Three tips to drive SME growth this year

scale business, founder, performance

Despite making a vital contribution to the Australian economy each year, small and medium-sized business owners face regular financial and managerial concerns. Whether it’s battling through two plus years of a global pandemic, facing rising interest rates and minimum wages or attracting new customers, SMEs today are facing a myriad of challenges.

To stay competitive, SME owners must become a ‘jack of all trades’ – especially when it comes to understanding and executing customer retention strategies. To help SMEs navigate the current financial climate while retaining and gaining new customers, here are our top three tips to support small and drive growth this year.

  • Understand spending potential: To help small businesses as they adapt to this post-lockdown environment, the Australian Retailers Association (ARA) has worked with Afterpay on the Next Gen Index to create an online dashboard that breaks down spending trends across categories, demographics and location. The index shows how the spending habits of younger Australians have shifted throughout the pandemic, from increased spending on household goods in the latter part of 2020, to more purchases on recreation and experiences in the first half of this year. Most promisingly, Afterpay has seen younger Australians in particular show their support for local and small businesses, accounting for two-thirds of their sales for these businesses nationwide.
  • Loyalty programs: Once you have engaged new customers, retaining them is an important aspect to the success of small businesses. Loyalty programs encourage new customers to become repeat users, while also encouraging existing customers to remain loyal. Programs can take a number of different forms, whether it’s a free item after a certain number of visits, discount codes when spending over a certain limit, quarterly gifts or VIP access for sales or new launches.
  • Plug the leaks: All companies over time will win and lose customers, but clearly identifying any underperforming sectors of your business is paramount to retaining business. Over time companies can become complacent, things can slip, and customers can start looking elsewhere. A monthly customer service audit is a great step toward identifying where standards are low and allows you to plug the leaks before it’s too late.

By understanding the different ways SMEs can both maintain and grow customers, businesses can be more resilient in the face of changes within the wider economy, can stay competitive within the market, and ensure a satisfactory customer experience.