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It was a 2017 report commissioned by Google that caught Womply President Cory Capoccia’s attention.
The research, conducted by Deloitte, found that 80 percent of small businesses aren’t taking advantage of digital solutions like data analytics. Many businesses are confining themselves to the most basic levels of technology, like email, yet fail to reach an online audience with websites, eCommerce capabilities, social media presence, digital marketing and beyond.
In essence, Capoccia told PYMNTS, these businesses act as if customer engagement strategies have remained the same throughout the years, even though they clearly haven’t.
“Eighty percent of U.S. small businesses are still operating as if nothing has changed. They’re in this status quo,” he said. “They’re not embracing trends surrounding them in how customer behavior changes.”
Many small businesses simply aren’t aware of the opportunities that exist in the digital realm. They may not be familiar with how to use social media platforms, or how to best engage with potential customers online. Many lack expertise in IT, without the ability to build their own websites.
But for many other firms, a digital presence brings a whole new mountain of challenges for the entrepreneur. For Capoccia, they can be boiled down.
“There are two primary areas we see small businesses struggling with in the digital age that can kill cash flow and put them out of business,” he said. “One is the online reputation, and the other is cybersecurity.”
These two concepts are rarely discussed together, but can be considered two sides of the same coin for businesses struggling to digitize.
On the customer-facing side is the online reputation. Less knowledgeable business owners may be able to launch a website, or even establish an online storefront. But they may be facing the threat of negative online reviews, inaccurate information or simply a disconnect between the business’ digital presence and their potential customers. Worse, Capoccia said, business owners may not even know that this is a problem they face.
“If you’re a business owner today and you’re not paying attention to your presence online, and you’re not understanding the behavior of customers, then you’re missing out on a huge opportunity to connect with customers,” he said.
The vast majority of today’s customers research businesses online to decide where to shop, and most use online review sites to aid in their search and decision making, Capoccia said, while about 90 percent of customers will use a business that has a four-star rating online.
On the other side of this coin is the cybersecurity threats that inevitably come with establishing a digital presence of any kind. Those threats are vast, but Womply’s own research has found that most of these attacks are in the form of phishing and business email compromise (BEC) scams.
Capoccia recalled a friend’s construction business that recently fell victim to this attack, when an employee received a fraudulent email claiming a supplier’s bank information had changed. The victim was tricked into sending $50,000 of the company’s money into a foreign account, never to be recovered. Capoccia himself has been used by fraudsters to try to trick employees out of money, too, he said.
Again, small businesses’ lack of digital expertise has entrepreneurs not only unsure of how to approach this issue, but sometimes unaware the problem exists at all. It’s the classic “you don’t know what you don’t know” conundrum, Capoccia explained.
“They didn’t get into their business to become experts” on cybersecurity, digital reputation and other matters of IT, he said. “They don’t have a lot of great resources to identify where they should spend time. After a 12-hour workday, they’re not going to pop open Google and research, ‘What are the threats to my business?’”
For service providers like Womply, which recently announced the launch of BizShield to address both the management of digital reputations and the cybersecurity challenges that SMBs face, a lack of awareness among entrepreneurs is a challenge, too, with few business owners actually seeking out these services.
The company’s initial strategy with BizShield was to introduce the service via its network of financial services partners, which would then connect their own small business customers to the tool. With the wide release of the solution, Womply says small businesses must be more informed – not only about the opportunities in digital solutions, but also the threats that their companies will face, and how to address them.
Indeed, while the customer-facing side of the digital reputation and the back-office side of cybersecurity are two very different beasts, there is certainly a connection between the two as SMBs make progress in their digital journeys. Both should be considered by entrepreneurs, whether they’re establishing more sophisticated customer engagement analytics solutions or setting up their first business websites.
“There is definitely a relationship,” between the two sides, Capoccia said. “If a business were to fall subject to a breach or phishing scam, and their customers were impacted, you can be sure that would surface in the online reputation of the business. Common logic suggests the two are tightly related.”