--- description: After optimising their digital investment during COVID-19, how did UK SMEs fare against big companies and are they willing to continue investing in innovation? image: https://gdm-localsites-assets-gfprod.imgix.net/images/capterra/og_logo-e5a8c001ed0bd1bb922639230fcea71a.png?auto=format%2Cenhance%2Ccompress title: Have UK SMEs benefited from digital investment strategies? --- # Are UK SMEs still investing in digital strategies after COVID-19? Canonical: https://www.capterra.co.uk/blog/3144/digital-investment-strategies-uk-smes Published on 06/10/2022 | Written by Eduardo Garcia. ![Are UK SMEs still investing in digital strategies after COVID-19?](https://images.ctfassets.net/63bmaubptoky/ZfgYDVk4Yr79bRUY60gM6sx4CgbxvHNs2RTmP_RG73Q/67cae60ad81886339fc4f3ffd90fd54c/SMEs-and-digital-investment-UK-Capterra-Header.png) > Many SMEs have accelerated the implementation of their digital strategies due to the pandemic. Today, businesses have reached a point where they can evaluate the results of their plans to determine whether their digital transformation has improved their competitive edge and if they should keep investing in innovation and technology. Did UK SMEs reap the desired results, and how do they fare against bigger companies?  ----- ## Article Content Many SMEs have accelerated the implementation of their digital strategies due to the pandemic. Today, businesses have reached a point where they can evaluate the results of their plans to determine whether their digital transformation has improved their competitive edge and if they should keep investing in innovation and technology. Did UK SMEs reap the desired results, and how do they fare against bigger companies? In this articleWill SMEs continue their investments in digital strategies?What digital strategies are most important to UK SMEs?What are the top benefits of digital strategies for SMEs?How have digital strategies affected competitiveness between SMEs and big businesses?The COVID-19 pandemic saw SMEs step up their digital investments to develop strategies that incorporated digital transformation technologies and helped their business remain competitive. Two years after the pandemic kicked in, are SMEs still set on investing in innovation, what are the most important elements of their digital strategies, and do they feel these changes have allowed them to better compete with bigger companies?Capterra surveyed 297 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. After analysing how businesses accelerated their digital investments and strategies, and the changes the deployment of these entailed, in this second instalment of our report on digital presence we look at how respondents feel about the results of their efforts. The full methodology for conducting the study can be found at the bottom of this article.  Will SMEs continue their investments in digital strategies?Digital transformations are ongoing processes. The need to persistently evolve to adapt to new trends and respond to new customer habits requires consistent investment and dedication to digital strategies. While businesses have invested in developing their digital presence to adjust to the changes brought upon by the COVID-19 pandemic, our survey shows that most UK SMEs will maintain (46%) or increase (50%) these investments for at least the next two years. SMEs investing more in digital transformation feel confident about their current strategy We wanted to understand why half of the SME professionals surveyed said their company would increase investment in digital strategies. 55% of these respondents indicated that their current strategy was working well and that more investment would mean more revenue. A further 40% of those planning to increase expenditure were still working on setting up their strategy and thought that more investment was required until it was fully implemented. Only 2% of SMEs are planning an alternative to their digital strategyFewer than 5% of survey-takers said their company would decrease their budget in digital strategy and, of these, half said they were planning an alternative strategy. Overall, it seems that even if carrying out a successful digital transformation strategy can be challenging, a minority seek other alternatives, and most companies are determined to carry on with their investments. What digital strategies are most important to UK SMEs?Even though COVID-19 may have accelerated the deployment of digital strategies for UK SMEs, businesses give importance to some strategies over others. The following chart shows the top five strategies that were somewhat or very important to our survey respondents.For 91% of businesses, email marketing is an important element of their digital strategies. In business environments where lead generation is an essential return on investment (ROI) element, email marketing can help SMEs increase their customer base while raising brand awareness and generating online traffic to their eCommerce site. It is little surprise then that 87% indicate the importance of developing an eCommerce site. For those potential customers that cannot be reached by email marketing, there are other alternatives. 