The ROI Paradox: SMBs Will Churn Without It but 74% Don’t Measure

According to new survey data from Thrive Analytics, the single dominant reason small businesses (SMBs) decrease or abandon investments in specific media channels is poor ROI or disappointment with marketing outcomes.

Reasons Why SMBs Are Decreasing Their Media Investments

Thrive SMB Pulse Survey Data

Source: Thrive Analytics, January 2016

The paradox is that nearly three-fourths of local businesses don’t use any tools or technology to measure marketing performance.

The Thrive survey had a total of 1,116 small business respondents across major verticals. Nearly 80 percent of respondents had fewer than ten employees and most (46%) were sole proprietors. A majority of the businesses (70%) in the sample had been in existence 10 years or less.

Most SMBs in the survey “measured” marketing performance in terms of calls received (though not via call tracking), in-person visits and appointments. After that ad exposure and reach were important but imprecise considerations.

Though focused on “ROI” and marketing performance, 74% of these survey respondents did not use any tools or technology to monitor or measure the performance of their ads. The largest single group (59%) asked a version of “how did you hear about us?” A minority monitored website analytics (28%) or used things like coupon or promo codes to track performance (18%).

SMB Usage of Tools/Technology to Help Measure Marketing Performance

Screen Shot 2016-02-09 at 10.19.12 AM

Source: Thrive Analytics, January 2016

While “ROI metrics” are available to SMBs, dashboards, data and tools are often complex and difficult to decipher. It’s clear that marketing service providers catering to the SMB market need to both simplify marketing metrics and offer more tangible information such as local visits and bookings.

2 Responses to “The ROI Paradox: SMBs Will Churn Without It but 74% Don’t Measure”

  1. Aaron Boggs says:

    Greg, enjoyed the article. It’s interesting how a small business defines ROI and understand dynamic variables in their businesses. We spend a considerable amount of time educating our customers on digital path to purchase, LTV and branding attribution. We also have found that an SMB has to have a partner guide them through the meaning and relationship of analytical data.

  2. Greg Sterling says:

    It’s a challenging issue. Wonder Aaron how you think about things like offline visits, calls and other “real world” metrics. Will that change perceptions of value among SMBs. While calls have been around to date most have only had access to “proxy metrics” such as site traffic, clicks, impressions, views.

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