Today’s economic climate is challenging for businesses of all sizes, but small service-based businesses are arguably finding it hardest.
The good news is that after more than two years of living in a pandemic and finding ways to deliver services online, consumers are happily returning to in-person shopping, meetings, and service delivery.
But the bad news is that our post-COVID world is heavy with the threat of recession. McKinsey reports that while consumer spending grew in early 2022, today’s inflation rates mask a drop in the volume of consumption.
After climbing steadily throughout 2021, consumer confidence is now dropping, and services are taking the biggest hit. Spending on goods is higher than before the pandemic, but spending on services is 2% lower.
At the same time, service providers are facing the fact that consumer loyalty is well and truly shot. The pandemic broke everyone’s buying patterns, and with omnichannel shopping becoming the norm, only 13% of buyers are willing to wait if the product or service they’re looking for isn’t available right now.
There’s no question that service SMBs face a tough outlook, but there’s light at the end of the tunnel. The businesses that survived the pandemic are those that were the most successful in pivoting online and digitizing operations.
They’re now well placed to capitalize on their digital investments and use them to upgrade customer experience and the services they provide.
Some experts hope that as confidence around in-person interactions rise, spending will be redirected towards services and experiences. But expectations are high, and loyalty is low.
Business owners who dedicate time and effort to thinking creatively and innovatively are the ones who’ll discover new ways to delight their clients and see their businesses grow.
Here are five suggestions for service SMBs seeking success by doubling down on digital transformation.
1. Turn your services into a product
For coaches, consultants and others who generally bill by the hour, it could be a good idea to sell monthly or annual subscriptions for your sessions, or so package a bundle of sessions.
This is true whether your sessions take place in person, over the phone, or through video conferencing. It allows you to gain the confidence of a steady income instead of wondering who’ll get in touch next, and it also allows your customer to feel like they’re getting more than your time.
Some services are too difficult to deliver from a distance, but could be repackaged to involve a physical product.
Products can be safely delivered to clients’ homes, or sold from your premises or as curbside deliveries to customers who order and pay online before arriving to pick up their purchase.
For example, a personal chef could switch from catering events to selling home meal kits together with video tutorials, or manicurists could sell personalized home manicure packages with precisely the nail polish, tools, gems, and embellishments needed for a specific look.
2. Encourage virtual appointments
During the pandemic, many SMBs transferred their in-person service interactions online by providing consultations over the phone or through high-quality video calls.
Today there are plenty of high-standard video conferencing platforms that make sure footage isn’t grainy or pixelated, and doesn’t have annoying time lags.
Although many clients are happily returning to in-person meetings, there’s a significant number who enjoy the convenience of virtual appointments and want them to continue.
When you fulfill your services online, you can scale to serve more customers in a given day, avoiding the time and money costs involved with travel to each location.
It’s well worth investing in the tools to help you continue to offer this option. All-in-one small business management platform vcita integrates video appointment scheduling as part of your business operations.
You can invite clients to book their preferred slot, and automate sending a link for Zoom, Skype, or other video conferencing platform, as well as automated reminders as the appointment approaches.
You can require up-front payment ahead of bookings or automate sending a digital payment link after the session.
If you didn’t already, it’s also best to buy a professional subscription to your chosen video-conferencing solution, and to bump up your home internet bandwidth so your connection doesn’t slow down or fail at crucial moments.
3. Enable online transactions for offline services
Many SMBs began offering online transactions for the first time during the pandemic, either for online versions of their services, or to reduce contact for services that can be delivered remotely in person.
Consumers appreciate the ease of use that comes with digital payments, and today they don’t want to give that up even if they’re happy to come back to in-person yoga classes or therapy consultations.
Digitizing payments also helps you streamline your business operations, because it’s far easier to automate basic bookkeeping activities and/or track cash flow into and out of your business, which leaves you with more time to spend on other tasks that help drive more revenue.
Stripe is a popular option for small business payments, because it comes with plenty of integrations that you can use to streamline payment management within your business operations, and to customize your payment processes so that clients see your branding every step of the way.
4. Develop online courses
Online courses are another great way for service SMBs to open up another revenue stream.
For example, a makeup business might focus on doing makeup for special events, like weddings and parties, but you can also offer online courses that train clients in doing their own special occasion makeup, or teach other aspiring makeup artists how to run their own makeup business.
One big advantage of adding online courses is that it’s a scalable business model. Once you’ve prepared the course for the first time, it needs very little further input.
You can sell the same course again and again to different people with minimal effort on your part, apart from perhaps a little tweaking from time to time.
Course creation tools like Thinkific make it easy to add this functionality. Thinkific lets you customize your course website, personalize each student dashboard, and it integrates well with Stripe so that all your payments are aligned. You can use Thinkific to send the whole course at once, or publish each session one at a time.
5. Monetize your data
Every business produces data, but you might not have realized that you can make money from it. You might have data about local shopping habits, the preferences of your target audience, or supply chain and distribution for your vertical. Your data might reflect wider trends and changes within your audience.
It’s possible to sell data raw and unprocessed, but you’ll see more value if you spend some time normalizing, standardizing and deriving insights from it.
You could convert it into reports, or develop a data dashboard that buyers can use to navigate your data. SMBs can even analyze it more deeply to produce advanced insights.
Datarade makes it easy to market the data that you’ve gathered, find customers, and sell it in a hassle-free manner.
It also provides you with insights about your data sales, so you’ll know which kinds of insights are the most in-demand and make sure you gather the right information.
There are many potential customers for your data. Think about other SMBs in your vertical or in neighboring verticals that would appreciate some visibility into market trends. You could gather and analyze data for your B2B clients about their own clientele, too.
Business coaches, financial consultants, real estate agents, and more can run valuable analysis for clients to help guide their next decisions.
Digitalization will help SMBs thrive post-COVID
COVID-19 hammered small and medium businesses, but those that survived have set themselves up well to survive the impending recession that many are predicting.
Today, SMBs are finding ways to grow their bottom line by offering virtual courses and appointments, supporting in-person services, selling data, and converting in-person services into bundled products, keeping revenue flowing no matter what the economic climate.