Old Customers, New Markets 2012 Focus for Kiwi Businesses

Media release: 24 January 2012

Old Customers And New Markets Focus for Kiwi Businesses in 2012
• Business’ top ten priorities for 2012
• Marketing and advertising spend to move online

Businesses are planning to focus on customer satisfaction and growth in new markets in 2012, according to the latest MYOB Business Monitor.

The MYOB Business Monitor surveyed over 1000 business owners around New Zealand on their approach to business in 2012.

MYOB general manager Julian Smith says the tough trading conditions of the past three years have highlighted how important it is to keep existing customers happy, while being constantly aware of new opportunities.

“The most popular strategy for businesses in 2012 is customer retention,” says Julian Smith.

“This speaks volumes about the way business owners are structuring their business, and gearing them to be more service focused and proactive in keeping their existing customer base.”

More than one-third (35%) of business owners surveyed expected customer retention activity to increase in 2012. Business owners who expected to put most effort into this strategy were much more likely to be a medium (73%) or small (56%) business; to have an annual revenue of $1-5m (57%); and to have a business website (53%, compared with 26% without a website).

“During the recession, business owners became all too aware of how hard won every new customer was,” says Julian Smith. “This new focus will actually make us more responsive and more competitive as an economy.”

Top 10 priorities for Kiwi businesses in 2012 | MYOB Business Monitor

1. Focus on customer retention strategies – 35% of businesses
2. Increasing business activity in new markets – 33%
3. Focus on customer acquisition strategies – 31%
4. Increasing the number of products or services offered by the business – 27%
5. Sales of products / services offline – 27%
6. Sale of products / services online – 25%
7. Increasing spending on online marketing & advertising – 23%
8= More sales promotions – 22%
8= More investment in IT systems & processes – 22%
10. Increasing salaries & wages – 20%

The second most popular strategy for 2012 is new market growth, according to the survey. One-third (33%) of business owners expected to increase the activities of their business in new markets.

Business owners most likely to focus on expansion of their business were predominantly in the Finance and Insurance sector (54%), and the Manufacturing and Wholesale sector (46%); and had a business website (52%, compared with 24% without a website).

While a majority (57%) of business owners said they would not change their product or service offering, a significant 27% intended to extend their range. This was led by those in the Manufacturing and Wholesale sector (47%), and those who had a business website (40%, compared with 21%).

Julian Smith says the trend towards diversifying into new markets shows Kiwi business owners are looking at opportunities beyond the current, constrained performance of the local economy.

“Again, this trend towards a broader mix of products and new markets will position the whole country well for the future,” says Julian Smith.

“Most importantly, as we face such uncertainty in the international economic situation, it is extremely heartening to see that Kiwi business owners are increasingly determined not to be exposed to a single market, or offer a narrow range of products and services.”

Mr Smith says New Zealanders are also recognising the importance of the digital economy and finding ways to use the internet to engage both local and international markets.

“We are continuing to see the benefits of owning a website, and the additional advantages of using e-commerce sites to drive sales. In particular, promoting your business online – where more than two thirds of consumers now do their initial research into a product or service – makes it a lot easier to acquire and retain customers, while introducing new products or services.”

In the latest MYOB Business Monitor, one quarter (25%) of business owners hope to increase online sales. The businesses most strongly focused on online sales are in the Manufacturing and Wholesale sector (42%) and in the Retail and Hospitality sector (41%). Two-fifths (41%) of all businesses say they are likely to use their website to drive offline sales.

The internet is also becoming the dominant media for advertising, with more business owners intending to increase marketing and advertising spending online than offline in 2012.

Just under one quarter (23%) of business owners expected to increase their online advertising and marketing spend, compared with one-fifth (19%) who expected to spend more offline. Those who were the most focused on online marketing and promotions are in the Retail and Hospitality sector (43%); or own a business in Christchurch (32%).

Around one-fifth (22%) intend to invest in IT systems and processes in 2012. The most likely were in the Finance and Insurance sector (45%); the least likely were business owners in the Transport and Warehousing sector (12%) and Construction and Trades sector (15%).

“With a bullish growth strategy, the financial sector is focused on investing in the IT resources to support significant expansion,” says Mr Smith. “Minimising the amount of time spent on business systems enables these companies to channel that resource into customer retention and acquisition.”

However, the investment plans of New Zealand business owners won’t flow through the whole country immediately, according to the MYOB Business Monitor.

“While, we can expect to see a period of business growth over the next twelve months, this is unlikely to be reflected in the labour market,” says Julian Smith.

“Only one in nine (11%) business owners intend to increase the number of full-time staff, with 66% indicating this aspect of their business would stay the same. Only one in six (17%) said they would increase part-time staff. However, 20% of business owners are intending to increase the amount they pay their staff.”

ENDS

About the MYOB Business Monitor
The MYOB Business Monitor is a nationwide survey of over 1,000 Kiwi business owners, across a range of small and medium businesses, from sole traders to mid-sized companies, and representing the major industry sectors. It is designed to research key areas of business performance, including profitability, cash flow and pipeline work, as well as business confidence. The last round of research was completed in Q4, 2010.

About MYOB
MYOB is a leading provider of business management solutions that have helped more than a million businesses in Australia and New Zealand. MYOB serves businesses of all kinds and sizes, delivering software and services that simplify accounting, payroll, client management, websites, and much more. With a network of more than 20,000 accountants and other professional partners, MYOB provides the tools and support that help make business life easier. For more information visit the MYOB website at www.myob.co.nz Today, MYOB is extending its solutions online and delivering innovation through cloud computing, enabling clients to make smarter connections with their business partners and customers. Visit www.myob.co.nz/smarterconnections.

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