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Why 70% of SMEs ditch their digital marketing partner within a year

Digital marketing can be vital to the success of a small business yet one-in-three end up in a dispute with their provider, according to new research.

And almost 70% of small businesses last fewer than 12 months with the digital marketing provider they choose.

The high proportion of disputes and the large turnover in providers has prompted the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson, to release a best practice guide for small business to provide simple steps they can take to better match their needs and expectations with those of digital marketing service providers.

“The growth in disputes involving digital platforms and digital service providers has motivated us to provide a guide to preventative steps and better practice guidance that might help reduce the harm these disputes are causing,” Mr Billson said.

“Digital platforms have fundamentally changed the way in which small businesses connect and sell to their customers and enable them to reach a significant portion of Australian and international markets.”

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The Ombudsman commissioned a study by researchers at the University of the Sunshine Coast, which is among the first in the world to investigate the specific relationship challenges between small businesses and digital marketing service providers. This collaboration has produced the information checklists in the best practice guide for small businesses being released today.

The study found most of the disputes came from a mismatch in understanding what each party required. 

“A digital marketing service provider is a person or agency that you engage to help with your online presence. This may include branding, website, search engine rankings and marketing strategy that can help grow your business and brand,” Mr Billson said.

“But for too many small businesses this relationship can be unsatisfactory, and for one-in-three it ends in a dispute.

“Our guide gives small business actionable tips on receiving great service and building a real partnership with a digital marketing service provider.”

There is also a guide for digital marketing providers to better understand the needs of small businesses.

The study found digital marketing service providers often did not communicate risk; were not transparent with details about services, timeframes and results; and did not treat their clients as collaborative partners.

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It concluded that a lack of digital literacy among small business owners prevented them from proactively asking relevant questions about the services being provided by digital marketing service providers. Half of small businesses said that their providers pushed them to buy expensive and irrelevant services.

“Before you talk to a provider, identifying the assistance you need and what you want the provider to do and what you want to do yourself,” Mr Billson said.

“And when you talk to a provider make sure you understand exactly what they will do for you and at what times and that you are both clear on the cost, including any fees or other charges, and for how long the agreement will apply.”

The lead researcher at the University of the Sunshine Coast, Dr Karen Sutherland, said the common reason for relationships ending up in a dispute was a lack of open, informed and honest communication between small business and a digital marketing provider.

“There needs to be clear and honest communication about budget, the exact service being provided and setting realistic expectations for results,” Dr Sutherland said.

“Is the service for ad campaign management only? A website revamp? Who will own the website domain at the end of the contract? Will social media be required? If so, how much control will the marketing provider have over that social media account?”

“And most importantly, make sure everything that’s agreed upon is written into a contract.”

Dr Sutherland said a little due diligence from small business owners themselves can go a long way to avoiding problems. She said most marketing providers were not out to “get” business owners, rather it’s a matter of finding a provider that’s best aligned to your business.

“Different companies have different capabilities. Some are used to working with bigger clients, bigger budgets and will want more control over a business’ marketing content – and maybe that’s not a good fit for you or your business,” she said.

“So make sure you form a clear idea of what it is you want and research prospective companies before you engage with them. “Look at some of their previous work, reach out to former clients and see if it seems they seem like the right company for your needs.”

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