Why the AI-marketed small business is not only within reach but also a no-brainer.
Small businesses are attuned to the buzz around artificial intelligence, and some are looking at it more intently than others.
We recently surveyed small businesses and their customers and found that 26 per cent of all small businesses are already investing in AI and/or automation technology – and another 44 per cent would like to start. Larger small businesses are more likely to be using AI right now; 40 per cent of SMEs with more than 50 employees say they are using AI, compared with 30 per cent of those with 10 to 50 employees and 12 per cent with one to nine employees.
But it’s this last cohort I want to focus on. While it’s encouraging that 12 per cent of businesses this size have adopted tools that are powered by AI, a full 88 per cent are yet to do so. And ironically, it’s these businesses that could benefit from AI the most.
Picture the traditional Aussie corner store, the florist, the small plumbing business with just a few employees, the market stall owner with a line of homemade organic cosmetics. These businesses are often fledgling, with owners whose expertise rests in one area – their product or service. They don’t have any formal marketing training, so they often don’t know how to get the word out about their business so they can grow.
“AI can help segment contacts, explain customer behaviour, and identify trends in engagement.”
What small business can really afford a dedicated marketing function? To the average small business owner in this cohort, it’s simply not feasible, and they are left to rely on themselves to be the CEO, CFO and CMO all at the same time. Of course, this comes in addition to fulfilling orders, managing staff, greeting customers, and other daily tasks required to operate their business.
This is where AI can work its magic. AI content generators are a prime example of the everyday usefulness of generative AI, which can accelerate the creative process with minor prompts. Something as simple as, “write me a creative email campaign about a 40 per cent sale for Christmas” will generate high-quality content. It’s a solid starting point for those who simply need to get going, so they can get back to doing what they do best – running their business.
For the growth-minded small-business owner who wants to take their marketing up a notch with AI, they can. Additional AI-driven marketing tools are built specifically for small businesses, and they are affordable for the sole trader selling flowers at the farmer’s markets and the bustling corner bakery alike. Some can even create entire email campaigns including copy and images, or complementary SMS campaigns and social posts with images. Furthermore, as SMEs spend more time with these tools, the technology learns what their customers are most likely to engage with and provides better recommendations that lead to more successful campaigns. And all for less than the cost of a bunch of flowers.
That’s what makes that 88 per cent figure from earlier so intriguing – the tools exist to accelerate marketing for businesses with fewer than 10 employees, yet only a fraction of those businesses are using them.
Why is this the case?
AI has a perception problem, and a big part of that is how the technology is marketed. It’s a very buzzy term this year, but it feels out of reach for small businesses, both from an affordability and a technical understanding standpoint. People are being told it can help their businesses, but many still don’t understand exactly how to use it, and they understandably are hesitant.
Our research shows that 74 per cent of small businesses are interested in using AI, with 55 per cent reporting that their interest grew in the six months prior to being surveyed. However, 80 per cent of those surveyed report having a beginner-to-intermediate understanding of how AI could potentially benefit their marketing efforts. This suggests that more education is needed.
For those that have begun using marketing tools that incorporate AI, the benefits are clear, and small businesses are seeing immediate results. Here are some examples.
Saving money
Small-business budgets are often tight, so their default is to think lean. Fortunately, AI is helping them stretch their budgets further. Our research found that 58 per cent of SMEs currently using AI in their marketing expect to save more than US$1000 ($1519) in the coming year. Another 28 per cent expect to save over US$5000.
Get to know your customers better
We found that 38 per cent of small businesses that have been using AI-powered marketing tools for more than a year say they now know their customers better. The benefits are clear: It can help segment contacts, explain customer behaviour, and identify trends in engagement. All of this helps businesses send more effective and efficient marketing communications and build stronger, longer-lasting relationships with customers.
Save time, work more efficiently
The obvious benefit is that AI-enabled tools do much of the heavy lifting, often with just a few prompts, and our research bears this out: Of those businesses with fewer than 10 employees, 78 per cent report they have saved time and worked more efficiently since they started leveraging AI. But the biggest benefit to businesses, particularly those with just a few employees and no marketing experience, is being able to spend less time on marketing and more time on the areas that drive revenue for the business.
For small businesses that are yet to embrace AI, but are ready to start exploring their options, keep these tips in mind:
- Get AI-educated: Find a local partner that understands the SME space and can allow you to leverage AI without needing to leave its platform.
- Think cost vs benefit: Create a list of costs and benefits, quantify the time you might save which allows you to run your business better.
- Go small business first: Prioritise platforms that have been built with small businesses in mind.
- Weigh up the risk vs reward: There are risks with change and new technology, so ensure you know what they are, but ask yourself ‘What if it works?’, too. List the possible risks versus rewards and make an informed decision.
- Experiment: Test and learn with a proven AI marketing platform. Be patient. The benefits are unlikely to happen overnight, but the data show that it will happen.
AI can do some of the heavy lifting while providing significant benefits to a small business at a time when every sale is crucial. It can be the growth engine that was thought to be out of reach, allowing small-business owners to get back to what they do best: running their business.
This article first appeared in issue 43 of the Inside Small Business quarterly magazine
