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Digital Transformation: Why Treat Consumers & SBO Customers Differently (and How)

Ever since COVID changed everything in early 2020, digital has been at the forefront of our approaches to problem solving. From efficiently tracking and communicating case numbers, to keeping our children in some version of school, to getting our groceries delivered to our cars, etc. etc. etc., tech has played a critical role. One would be hard pressed to think of anyone who within the last year has not become more dependent on digital.

However, one size / one digital solution does not fit all. Obviously individuals within a group have varying needs, capabilities, and risk tolerance levels that impact each person’s acceptance and speed of adoption. In addition, one single individual may require multiple solutions depending on which of the various roles they are in (consumer roles like parent or spouse - or business owner). In other words, the same person can be a different type of decision maker and therefore a different type of customer in the eyes of a corporation.

Over the course of 2020 and early 2021, Phase 5 conducted several studies of both consumers and SBOs (Small Business Owners), capturing data and revealing insights about the attitudes, behaviors, and needs of each group. One of many findings that became clear was the distinction between consumers and SBOs in terms of their attitude toward the digital transformation currently happening all around us.

While one person may fit into both of the above groups, their needs from the larger organizations that serve them can be quite different depending on which hat they are wearing: the consumer hat or the small business owner hat. It is in the best interest of enterprise marketers to recognize these differences in order to adjust messaging, delivery, and servicing accordingly. Read on for examples of the contrast, as well as recommended actions for corporations across three specific sectors: Telecommunications, Logistics, and Financial Services.


The following are events in a random day in a fictional consumer’s life from early 2021:

(a) Roll out of bed, (b) *coffee*, (c) help kids get ready for online school (multiple snacks, multiple workstations, multiple screens), (d) login to a virtual meeting, (e) manage interruption from kids, (f) repeat steps (d) and (e) until 5pm, (g) text neighbor regarding COVID protocols, (h) order & eat dinner, (i) zoom call with friends, (j) go to bed.

Between 6 and 8 of the 10 activities above would have used technology and some sort of screen. If the technology and/or connection didn’t perform as expected, the resulting environment is unlikely to have been quiet and calm, and there may not have been any IT support team to call for help. It’s no wonder “zoom fatigue” is a real thing. Consumers like this one could use more “downtime”, figuratively speaking.

As they continue to balance the ongoing demands of the past year, more than ever consumers need standard telecommunications solutions that are straightforward and simple. They are tired of living virtually, and they may lack the mental bandwidth to research alternative solutions. Furthermore, if the household (not business) wi-fi is spotty one afternoon and family members need to find alternative off-screen activities, there will be minimal downstream financial consequences (and perhaps even some upside and fresh air).

Consider in contrast the telecommunications needs of a small business. Yes, the owner’s time is also very likely stretched, and of course he or she still expects great service. However in this case, system down time could be fatal to the business, and consequently to the owner’s and employees’ livelihood. In many cases, a small business owner simply can’t afford the poor customer experiences and lost business that would result from downtime. As a result, they may be willing to invest more resources upfront exploring solutions that will best fit their business needs, and may want to learn about new or added services to help them take advantage of competitive opportunities.

In Phase 5’s study of >500 SBOs with Cargo in 2020, business owners indicated that they were “adjusting to shifting needs”, “learning new capabilities,” and “attacking rapidly” to stay afloat. 63% were planning for more online business, and 42% planned to digitize their operations and businesses. The overwhelming sentiment was that they have been working hard and moving fast to figure out the best solutions to maintain (or save) their operations. And while it may require more of their precious time and resources, these driven small business leaders could often use more customized products, services, flexibility, and responsiveness from their corporate suppliers to ensure that no opportunity is missed.


Home delivery, curbside pick-up, and contactless service are all words that have become part of our daily vernacular. And while the anxiety-driven need to stockpile toilet paper is hopefully behind us, the way we source and procure household staples has certainly changed.

In Phase 5’s State of CX 2020 report, consumers reported that when compared with (a) customer-supplier relationship, (b) effort required, and (c) cost/value, the most impactful part of their customer experience (by a factor of up to +450%) was to get the “basics” right. In other words, consumers have expectations about the product or service they are purchasing, and the most important thing for a supplier to do to obtain their loyalty, before going “above and beyond”, is to deliver on those baseline expectations.

Those basics are different now than they were a little more than a year ago. In addition to product/service quality, consumers expect and need reassurance of a thoughtful and safe buying experience. Their households may include seniors, immune-compromised adults, or infants to name a few vulnerable groups. Understandably they may be more cautious and risk-averse, putting health, safety, and comfort first in all of their buying decisions.

