By Colin Timmis, Xero South Africa Country Manager

 With the advent of technology and digital transformation, customers’ expectations have risen rapidly, creating a highly competitive environment for businesses wanting to win them over. Today, customers need relevant and personalised experiences when purchasing products and services. With access to more information than ever before at their fingertips, today’s customers expect businesses to provide seamless experiences that harness digital technology.

Technology plays a critical role in helping small businesses sell online and enables them to adjust to changing customer behaviour patterns and needs. Using cloud-based tools gives small businesses the opportunity to compete with large businesses for customers.

Our findings in the Xero State of South Africa Small Business report 2022, shows that over one in three businesses plan to grow into new markets in the year ahead. According to the report, 30% of small businesses say that technology has enabled them to reach new customers or expand into new areas, and over a quarter have leveraged the latest software to improve their processes. Furthermore, Xero's Small Business Insights report on digitalisation during the pandemic shows digitally enabled small businesses that had higher levels of technology spend relative to their total spend on all expenses, experienced greater sales during the pandemic.

Gaining an understanding of your customers

Personalising the customer experience can help businesses build trusting, loyal relationships with their customers. Using technology in your business can help you to learn more about your customers through collecting information and using it to provide or recommend products or services that are most relevant to them.

As a small business owner, it’s crucial to understand your customers and how you can meet their needs.  Reviewing your customer support, sales and marketing services can help you identify areas where technology could help you provide a better, more personalised experience for your customers.

Customer retention is critical for small businesses to achieve both commercial outcomes and customer happiness and satisfaction. Technology can also help you create a community for your customers, giving them a space where they can connect with each other, and share their thoughts and feedback.

The importance of human connection

It’s important for small businesses to evolve as their customers do and the pandemic has forced them to consider how they can limit physical contact and show up better online, while maintaining excellent customer experiences. Xero’s Time to Rebuild Report showed that the use of cloud accounting jumped from 13% of SMEs in 2017 to 61% in 2020.

Keeping your customer at the heart of everything you do is important, you want to avoid losing your personal touch. When pursuing a digital-first approach, it’s critical to maintain a personal experience where your customers feel a sense of human connection, through things like the use of videos and images, an online chat function on your website or personalised emails.

This is an area where small businesses could focus on in order to improve their customer experience. In a global study by Xero, more than 30% of South African businesses in the survey said that some of the key concerns they have in their business include not knowing how to use online marketing and social media effectively.

Use industry specific tools

There are countless digital tools that can help small businesses manage their business, connect with customers and provide a more personalised experience. If your business sells online, you may want to consider using e-commerce apps that make it easier for your customers to find and purchase your products over others.

You should also be using an inventory app to manage and track your stock to gain better insights into your bestselling items. Finally, point-of-sale software allows you to offer and accept different payment methods, lets you capture sales transactions efficiently and gives you complete visibility of your sales metrics. When supported by a CRM, these tools can offer you in-depth insights into your customers’ purchases and help you identify opportunities to grow customer loyalty.

We strongly recommend you work with an accountant or bookkeeper to find the best digital tools to use in your business. Through the Xero App Store, you can discover over 1,000 apps that integrate with Xero to help make running your business easier.