By Harrison Ackerman, Research Manager
Interise’s Small Business Panel Survey has been collecting real-time insights from a diverse group of business owners across the US since early 2020. Roughly each month these brief surveys collect information on things such as changes in revenue and employee count over time, the small business ownership experience, and sentiment on topics important to business owners. The longitudinal panel survey compliments Interise’s program and impact evaluation systems by allowing us to be more flexible, current, and frequent. Below you will find write ups on our two latest panels from May 2021 and July 2021.
MAY 2021 – A pulse check on small businesses and their hiring plans
Interise’s May panel survey focused on small business recovery from the COVID-19 pandemic. Before the recent resurgence of COVID-19 across the country, largely due to Delta variant cases among unvaccinated Americans, the Centers for Disease Control and Prevention (CDC) boldly relaxed its mask recommendations for those fully vaccinated which furthered the reopening of the economy. In mid-May the CDC issued new guidance that vaccinated Americans no longer needed to wear masks in most settings. Vaccination rates were climbing and pandemic-restrictions were being dropped at the state and local levels. This check on the pulse of small businesses came at a pivotal moment in the reopening of the economy and offered many insights about how owners were steering their businesses into the summer.
We checked in with business owners about how their businesses were doing and about hiring plans for the remainder of the year. The first part of the survey asked respondents to choose one or more from four options to describe how their business was doing. For businesses still facing challenges, respondents chose one or more challenges from seven options or wrote in their own other challenge. For businesses implementing new strategies to prepare for the economy recovering, respondents chose one or more strategies from six options or wrote in their own other strategy. For businesses that expanded during the pandemic and maintained that growth, respondents described what allowed them to expand. The second part of the survey asked respondents about whether or not they were planning to hire full or part time staff during the rest of 2021. For those planning to hire, respondents then indicated when by choosing one or more of the remaining three business quarters (Q2, Q3, and Q4). For those not planning to hire, respondents described what was keeping them from hiring.
How is your business doing?
Among all respondents, short-term optimism for the next three months dipped from 65% of respondents being moderately or very optimistic in April to 56% in May. This is an important backdrop to keep in mind as we review how owners responded about their businesses and hiring plans back in May.
When asked about how their business was doing, 46% of all respondents indicated they were still facing challenges, 29% were operating as before the pandemic, 21% were implementing new strategies to prepare for the economy recovering, and 18% expanded during the pandemic and were maintaining that growth. Black business owners were interestingly both nine percent more likely to have expanded than their white business owner counterparts (27% and 18% respectively) and nine percent more likely to still be facing challenges (50% and 41% respectively). White business owners were more than twice as likely to be implementing new strategies to prepare for economic recovery than Black business owners (24% and 9% respectively), and 14% more likely to be operating as before the pandemic (37% and 23% respectively). These disparities illustrate the variance of experience for different owners as the economy opened up further.
Of the 46% of all respondents that were still facing challenges,
- 56% faced insufficient sales pipelines,
- 51% faced increased operating costs,
- 49% faced decreased revenue,
- 47% faced challenges rehiring qualified staff,
- 32% faced challenges retaining customers/clients,
- 25% faced challenges accessing operating capital,
- 22% faced other challenges, and
- 17% faced challenges accessing capital for a pivot.
Of the other challenges described, business owners notably also mentioned logistical hurdles as challenges.
Of the 21% of respondents that indicated they were implementing new strategies to prepare for the economy recovering,
- 44% were creating a larger emergency reserve to mitigate future disruption,
- 41% were expanding products or services sold at brick and mortar locations,
- 41% were using videoconferencing tools to reach a larger market,
- 37% were adding e-commerce to their business model,
- 37% were training staff to use new business systems,
- 22% were implementing another strategy for recovery, and
- 15% were upgrading their financial systems.
Other recovery strategies written in emphasized creativity and flexibility as it was applicable for their business.
For the 18% of respondents that indicated they expanded during the pandemic and were maintaining that growth, increased demand, pandemic-related products and services, economic stimulus, and product and service improvements were all leading factors respondents said enabled such expansion.
Planning to hire this year?
When asked about hiring, overall 66% of respondents were planning to hire new full or part time employees this year, 12% were not, and 22% said there was still too much uncertainty in their business to know. Of those planning to hire, 68% planned to hire during the second quarter, 43% planned to hire during the third quarter, and 13% planned to hire during the fourth quarter. Those not planning to hire were asked what is keeping them from doing so. Responses to this open ended question focused on limited revenue that was either preventing or delaying hiring.