85% of businesses value online reviews as an important digital market strategy. Data collection and cloud software are highly valued by UK SMEsFor 90% of UK businesses, data collection is an important element of digital strategies. Online interactions generate multiple datasets, and the usage of this data can help shape business models and formulate customer-centric approaches to digital transformation. Businesses can use data to make decisions based on quantitative insights. How can data be used to help your company?Secure buy-in from stakeholders: decisions and projects can be backed by statistics to justify investments and establish measurable key performance indicators (KPIs) to monitor ROIs Understand customer behaviour: by observing how a customer interacts with a website or service, businesses can analyse revenue, attrition, and retention trends while also using predictive analytics to identify new opportunitiesOptimise employee productivity: data from employee monitoring software can also be used to help staff work more efficientlyImprove fraud detection strategies: businesses can leverage data from fraud management systems to analyse where weak points have been detected and protect themselvesAdditionally, with more employees working remotely since the COVID-19 pandemic, the use of distant computers hosted online enables the use of cloud services. For 86% of UK SMEs, cloud services are an important element in their digital strategies. These services, for example, can allow the storage of and access to information online while facilitating the protection of sensitive data.Chatbots have yet to make a big impact on digital strategiesOur survey shows that SMEs consider some features to be more important than others. Eight out of ten respondents see search engine optimisation (SEO) and search engine marketing (SEM) as important elements of their company’s digital strategies, and 78% of respondents say their company values the importance of omnichannel capabilities. While these numbers are high, they are not considered by survey-takers to be the most important strategies. Fewer businesses (68%) see chatbots as an important feature to deploy. Even though chatbots and conversational AI can help customer service or HR teams answer requests, it is not one of the most important elements for companies. 16% of respondents say their organisation had yet to leverage this strategy. While social media marketing is important for UK SMEs, influencers are notOne of the benefits of implementing digital strategies is that businesses can reach out to customers and potential clients on multiple channels. While the majority of UK SMEs value email marketing, 83% also see social media marketing campaigns as either somewhat important (33%) or very important (50%). However, when carrying out their social media campaigns, it appears that influencer marketing is not an essential feature for these businesses. 58% of respondents saw influencer marketing as an important digital strategy, but it was also the strategy that received the highest rating for being not at all important (31%). What are the top benefits of digital strategies for SMEs?Digital strategies can help businesses achieve a range of objectives. We asked our survey-takers to select up to three ways their organisation had benefitted from the digital strategies they deployed. The following infographic shows the top five answers given by our respondents.These results suggest businesses are looking for better ways to reach out to current and potential clients. Finding different channels to reach out to people can provide new sales opportunities as well, along with allowing companies to bring services to new destinations online. When accompanied by proficient customer service, digital brand strategy, and steady website traffic, businesses can leverage digital strategies to connect with a broader customer base. How have digital strategies affected competitiveness between SMEs and big businesses?Digital transformation may be challenging for smaller businesses that have more restraints than larger enterprises. With a report by the Organisation for Economic Co-operation and Development (OECD) showing that digital adoption gaps have grown for SMEs when compared to larger firms, there can be an increased risk of inequalities between companies that must adapt to this highly competitive market. However, COVID-19 meant that all businesses had to move their operations online and intensify the deployment of digital strategies. SMEs have had to compete to access finance for digital investment, develop infrastructure for digital transformation, and hire or develop the right talent to drive these changes. When it comes to finding talent, most SMEs have acknowledged the need to find specialists or train staff to acquire skills that can help lead this digital transformation. The majority of companies have an in-house professional in charge of their digital strategy. However, one in five businesses has decided to relay the responsibility of handling digital strategies to employees who are not trained in the field. 