SMEs risk falling behind digital curve

Businesses that exploit mobile best grow faster than their rivals
Streets ahead: Kate Lester, chief executive of Diamond Logistics

Listen to this article

00:00
00:00

This is an experimental feature. Give us your feedback. Thank you for your feedback.

What do you think?

A pop-up shop at the Boxpark mall in London’s Shoreditch is a fashionable starting point for a small business hoping to start a trend. Newcomer Wines aims to popularise Austrian wines by whetting the appetites of younger customers.

Daniela Pillhofer, the company’s co-founder, says mobile technologies have a big role to play in educating shoppers on the pleasures of Austrian wine — and in taking payments.

In-store tablet computers show videos about winemakers, and purchases made by credit or debit cards are processed on a mobile phone or tablet via a card reader and app from Swedish mobile payments specialist iZettle.

“About 80 per cent of our customers want to pay that way,” says Ms Pillhofer.

Not every small business is able to handle its customers’ payment preferences so readily. A study in five European countries by Visa Europe found small businesses push about one in four clients away by not accepting cards.

Companies such as iZettle, Payleven and SumUp use mobile technologies to deliver low-cost competition to traditional card payment services, which often have long contracts and monthly fees that deter small businesses.

It is not just in the area of payments that small businesses may lose out. A Boston Consulting Group study of small and medium-sized enterprises (SMEs) found the 25 per cent of SMEs that use mobile services most intensively have revenues that grow up to twice as fast as their peers and create jobs up to eight times faster.

The report says SMEs behind the digital curve “are at risk of being left further behind”.

Mobile technologies underpin the franchise strategy at Diamond Logistics, a courier company in Surrey, England. The scheme, launched in 2012, has seen the company open 14 locations in the past two years and it plans to increase these to 40 by the end of 2015.

The company uses mobile provider Vodafone’s One Net platform for small businesses that integrates landline and mobile connectivity into one system.

Using this, Diamond keeps its distributed network of franchisees and drivers working as a single, customer-focused team, says chief executive Kate Lester.

This means that, when drivers are on the road, it is easy for office staff to alert them, via a mobile app, to new collections they need to make for same-day and next-day delivery services. A feature in the One Net platform automatically diverts customer calls to the person best placed to help them.

The field-based sales team at First Mile, a London-based provider of recycling services to SMEs, uses an Android-based mobile app when members visit businesses in London and Birmingham to gauge their interest in signing up for its services.

The app, linked to a customer relationship management system from cloud-based services provider Salesforce.com, gives the team a map showing which businesses they need to visit in a particular area.

After each visit, they use the app to score that prospect according to a “warmness rating”. A “hot” lead is followed up by the office-based sales team, “colder” leads are flagged up for automated email marketing campaigns.

Bruce Bratley, First Mile’s chief executive, says the company quadrupled its field sales in a matter of months using the app, which paid for itself within a month of its launch in January 2014.

Patrick Rusby, an analyst at Analysys Mason, agrees that better use of mobile technologies can transform a small company’s prospects.

“Mobile opens up new horizons for SMEs, giving them better access to better tools, which enable them to compete on a level playing field against much larger rivals,” he says.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.