ACCELERATING GROWTH

The playbook to reach Next Gen SMB owners

Leverage new data-driven insights to capture the small businesses driven by Gen Z and young Millennials

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Small and medium businesses make up 70% of global gross domestic product.¹ And a large portion of these up-and-coming small businesses are driven by Gen Z. As older SMB owners retire or graduate to other pursuits, financial institutions (FIs) must pivot to serve the unique needs of Gen Z business owners. Predicted to reach 30% of the global workforce by 2030,² this segment represents a significant market opportunity.

It’s time to rewrite the SMB playbook

The playbook used to attract and retain existing small business owners may not work with the next generation of SMBs. Gen Z and young Millennial decision-makers ages 18–36, or Next Gen SMBs, have different research habits and unique service preferences, and they need FIs that can deliver on them. From leveraging social sales channels to accessing funding without established credit, this new generation of business owners is rewriting the rules for how FIs can best equip SMBs for financial success.

Next Gen SMB owners use social media to inform many of their business decisions

49 %

use social media to educate themselves about business and finance

58 %

communicate with their customers through social channels

70 %

promote their business on social media

Social marketplaces require social savvy

Visa’s latest study on Next Gen SMB owners use social media to inform many of their business decisions, often forgoing traditional web searches and expert advice. In fact, 49% of surveyed Next Gen SMB decision-makers use social media to educate themselves about business and finance, with 41% using social media as their primary information source.³ While online searches are still more popular with older decision-makers, only 38% of younger small business owners rely on them as their primary source of business information. And decision-makers aren’t just leaning on social media for information. An impressive 70% promote their business on social media, and 58% communicate with their customers through social channels.³

How does the current trend toward social affect your strategy? Just as businesses in the early 2000s had to shift from print ads to digital marketing tactics to reflect the rise of the digital marketplace, FIs today need to reach Next Gen business owners on the platforms they know. Those that target Gen Z and young Millennial business owners via authentic campaigns catered to platforms like Instagram and TikTok are more likely to gain loyalty, and traction.

Global savvy drives cross-border growth

The trend toward cross-border sales also continues to rise. Surveyed Next Gen SMB owners reported that 20% of their online sales are international1 and they spend 27% of marketing dollars internationally compared to 24% among their older counterparts.³ The rise of digital marketplaces means a heightened need for cross-border solutions that help businesses meet customers’ needs.

A blend of digital and in-person relationships

Visa’s study shows that despite their digital foundations, 56% of Next Gen business owners want a personal relationship with their bank and 44% want their bank to check in with them periodically to see if they need assistance.³ They’re looking for a personal experience—a need FIs can address.

Tapping into the spending potential of Gen Z

When it comes to targeting Next Gen small business owners, understanding and meeting their needs can lead to big payoffs, and sticking to traditional strategies can cost you.

While some traditional banks have struggled to effectively understand and empower these younger business owners, there’s never been a more critical time to make it happen. By curating your offerings to their needs and industries, you can tap into their spending potential today, tomorrow and in the future.

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