15% of SMEs see the existence of big companies as beneficial to their company In our previous article, we saw that around a quarter (26%) of respondents said their company adopted a digital strategy to keep up with competitors. More than a third (36%) of SMEs feel they are in competition with big companies in the industry, while 49% are indifferent to what these companies are doing. Interestingly, 15% of SMEs actually feel that the existence of big companies in their industry is beneficial to their business. The reason for this? From this group of businesses, 42% leverage what big companies are doing to learn by observing how they work. Another 39% of these SMEs appreciate that bigger companies drive growth in the market at an overall level and that this ultimately benefits them.SMEs feel that big companies are more favoured in the digital ageCOVID-19 disrupted business continuity for all types of businesses. With SMEs intensifying their use of digital technologies alongside larger companies, did this serve to level the playing field in the market? Not according to nearly three-quarters (72%) of our survey respondents, who somewhat or strongly agreed with the statement that ‘Big companies are more favoured than SMEs in the digital age.’SMEs that still feel at a disadvantage when it comes to competing with big companies in the digital arena should try to develop strategies to cover any gaps between larger enterprises that may boast, for example, bigger budgets and resources to explore new technologies and acquire talent. How can SMEs compete with big companies in the digital age?Here are some tips to help SMEs get on equal footing with big companies:Deliver excellent customer service: customer satisfaction can be a brand differentiator. If SMEs provide exceptional, personalised customer service, it can convince customers to turn to these businesses instead of bigger, less personal enterprises. Listen to your customers: large organisations may find it harder to listen to customers and make decisions directly based on their feedback. Smaller companies can act promptly with feedback from a targeted audience. This feedback can come from review sites, surveys, or polls from customer services.Strengthen your digital presence: select and manage the proper channels for your business, implement professional and attractive design ideas, and work on your digital customer experience strategy and engagement methods.Leverage data: apps and software provide SMEs with access to similar data that bigger corporations handle, along with customer insights to help them improve their services. This can enable them to make data-driven, proactive decisions.Attract, develop, and retain the best talent: HR teams should focus on improving and promoting the company culture to attract talent to their business. Training staff to develop their skills and engaging with them to maintain employee buy-in can help when it comes to providing high-quality services. Some SMEs see competition from big companies as a driver of business growth Despite the competition to find talent and resources or to simply compete against bigger companies in the market, some SMEs are set on looking at the glass half full when it comes to assessing this competitiveness. When asking survey respondents who said their company competes against bigger businesses how they felt about this competition, 56% of these respondents considered that trying to keep up with big companies helps drive their business growth. A further 27% are aware that while this competition can be harmful in some ways, it can also benefit them. It serves to show the disparity in perceptions between businesses when it comes to their approach to handling competition from big companies.Overall, businesses should pay attention to what their competitors are doing right and take note of the strategies that are proving successful. This allows SMEs to identify challenges and opportunities and to pursue similar paths and strategies within the scope of their own resources and objectives.Looking for strategic planning software? Check out our catalogue. ## Disclaimer > Methodology: To collect this data, Capterra interviewed 297 professionals in August 2022. The surveyed candidates had to fulfil the following criteria: UK residentBetween the ages of 18 and 65 Employed full- or part-time in a mid-level or higher role at a company that had been founded before the COVID-19 pandemic and with 2 to 250 employeesEmployed at a company that has adopted a digital strategy either before or since the outbreak of COVID-19Have not changed jobs between August 2020 and August 2022Have knowledge of their company’s business model and the design and implementation of digital strategies in the organisation ## About the author ### Eduardo Garcia Eduardo is a Content Analyst for the UK. Providing research and digital tech tips for SMBs. MA in Journalism and in Diplomatic Studies. Animal loving, sea revering, Mancunian. ## Related Categories - [Construction CRM Software](https://www.capterra.co.uk/directory/30657/construction-crm/software) - [CRM Software](https://www.capterra.co.uk/directory/2/customer-relationship-management/software) - [Financial CRM Software](https://www.capterra.co.uk/directory/30562/financial-crm/software) - [Lead Management Software](https://www.capterra.co.uk/directory/30017/lead-management/software) - [Online CRM Software](https://www.capterra.co.uk/directory/30072/online-crm/software) ## Related Articles - [Generative AI: UK employees say it improves innovation and analysis but more regulation is needed](https://www.capterra.co.uk/blog/4135/generative-ai-in-the-UK-workplace) - [Recruiting in the job-hopping era: Challenges and opportunities](https://www.capterra.co.uk/blog/2718/job-hopping-recruitment-pros-and-cons) - [Women in tech: 11 inspirational stories](https://www.capterra.co.uk/blog/1092/women-in-tech-11-inspirational-stories) - [AI in Finance: Applications & benefits](https://www.capterra.co.uk/blog/1945/3-applications-of-finance-ai) - [5 ways builders use software for construction planning](https://www.capterra.co.uk/blog/3286/how-builders-use-software-for-construction-planning) ## Links - [View on Capterra](https://www.capterra.co.uk/blog/3144/digital-investment-strategies-uk-smes) - [Blog](https://www.capterra.co.uk/blog) - [Home](https://www.capterra.co.uk/) ----- ## Structured Data