Connectivity is seen as a necessity in the information age, but how much is it really costing your business each year?
According to the Cost of Being Connected report produced by Suncorp, Australian SMEs are spending an average of $17,332 a year to make sure they are connected to the internet.
You may be surprised to learn that only part of that is telecommunications/internet connectivity. This accounted for less than a quarter (23 per cent) of total SME expenditure on connectivity, with an average annual bill of $4,012. This was followed closely by hardware, accounting for a further 22 per cent share of the costs at $3,815.
Other cost burdens included IT development, support and maintenance, software, and digital marketing and monitoring.
The report also suggests that more than half of Australian SMEs are seeing costs ballooning in the provision of a positive customer experience, and a third admit that their technology costs in general have been higher than expected – and are predicted to rise further.
“Technology has the ability to drastically expand a business’ reach, but at the same time, customer expectations for them to be responsive have also increased,” said Suncorp head of business customers John Debenham.
In today’s connected society, SMEs are expected to provide assistance to their customers whenever they want it. That means not only spending more money to maintain an internet presence, but also spending more of their time out of hours on their business.
“The cost of connecting is not just financial, it’s time-consuming. If we are not available to quickly reply to a customer, we run the risk of losing their trust and sale,” said Mr Debenham.
“A business owner’s time is very valuable, yet is it the one thing they never have enough of. However, it’s important they allow enough time to work on the business, not just in their business.”
Trends in different industries
Retail and hospitality
- SMEs in the retail and hospitality industry were deemed the most active in utilising social media to engage with customers, at 64 per cent.
Professional and financial services
- In the professional and financial services industry, 25 per cent of SMEs use social media to engage with customers.
Education, health and arts
- The education, health and arts industries saw 17 per cent of SMEs using paid social media advertising.
Construction, forestry, mining, transport, utilities
- In the construction, forestry, mining, transport and utilities industries, concerns about attracting new customers were the lowest when compared with other industries, at 35 per cent of SMEs.
Manufacturing and wholesale trade
- The manufacturing and whole trade industries were the least likely to use social media to engage new customers rather than existing customers, spent the most on digital marketing and monitoring, and were the most likely to use email marketing.
Other services (IT, real estate, administration)
- SMEs located within the IT, real estate and administration industries were found to spend more than half their time on social media and email marketing to engage with existing customers, while spending the least on digital marketing and monitoring.