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2 ways your small business can innovate with affordable technology

You know your customers well and can be nimble, and your digital innovations can build on those small-business strengths.

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4 min read |
Picture of Kathy Kay.

Kathy Kay, executive vice president and chief information officer at Principal®

Listen: Kathy Kay talks about how small businesses can compete with technology at a scale that suits them.

View transcript

Sometimes when we get caught up in the throes of business disruption, we also get caught up in the illusion of a binary choice—all or nothing.

For instance, the pandemic pivot to remote work nudged some companies entirely online. Most of us, however, landed in a new hybrid reality. And modern hybrid work routines can look a lot different from one company to the next—or even from one job to the next within a business.

The same is true for technology. In my career before Principal®, I worked on the first OnStar systems in General Motors vehicles. Even as we unveiled a new technology, we still featured a button connecting drivers with a person for customer service. We found that after people pushed that button just once, they were comfortable with the idea and pushed the button all the time. That illustrated the obvious desire for maintaining the human touch within technology—but in a very intentional and focused way.

Even the smallest businesses can think about scaling up digital operations with a balanced approach, so it suits your unique business plan, budget, and customer needs.

1. Enhance your customer insight with incremental technology.

Yes, investment in business technology is booming. The Principal Financial Well-Being IndexSM survey of 1,000 employers released in August 2022 shows 56% of companies investing at least 34% of their expendable income on technology. But most of the business leaders surveyed—89% of them—also believe they must cope with at least a small digital learning gap in their organization.

That shows an overall statistical lack of confidence in digital transformation. But let’s flip this notion on its head.

Maybe you’re one of those business owners unsure of your company’s digital capabilities. Maybe you also feel you lack enough budget to make bold technology investments compared to larger competitors.

But as a small business, you likely have a finger on the pulse of your customers. And you can be nimble. Stop and rethink how you can flex and enhance these strengths with just enough technology to make a difference:

  • Invest incrementally: Expand your digital capabilities within budget while leaving room for the human touch that maximizes your close relationship with customers.
  • Think hybrid: How may a digital-human hybrid business process provide even more effective personalization for customers compared to entirely human or entirely digital?
  • Adapt roles, upskill employees: Adapt your human roles in customer service to fit the digital future—not abandon them to automation.

2. Try a ‘human interaction audit’ for your small business.

Conduct a “human interaction audit” from a few different angles:

  • Pinpoint: Where can the responsiveness and trust of human interaction in your business model boost the efficiency and scale of digital operations? Where can a person still outperform an algorithm?
  • Refine: Where can you remove—not add—pain points? Customers don’t want or need human interaction for everything, but when they do, they expect it to be seamless and available.
  • Personalize: Pay special attention to the first and final steps in your customer journey. Don’t assume the pandemic has pushed everybody to be 100% digital. The concept of trust doesn’t exist if you don’t have humans at the start and end of a business journey.

Keep the customer top of mind, stay nimble, and maintain the human touch you’re known for as small business as you escalate your digital game.

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