The digital age has exponentially increased the potential of small businesses to increase revenue through technology, such as online marketing tools, e-commerce platforms, and data analytics. The operative word here is “potential” because, according to a 2018 Deloitte study commissioned by Google, about 40% of small businesses don’t take advantage of digital tools for various reasons.

The same survey found that small businesses with digital engagement on some level ― basic, intermediate, high, and advanced ― reported a 38% increase in revenue and sales, 31% in brand awareness, and 30% more new customer access and engagement in the United States.

The study also showed that 69% of small businesses believe that advanced digital engagement improves employee satisfaction, making them more productive and reducing employee turnover.

employee satisfaction graph
Source: Deloitte

The statistics show that digital engagement significantly impacts business success today, even when the business isn’t online-based.

So, what is digital engagement?

Key Takeaways

  • Digital engagement is the level at which a company or business interacts with the software and online platforms for business processes and customer interaction.
  • Small businesses with high levels of digital engagement see significant increases in customer engagement, revenue, and employee satisfaction.
  • The most important drivers for digital engagement are customer engagement, employee productivity, business agility, new opportunities, and profitability.

What Does Digital Engagement Mean?

A quick search for the term “digital engagement” shows results for digital customer engagement. However, the context of digital engagement is much broader, encompassing all aspects of a business, including customer engagement.

Of course, a business’s success ultimately rests on customer satisfaction, so perhaps the search results make some sense. The technology used in digital engagement extends beyond customer-centric tools.

Digital engagement is the active interaction of users with a digital platform or software that leads to the digital transformation of a business. The effectiveness of digital transformation depends on the extent of digital engagement in the following areas:

  • Marketing
  • Sales
  • User onboarding
  • Technical support
  • Customer support
  • Product training
  • Sustainable development

Small businesses with higher digital engagement have a smoother transition to digital transformation. Overall, that means higher customer and employee satisfaction.

According to McKinsey, customer-centric transformation can increase customer satisfaction up to 30% and employee satisfaction up to 20%, resulting in economic gains up to 50%.

What Are the Drivers of Digital Engagement?

Small businesses invest in technology to reap the benefits of digital transformation. The Deloitte study suggests that benefits relating to customer engagement, marketing, and recruiting have the most perceived value in the U.S. from a small business perspective.

Experts agree that most businesses invest in advanced digital engagement to achieve the following:

Better Customer Engagement

Most customers interact with businesses online, which means companies need to have some online presence even if they’re offline businesses. A majority (81%) of consumers research a company online before purchasing. If you don’t have an online presence, you miss a large chunk of potential revenue.

Aside from helping customers find you, using social media or building a website can help you engage with them outside of the sales cycle and establish a relationship. Providing them with valuable information through blog articles or alerting them to exciting events on Twitter helps build brand awareness and credibility with your target audience. Using other technology, such as chatbots, email marketing tools, and self-service platforms, ensures that you maintain contact with them 24/7.

email marketing tools
Source: Constant Contact

Higher Productivity

We mentioned earlier that higher digital engagement improves employee engagement, directly impacting productivity. Businesses that subscribe to human resources (HR) best practices, for example, probably also retain employees longer.

Aside from improving employee engagement, digital tools can increase productivity simply by streamlining work processes and reducing tedious, repetitive tasks. Automating the workflow minimizes errors, and physical and mental stress on employees. Productivity apps, such as Slack and Trello, can also improve coordination and accountability, especially for remote workers.

Using digital technology reduces manual effort and time taken to complete routine tasks, enabling employees to focus on nonrepetitive and high-value activities.

Increased Agility

Small businesses tend to be agile by virtue of their size but using technology to automate work processes makes them even more so. A digitally transformed company can quickly pivot with sudden changes in circumstances to take advantage of new opportunities or avoid risks.

For example, a small business that uses accounting software can avoid cash-flow and tax problems. You can see at a glance if you’re making a profit and if you can afford to invest in new equipment.

Digital tools can also future-proof businesses by enabling projections and forecasts based on available data, giving them time to act proactively instead of reactively. Predicting the future provides small businesses with a competitive edge.

More Opportunities

A survey of 690 business owners reports that 84% believe digital transformation creates business opportunities. This is because the digital age has made countless opportunities available that weren’t even feasible before. The very concept of selling online or e-commerce is thanks to the emergence of online marketplaces and e-commerce platforms.

Yet, according to our survey, one in four small business owners in the U.S. still don’t even have a website. They don’t realize they’re missing out on countless opportunities that accrue to a more digitally engaged company. Digital tools can make what was impossible ten or even five years ago possible today.

Increased Profitability

The benefits accruing from digital transformation naturally increase revenue, sales, and decreased expenses. Digital tools deployed correctly can streamline and automate work processes, increase employee productivity, improve customer engagement, and provide new opportunities for growth and diversification. A survey reveals that 43% of digitally mature companies experienced higher profit margins than the industry average.

However, businesses at different digital engagement levels tend to have varying perceptions of the value of these drivers.

digital engagement graph
Source: Deloitte

As the graph shows, fewer companies with basic levels of digital engagement perceive the value of technology in increasing sales and revenue, brand awareness, competitive edge, and target market access.

More of these businesses believe that technology improves customer engagement than advanced users, implying that companies with low digital engagement only perceive the value of digital marketing tools.

How Can You Measure Digital Engagement?

Measuring digital engagement involves the use of data analysis software. The presence of data, and the need for data analysis software, indicate a business’s technology use.

data analysis software
Source: Domo

If a business has low levels of digital engagement and uses only email for communication (not marketing) and one or two social networks to post products, it hardly has any data. Meanwhile, a small company with advanced digital engagement has much more data to crunch. Among the data sources are websites, e-commerce platforms, and social media, each showing the extent to which a business has progressed into digital transformation.

You can also measure digital engagement by using customer engagement platforms because customers increasingly expect businesses to use technology. About two-thirds (66%) of customers today expect companies to know their needs without being told and provide consistent service throughout the sales cycle. That’s only possible if a business has data that it can analyze to predict what people need and meet their expectations.

All-in-one platforms, such as EngageBay, can be very helpful in measuring customer and digital engagement.

EngageBay Features
Source: EngageBay

What To Do Next?

Several surveys agree that companies with high levels of digital engagement realize the benefits, which are also the most important drivers for investing in technology in the first place. It makes no sense not to take advantage of the available tools for small businesses as many of the solutions are pretty affordable.

If you run a small business with little or no digital engagement, you should start thinking about making that leap. The earlier, the better.

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