Technology providers across New Zealand continue to lean heavily on word of mouth to acquire customers, failing to utilise huge advancements in digital marketing.
Representing the biggest challenge to the Kiwi channel in 2018, partners are struggling to shed archaic marketing tactics in favour of more dynamic ways to communicate with potential customers, restricting growth opportunities as a result.
Marketing - or a distinct lack of - is a problem often swept under the carpet by providers, providers relying heavily on technical expertise and experience.
And while such in-depth capabilities combine to create enviable reputations locally, partners are failing to expand outside of the referral zone, with messaging trapped in a concentrated pool of current customers.
Partners do have a very strong story to tell however, because a solid reputation counts for the customer. But the informed technology buyer today requires more than carbon copy websites, vendor-centric pitches and out-dated marketing techniques.
In an ecosystem spanning thousands of technology specialists, differentiation is difficult in a market crammed with competition. And for partners seeking to expand and become national players, new marketing methods must be utilised to attract new customers.
According to research from Dot Kiwi, the internet domain name provider, small businesses in New Zealand are staying clear of advanced digital tools that lets them market to customers en masse.
Instead, word of mouth is still relied heavily upon, and email is viewed as the best way to keep in touch.
“While word of mouth will always remain the best form of marketing, other opportunities to generate new customers are being under-utilised,” Dot Kiwi managing director Angus Richardson observed.
“For more than 80 per cent of SMEs word of mouth is the main way they get new business leads, but then the question is how do you convert these leads – the answer for more than four out of five SMEs is email.
“Of those businesses which rely on email, however, only 30 per cent send promotional emails, and 28 per cent newsletters.”
Richardson said that most email communication remains conversational, with only 19 per cent of SMEs investing in the use of automated digital marketing tools to assist with sending bulk emails.
Looking beyond the basics; mobile apps, online video and augmented reality remain very much in the domain of big business.
The survey also found around half of SMEs spend less than $1,000 annually on marketing per year, which means big ticket items are out of the question.
“Around two thirds of SMEs we surveyed don’t offer an app and don’t plan to in the next 12 months,” Richardson explained.
“The same goes for online videos and big-business marketing tools, such as augmented reality, which is beyond most SMEs.”
Comparatively however, 51 per cent of SMEs in New Zealand have social media pages, and 41 per cent are investing in advertising through those channels.
“It’s great to see some SMEs experimenting with apps, video and augmented reality, but for a SME with relatively small marketing budgets it’s probably about figuring out how to optimise their existing digital presence,” Richardson added.
“This could include adding an e-commerce functionality to their website where appropriate, having social media presence linked to their website, or use of tools such as SEO, and most importantly, developing a secure domain name strategy.”
Despite the heavy use of email for communication, the research showed 57 per cent of SMEs don’t have any strategies in place to protect the domain name they use for their emails or website.
“With recent events such as emails being discontinued, now more than ever SMEs should think carefully about their online presence,” Richardson added.
For Richardson, this is particularly concerning considering the prevalence of phishing scams, which can take the form of fake websites, or more commonly fake emails.
“Our research showed despite sophisticated marketing tools on offer, email is still the lifeblood of SME communications,” he said.
“However, on the whole SMEs are too relaxed about making sure similar domain names aren’t snapped up by other people. It’s not always about people being malicious and pretending to be you online, it can just be an honest mistake but your website visitors wouldn’t know that.”