Why are small businesses missing the boat on personalised CX?

Our latest research shows that less than half of consumers believe that small businesses offer a more personalised customer experience.

Our latest report has revealed that small businesses are failing to capitalise on personalised CX. The findings show that the majority of consumers (60%) are receiving superior service from larger businesses across a range of key areas in which smaller enterprises should – in theory – have a natural advantage.

The report – Small Business Customer Service in 2023: A Missed Opportunity? – found that only 40% of consumers felt that smaller organisations offered a more personalised customer experience.

The findings also outlined some of the key areas in which small businesses are failing to adequately support their consumer base:

Just 39% of people said that small businesses seem to care more, despite challenges such as the cost of living crisis impacting earnings.

Only 37% believe small businesses are more likely to go the extra mile to resolve an issue.

Less than a third (32%) said that small businesses are more flexible when coming to an agreement on a problem.

But why are smaller organisations struggling with the aspects of CX and customer service that they should thrive in?

Coming up short

Whilst larger corporations hold obvious resource advantages that allow them to excel in areas such as pricing and speed, there is no reason that smaller businesses should be losing out when it comes to personalisation.

In fact, smaller businesses have potentially more opportunities for one-to-one interactions with customers and, with a smaller client base, should have visibility on each purchase or booking.

Unfortunately, the report reveals that the majority of small businesses do not view customer service as a major priority, with almost half having no dedicated customer service support.

More worrying still, 44% of small business owners believe that their business doesn’t need extensive customer service provision, with 19% advising that it was too expensive to hire more inhouse support, and 13% claiming it would be too expensive to outsource their customer service.

The combination of a lack of prioritisation and limited resources means that around half (48%) of small businesses have no dedicated customer service support.

But how is this lack of support impacting businesses?

Customer service is an investment, not a cost

As part of the report, consumers were surveyed about their responses to bad customer service experiences, with the results making for frightening reading for any company that does not deem customer service as business-critical. 50% of respondents admitted to having stopped spending following a bad customer service experience.

Moreover, 82% of those surveyed revealed that a positive customer experience can change their opinion of a brand or business for the better, even following a poor buying experience.

Around a third (32%) of people said that it encourages them to leave a more balanced review online, and 27% said that it prevents them from leaving a negative review.

Martin Brown, CCO at FM Outsource

“While larger businesses typically have the advantage of greater resources to invest in their customer service, smaller businesses should – in theory – have their own advantage in being able to offer a more flexible, personalised service to their customers. The research shows that unfortunately many are failing to do this and may be experiencing negative consequences as a result.

“The research really emphasises that small businesses cannot afford to rest on their laurels when it comes to customer service. Consumer expectations are continually increasing and it’s clear that there is a real risk of small businesses suffering negative online reviews, and an associated loss of custom, if they fail to meet those expectations.”