Black business owners indicated they were less likely to hire this year than white business owners, 55% to 68% respectively. Nearly double the proportion of Black business owners than white said there was still too much uncertainty in their business to know, 36% to 19% respectively.
Hearing from Interise’s small business community at such a significant time was really valuable. It gave us crucial insights at a high level into how businesses were faring, and a further drill down about all the different turns these firms are taking, including if and when they are hiring.
July 2021 – Customer interactions: communicating with, retaining, and attracting customers before the pandemic, during the heart of it, and currently.
Exploring customer interactions
After no panel survey in June, Interise’s July panel survey asked about the ways business owners interact with their customers. We specifically focused on identifying the leading ways business owners communicate with customers, and how they both retain existing customers and attract new ones customers. Given that the COVID-19 pandemic has changed how many business owners have gone about each of these customer-related interactions, we also asked respondents when they employed each method: i.e. before the pandemic (prior to March 2020), during the height of the pandemic (March 2020 to June 2021), and/or currently.
Hearing from business owners about the specific ways in which they communicate with, retain, and attract customers is definitely useful as we tailor programming, resources, and community engagement activities to better support our national network. However, adding another level of depth to explore if, and to what extent, such methods have changed over the past year and half allows us an early interpretation of what may be temporary pandemic-induced trends and those changes that may be longer lasting.
Overall, in-person engagement has mostly rebounded since the height of the pandemic and virtual levels of one-to-one engagement are not as high as they were then. However, virtual engagement has come nowhere near dropping to pre-pandemic levels, evidence of the “stickiness” of virtual engagement even as the economy opens up.
First, we asked business owners about the primary ways they have communicated or currently communicate with their customers. Respondents chose from multiselect checkbox options and also had the option to write in another way if applicable. The leading methods of communication utilized, regardless of when, were one-to-one in person, which 79% of respondents indicated they have done or are doing, telephone calls (78%), social media (68%), and one-to-one virtually (57%).
Among those that have used or currently use one-to-one in person communication, usage dropped from 98% of respondents before the pandemic to 38% during the height of the pandemic and is currently at 72%. On a much smaller scale, telephone calls dropped from 96% utilization before the pandemic to 91% during and 94% currently.
While smaller majorities of respondents have used or currently use social media and one-to-one virtual communication, their usage has grown. Among those that have used or currently use social media, usage climbed from 87% of respondents before the pandemic to 91% during its height, and continued to climb to 94% currently. One-to-one virtual communication soared from 31% utilization before the pandemic to 97% during and leveling out at 87% currently.
One-to-one in person and telephone communication appear to have largely shifted to one-to-one virtual during the height of the pandemic, but are coming back closer to pre-pandemic levels even as virtual communication remains very strong. Social media communication, however, has only grown.
Next we asked business owners about customer retention and acquisition, using the same set of multiselect checkbox options for both along with write in options. Three customer retention strategies have been or are currently being used by a majority of respondents: one-to-one outreach in person (73%), social media (64%), and one-to-one outreach virtually (62%).
All three of the leading customer retention methods followed similar patterns to their use in customer communication. One-to-one in person customer retention dropped but has mostly recovered, social media only climbed during the pandemic and through now, and one-to-one virtual retention peaked when pandemic restrictions were most strict and is currently a bit lower but still used much more for customer retention than before the pandemic.
Finally we asked business owners about new customer acquisition. Two customer acquisition strategies have been or are currently being used by a majority of respondents: social media (68%) and one-to-one outreach in person (61%).
Both of the top two customer acquisition methods followed similar patterns to their use in customer communication. Social media only climbed during the pandemic and through now, and one-to-one in person customer retention dropped but has mostly recovered.
Among open text responses in which respondents shared other observations about these topics, the main response categories included using word of mouth or direct contact as important channels, improving and changing marketing and communications being advantageous, and opportunities that have come about from the pandemic.
This July 2021 panel data reinforced just how important digital engagement has become for small business owners, and shed light on some customer-related changes from the past year and a half. For those looking to learn more about this theme, the following two resources are curated in Interise’s Small Business Resource Center and are linked below.
4 Digital Strategies for Small Businesses Recording Post-Pandemic from Entrepreneur
For those looking to learn about what they can leverage in digital space as a small business, this resource provides advice on how they lean into two key strengths of being small–being a part of their community and being positioned to meet people’s need for social connection–and incorporate them into their digital strategy.
Connecting Small Businesses Research Livestream from Google Small Business
This resource shares more research findings on how small businesses are using digital tools and what benefits that have to gain from adopting them. It also includes a panel discussion where business owners discuss how they’ve adopted digital tools, what benefits and challenges they’ve experienced, and advice on how to integrate digital tools into any small business.