When asked, with the benefit of hindsight what SMB owners would do differently if they saw the recession looming again, the majority (43%) said that they would have put a much greater emphasis on sales and marketing; whilst nearly a third (31%) said they would have cut staff quicker and deeper.

This is despite the fact that nearly half of the sample (45%) have already made some redundancies in the first half of the year: a third of respondents shed up to 10% of their workforce and 12% let more than 10% of their staff go. These are dramatic findings for SMB operations, averaging 27 employees, representing most sectors of the economy and based throughout the UK.

Unsurprisingly, 55% of SMB owners say their business’ success is inextricably linked to the health of the wider economy. But perhaps more worryingly, over a quarter of the sample (26%) expects their businesses to be hit after the wider economy begins its recovery. In other words now that we are moving into the latter stages of this downturn they expect to be hit the hardest.

SMBs’ sales order books took the hardest battering in Quarter 2 2009 (April-June 2009) out of the last three quarters for the largest group (38% of the sample). But 26% saw Quarter 1 2009 as the worst period of trading to date while nearly a third (31%) have seen no real fall in orders over the last nine months which is impressive.

A quarter (24%) of businesses had seen sales fall by up to 10% and a further quarter by 11-20% in the first half of 2009. A fifth of SMBs (19%) reported a drop in sales of over 20%. That said, the majority (38%) predicted that business income falls will slow down in the next six months and over a quarter (26%) even said they felt the downward curve would stop completely by the end of the year. A tiny minority (5%) thought things would get worse through to the end of the year.

SMB owners are still not good at selling and marketing their services by their own admission. Over a fifth (21%) had no systems for collecting and managing records or staying in touch with prospects at all. Nearly half the sample (48%) relies on Excel spreadsheets or Microsoft Access databases to store and manage prospective customer records. Very few had proactive and reliable systems for keeping in touch. The majority (43%) admitted that any systems they did have were not well integrated with Microsoft Outlook or other email systems. Face-to-face meetings and email remain the two key methods of keeping in contact with prospects (very similar to customers themselves) which indicates huge scope for efficiency as face-to-face meetings are well-known to be the most expensive method of keeping on a prospect’s radar; whilst email, because of the escalating numbers that we all receive, are not meeting with the attention they need or deserve.

However all is not lost for SMBs as nearly half (43%) are now investing in improving their websites. 57% are slashing costs to increase sales and over a third (38%) is doing more sophisticated business development work including establishing new partnerships and joint ventures.

Responding to the survey Stephen Alambritis from the Federation of Small Businesses said: “It is hugely reassuring to learn that more small firms are investing in improving their website. As the home market struggles to recover it is important that businesses appeal to international patronage. The global economy has meant the death of distance in commercial transactions and what better way to take advantage of this phenomenon than to invest in online collaboration.”

On Social Media, the majority (29%) were already seeing it as a good Business-to-Business Networking tool (e.g. LinkedIn and increasingly Twitter and Facebook). Over a quarter (26%) only saw Social Media as valuable for those selling consumer products directly to them. Nearly a fifth (19%) simply said that they did not know how to use it positively in their businesses and 17% went further to say that it was a ‘big waste of time for SMB owners’ and 10% thought it was something which was led by ‘kids with too much time on their hands.’

David Holt, director of contact management at Amplify, commented on the findings: “Although many of SMB owners’ experiences in this downturn are unique there are some common threads. Firms that have read the market well are thriving despite the economic gloom. Success is also coming from getting closer to customers and seeking more feedback, more regularly on what they want. A small number of SMBs are capitalising on some of the major shifts that are happening in the way businesses and individuals buy even the most specialist goods and services. We think many more should take the plunge. “We argue that the heavy reliance on telesales, outbound email and face-to-face meetings must be supplemented by a mixture of internet-based ‘pull’ marketing techniques which have matured in recent years. The average SMB has more than 30 prospects at any one time, any one of which they could reasonably expect to do business with in the next six to 12 months as the gloom lifts. But what are businesses doing to foster those relationships, remind them of their credentials and capabilities and keep these vital relationships alive?

“There is no doubt that some online collaboration and social media strategies integrated with corporate websites and email can really help keep SMBs in front of their prospects and keep the lifeline of new business flowing in through tougher economic times.”

About Amplify

Amplify offers a range of services designed to help SMBs manage customer and prospect information effectively and harness this information to communicate and collaborate with customers, partners, suppliers and prospects.

Amplify Value delivers leading-edge, hosted CRM software at affordable prices and is based on Microsoft Dynamics CRM 4.0.

Amplify Voice provides an engine for automated, branded electronic newsletters using RSS news streams, Blogs, direct messaging and links to keep in touch with customers and prospects without bugging them. The use of RSS technology allows SMBs to publish online feeds and dynamic website content into your newsletter meaning the effort to create a regular newsletter service is reduced dramatically.

Amplify Vision uses Microsoft Office SharePoint Server 2007 (MOSS) as a platform to bring information, people and processes together. MOSS organises this around people and the way they work.

Amplify Virtual simplifies the myriad of Web 2.0 sites and delivers a platform of appropriate Social Media sites that will improve brand awareness, generate traffic to SMBs’ websites and improve the ranking of SMBs’ websites on search engines. This is the solution for firms looking to embrace the benefits of pull marketing.

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