Small Businesses Use Net for Customer Service, Communications

More small businesses are relying on the Internet, especially for customer service and communications, according to a survey by Verizon.

Of the small businesses surveyed for Verizon SuperPages.com’s Third Annual Small Business Internet Survey, 37 percent report having a Web site, up 6 percent from 1999. Small businesses are using the Internet as a proactive customer relations and marketing tool. But the Web isn’t the only Internet tool small businesses utilize. More than half of small businesses with a Web site exchange email with customers daily. In addition, 48 percent exchange email with customers several times a day — a 60 percent increase over the past year, and one in five small businesses with a Web site distributes an email newsletter.

“The Internet is just as critical a business lifeline for small businesses as it is for big businesses,” said Patrick Marshall, group vice president for marketing at Verizon Information Services. “As small business owners realize the value in basic Internet features, they will begin to explore more in-depth applications.”

Nearly two-thirds of the small businesses surveyed that report having a Web site say the Internet is important or extremely important to their business. On a scale of one to 10, they rate its importance a seven or higher.

Small businesses are increasingly establishing Web sites for the purposes of advertising and communications, the study found. In 2001, 36 percent of small businesses with a Web site established the site to advertise their business and provide company information, compared to 9 percent who established it to sell or market products or services online. This is a continuing trend from 2000, when 26 percent of small businesses with a Web site developed it for advertising and communications purposes rather than 13 percent who developed it for transactional functionality.

More service-oriented businesses are getting online today than any other industry segment. Companies in the financial, real estate and insurance industries have experienced a 160 percent growth rate in the number of businesses with a Web site since 1999.

When it comes to basic Internet functionality, small businesses with a Web site say email communication is the most important online feature for their business in the next 12 months. E-mail was rated an eight in importance on a scale of one to 10.

It should come as no surprise that small businesses told the survey they are benefiting from their Web efforts. Fifty-seven percent of small businesses said their Web site has provided at least a 100 percent return on investment. In fact, the majority of small businesses with a Web site expect the amount of business generated from their site to increase. In addition, sales generated from the site, as a percent of the total sales, show a 23 percent growth in the past year.

More than half of small businesses with a Web site are planning site enhancements in the next 12 months. Most of these improvements consist of new marketing efforts, including 62 percent who plan changes to site design, 59 percent who plan to add more products or services to the site and 52 percent who plan to promote or increase advertising for their site. More than half (52 percent) of those with a Web site would like to add an online lead generation service, 24 percent are interested in a scheduling application and 20 percent would like to increase their exposure to the Hispanic community with a Spanish version of their site.

The Small Business Internet Survey was conducted by The Gallup Organization, Inc. It was based on a random telephone survey of 500 companies in the United States that have 50 or fewer employees in July 2001.