As consumer mindsets shift, small businesses are looking for creative ways to serve these customers while remaining profitable, and support from their enterprise level suppliers could make a difference. At the time of the 2020 Phase 5 / Cargo SBO study, 83% of businesses had been negatively impacted by the pandemic, but 58% were “optimistic about the future of their business." Many have had to change from “high touch” to “low” or “no-touch” environments, re-inventing their pick-up and delivery systems and leaving no room for supply chain errors.

Health and safety remains a priority to everyone, but business owners have had to take risks and push the envelope in terms of logistics in order to stay in business. They have been innovative, agile, and responsive, and they need the same from their B2b suppliers. Margins for error have shrunk so reliability matters more than ever. Furthermore, the rules keep changing so the ability to pivot is critical as well. Logistics enterprises serving SBOs might consider reallocating resources to innovation and contingency management in order to maintain reliability as well as agility for their customers.


Prior to 2020, the financial services industry was already somewhat established in the digital world. It offered online, mobile, or smartphone banking services that enabled anyone with an internet connection or a phone to do their basic bill payments and account management from the comfort of their home. That said, not everyone opted to manage their finances using digital tools. Branches and in-person appointments were still preferred by some.

Of course with the pandemic, more consumers have been required to shift to digital banking, a move that has pushed some people outside of their comfort zone. In Phase 5’s study of COVID-19 and the Changing Financial Consumer, the data showed that respondents aged 55+ are 10-20% less comfortable with this shift, especially with specific transactions that involve showing identification, or getting financial advice. One of the study’s recommendations for consumer financial services organizations is to recognize these different segments in order to ensure that segment-specific service and support options are in place.

Phase 5 also presented a webinar in 2020 entitled Creating a Better Small Business Banking Experience, and one of the key takeaways was that “banking transactions are increasingly handled through digital channels, but personal contact remains important.” Unquestionably the speed and convenience of digital tools are needed and expected by SBOs, but this study’s findings demonstrate how personal contact tends to have a substantial positive impact on the customer experience.

The opportunity for financial institutions is in “identifying the points at which personal touch adds value, and designing a digital experience that incorporates personalization and a human touch <even if by phone or email> at the right stage and time.” Note that 66% of SBO respondents from the Phase 5 / Cargo study “feel their business model will change or evolve because of the pandemic.” One can understand how a person to person conversation might be warranted in this case especially.

Incidentally, one of the elements that both consumers and SBOs seemed to share was the desire for more proactive communication from their financial institutions. At one point during the early months of the pandemic, 45% of SBO respondents reported that they had received no offers of support from their bank. Similarly, just 32% of consumer respondents gave their bank “top 2 box” marks for performance on “proactively communicating with me.” These responses suggest that technology can be better utilized by FIs to provide relevant, personalized communications to both segments of customers in a timely, efficient (and genuine) manner.


Even though small business owners are also consumers at some point, the two customer types have different needs and expectations when it comes to the use of digital tools and services in their daily lives. Their priorities, risk tolerance, and what is at stake can vary broadly. At the same time, there are some consistencies between the groups, including the need for an appropriate balance of technology and human touch, as well as the need to be informed and supported through timely communication from service-providers.

For the enterprises that serve both consumers and small businesses, market research and data analytics can help to understand and recognize key differences, thus enabling organizations to provide better service and value to each segment, and consequently generate customer loyalty and grow business. Analytics can also identify when a single customer is both a consumer and a small business owner, creating an opportunity to acknowledge customer value and loyalty through special treatment, further strengthening that important customer relationship.

Above are a just few examples of how consumers compare and contrast with SBOs with respect to digital transformation. More important than the examples themselves is the acknowledgement that the most successful enterprises work to understand their customers’ needs so that they can provide the right products, service, and support to meet those needs, demonstrate value, and create loyal, lifetime business relationships. Customer centricity is an imperative to business success; at its core is a better understanding of who that customer is, and what matters most to them.

Written by Steve Hansen

Steve Hansen, MBA, is the President of Phase 5 US and the leader of the firm's Data Analytics practice. With almost 2 decades of experience in client-side marketing strategy, market research, and product management, Steve brings a client’s mindset and drive for actionable results to each project. He has extensive experience in capturing the view “from the outside” with a special focus on product and service innovation. Steve is based in Minneapolis, Minnesota.