected the current standing of their company for the better, if it had made a scarce impact, or if they felt their company would have been in a better position had they not transitioned to a more digital environment. 

The majority (56%) of respondents thought that their company would have been worse off or even not exist today had they not made these changes. 22% of respondents, however, felt that their digital shift hadn’t made any notable impact on the company’s standing. 

A further 22% considered that the company’s standing would have been better had they not switched to a more digital environment. We wanted to dig deeper to learn why some of these digital strategies failed. 

The urgency of reacting to COVID-19 may have affected the success of a digital strategy

We wanted to see if the timing of a company’s digital transformation might have influenced the success of its strategy. Whereas 22% of respondents overall felt their company could have fared better had they not developed a digital strategy, the figures were higher (28%) when we looked just at the results for businesses who did not have a digital strategy in place pre-pandemic and had to define and implement one because of COVID-19.

This number was similar to the overall figure in the case of businesses that had already started to implement a digital strategy before the pandemic but had to accelerate the process because it was not enough (23%). In both these cases, it is possible that dissatisfaction with the impact of digital transformation could be the result of deploying changes in haste and of not incorporating change management in the process.

In contrast, only 13% of businesses that had implemented a digital strategy before COVID-19 started and only had to implement a few minor changes reported that they may have been better off without this strategy. 

COVID-19 changed the tools businesses seek for their digital strategies

A comprehensive digital strategy covers many facets of a business. Some SMEs had already implemented digital initiatives in certain areas before the pandemic, but other aspects were accelerated by COVID-19 or left pending.

Our survey shows, for example, that before the pandemic, over half of the surveyed businesses already had social media strategies (55%) and email marketing strategies (53%). This was closely followed by 47% of businesses having their own e-commerce sites and the same number having a Search Engine Optimisation (SEO) strategy. 

While these may be considered typical digital marketing tools, COVID-19 accelerated the need to deploy tools for other purposes. 

COVID-19 accelerated the deployment of cloud-based solutions and omnichannel strategies

While the more traditional digital marketing tools and social media strategies were still implemented during the pandemic, businesses also turned their attention to new attributes that were required to succeed in this new digital scenario. 

During the pandemic, 39% of businesses invested in cloud software, in addition to the 41% who had already done so before 2020. With cloud software allowing companies to work and store information from multiple locations and devices, this was a necessity now that employees were working remotely. 

Interestingly, the only attribute that increased during the pandemic in comparison to before was the deployment of omnichannel strategies. While 31% of businesses had these strategies in place before COVID-19, the number rose to 37% during the pandemic. A reason for this could be similar to the use of cloud-based solutions but also ties into the need to cater to customer demands. 

The fact that customers and employees were working from home and from numerous devices meant that services had to be available on multiple platforms and devices. More importantly, customers use different platforms and channels to engage with brands, and developing omnichannel capabilities can allow these SMEs to deliver a consistent brand experience regardless of the channel. 

Businesses still need to implement new technologies to boost their digital presence

With so many potential tools and solutions to adopt, some businesses still haven’t implemented strategies that could boost their digital presence. Our survey showed that one in five UK businesses still haven’t implemented traditional digital marketing strategies such as SEO or Search Engine Marketing (SEM). Additionally, while the survey identified satisfying customer requirements as a key driver behind digitalisation, another 20% of companies have yet to incorporate Customer Relationship Management (CRM) solutions in their digital strategic plan. 

Acknowledging the need to shift their focus toward customers is an important step in digital transformation strategies, but companies also need to know how to readjust and adapt their teams to carry out this shift. This may require new employee profiles, as the implementation and execution of these strategies often demand new skill sets. 

New profiles are being sought to implement digital strategies

While over a third (36%) of respondents said their company implemented their digital strategy with existing staff, a combined total of 55% said they recruited new employees (36% hired more people, and 19% hired and fired staff) to carry out the digital migration. According to those who hired staff as part of their strategy, the job profiles listed in the following table were the most recruited.

Businesses have looked to change their marketing approaches by adopting digital marketing strategies with the help of specialists and consultants in the field. At the same time, they have turned their attention to improving their web presence by stocking up on web designers and developers to be able to deploy their digital strategies efficiently. 

Deploying digital strategies is an ongoing process

Many businesses began to deploy digital strategies before COVID-19. However, the pandemic accelerated transformation processes, leading businesses to check what technologies and software they were using and to decide if their staff had the skills to carry out new digital processes. While some companies chose to make staff cuts or recruit for new roles, others opted to implement them using their existing workforce.

Businesses will need to be agile to keep growing in sync with the changes digitalisation brings to the work market. At the same time, they will need to keep their focus on customer habits and customer relationships by deploying technology that meets their needs. In an ever-changing market, this may mean constant evolution.

In the next article in this two-part series, we will look at the effects of investing in digital presence, identifying the most important strategies and exploring how these SMEs fare against big companies after their investments.