Running a small business right now is no walk in the park. Rising costs, inflation, and supply chain problems are squeezing budgets. Throw in political uncertainty, shifting trade policies, unpredictable consumer behavior, and more competition than ever, and simply making it through the week can feel like an accomplishment.
But if there’s one thing small business owners know how to do, it’s adapt. The latest Small Business Now: Growth in Motion report from Constant Contact surveyed more than 1,600 entrepreneurs across the U.S., U.K., Canada, and Australia. The results paint a picture of resilience, creativity, and a willingness to experiment with new tools—especially social media, artificial intelligence (AI), and automation.
Small Businesses Are Leaning Hard on Social Media
Entrepreneurs are using social media more than any other marketing tool. It’s cheap (if you avoid paid ads), direct, and reaches customers where they already spend their time. According to the study:
- 63% of new small businesses rely on social media as their main marketing channel.
- 54% plan to keep it as their top marketing method in 2025.
- 73% say social media (both paid and unpaid) drives the most revenue.
But there’s a growing awareness that social media alone isn’t enough. Algorithms change constantly, organic reach isn’t guaranteed, and ad costs keep climbing. Many business owners are looking for ways to balance their approach.
Email and SMS: The Hidden Goldmine
Some entrepreneurs are realizing that relying solely on social media is risky. Email and SMS marketing might not be as trendy, but they offer something social media doesn’t—direct access to customers without an algorithm standing in the way.
- 33% of small business owners see email as an underused tool for lead conversion and customer retention.
- Only 15% are using SMS marketing, despite its high engagement rates.
This shift shows that small business owners are starting to mix up their marketing playbook. Social media can bring people in, but email and SMS keep them engaged and spending.
AI and Automation Are Changing the Game
Technology is no longer a luxury—it’s a necessity. Small business owners are tapping into AI to help with marketing, customer insights, and efficiency.
- 91% of new business owners say technology has been critical to their success.
- 72% plan to use AI in their marketing strategy this year.
- The most popular uses for AI include:
- Content creation and brainstorming (37%)
- Customer data analysis (32%)
- Personalized marketing (31%)
Business owners who feel most confident about their future are the ones already using AI. They’re leveraging automation to speed up processes, make data-driven decisions, and personalize customer interactions.
Small Businesses Are Optimistic—But They Know the Road Ahead Won’t Be Easy
Despite the economic rollercoaster, most entrepreneurs remain hopeful. Nearly half (45%) expect their business to grow this year, but 55% admit they’re feeling the pressure from external challenges.
- 35% believe economic conditions will significantly impact their success in 2025.
- 52% said getting their business off the ground was tougher than expected.
- 27% felt overwhelmed in their first few years.
- 95% say they’d do it all over again.
That last stat speaks volumes. Even with all the stress, unpredictability, and long hours, most business owners wouldn’t trade it for anything.
The Small Business Playbook for 2025: How to Stay Competitive and Grow
With economic pressures, rising costs, and increasing competition, small businesses must be more strategic than ever. Constant Contact’s Small Business Now report provides clear insights into what’s working. The most successful entrepreneurs are prioritizing customer retention, expanding their marketing mix, and leveraging AI to work more efficiently.
Let’s break down what these strategies mean in practice.
1. Focus on Customer Retention: Keep the People Who Already Love You
Winning new customers is great, but keeping the ones you already have is even better. Studies show that acquiring a new customer can cost five times more than retaining an existing one. That’s a big deal for small businesses working with limited resources.
Why Retention Matters
- Loyal customers spend more over time.
- Repeat buyers are easier and cheaper to market to.
- Word-of-mouth marketing grows when customers love their experience.
How to Keep Customers Coming Back
Personalization makes a difference. Customers want to feel valued. Whether it’s a birthday discount, personalized email recommendations, or remembering their last purchase, small touches make an impact.
Loyalty programs encourage repeat business. Points, rewards, and VIP perks give customers a reason to stick around. The key is making it simple—complicated reward systems drive people away.
Customer service sets businesses apart. Fast responses, easy returns, and genuine human interaction make a lasting impression. Whether it’s a chatbot for quick answers or a personal email check-in, customers notice the effort.
Consistent engagement strengthens relationships. Regular email updates, SMS alerts, and interactive social media posts help businesses stay connected without overwhelming their audience.
Retention isn’t just about keeping customers. It’s about turning them into long-term advocates who promote the business to others.
2. Diversify Marketing Channels: Don’t Rely on Just One Platform
Social media is still the go-to marketing channel for most small businesses, but putting all your focus there is risky. Algorithms change, ad prices fluctuate, and organic reach isn’t guaranteed. The businesses that are winning in 2025 are balancing their approach with other direct-to-customer marketing methods.
Why Diversification is Key
- Social media reach is unpredictable. One algorithm tweak and your audience might stop seeing your posts.
- Email and SMS offer direct access. No middleman, no restrictions—just your message in front of your customer.
- Customers have different preferences. Some like Instagram, others prefer email. Covering multiple touchpoints increases the chances of engagement.
How to Expand Beyond Social Media
Email marketing brings in results. Social media builds awareness, but email closes the deal. A well-timed email can bring customers back to complete a purchase, remind them of an abandoned cart, or offer a special promotion.
SMS has incredibly high open rates. Unlike emails, which sometimes go unread, text messages get opened 98% of the time. Businesses that use SMS for flash sales, appointment reminders, or VIP announcements see quick results.
A mix of channels creates a stronger brand presence. Customers might see a business on Instagram, get an email about a sale, and later receive a text with a discount code. Businesses that combine these channels effectively create a seamless customer experience.
Marketing is no longer a one-size-fits-all game. Small businesses that spread their efforts across multiple channels will have a much stronger chance of staying top of mind.
3. Use AI to Work Smarter, Not Harder
AI isn’t just for big corporations anymore. Small businesses are using it to automate tasks, analyze customer data, and improve marketing—without needing a tech team.
Why AI is a Small Business Lifeline
- Saves time by handling repetitive tasks.
- Improves marketing performance by analyzing trends and suggesting improvements.
- Enhances customer experience with more relevant interactions.
How Small Businesses Are Using AI in 2025
Content creation and brainstorming are getting easier. AI tools help generate blog ideas, write email copy, and create engaging social media posts.
Customer data analysis provides deeper insights. AI examines buying patterns and customer behavior, giving businesses data-driven recommendations they wouldn’t have noticed on their own.
Personalized marketing increases engagement. AI-powered email tools customize subject lines, recommend products, and send messages at the exact right time for each customer.
Automation simplifies everyday tasks. Scheduling, invoicing, and other administrative work can be handled by AI, freeing up business owners to focus on growth.
AI isn’t replacing human creativity—it’s making small businesses more efficient. Those who adopt it early will have an advantage over competitors still doing everything manually.
The Playbook in Action
The smartest small businesses in 2025 are playing offense, not defense. They’re strengthening relationships with existing customers, expanding beyond social media, and using AI to maximize efficiency.
Here’s a simple action plan based on the report’s findings:
Make retention a priority. Treat existing customers like VIPs, and they’ll stick around.
Mix up your marketing. Balance social media with email and SMS to stay connected.
Let AI handle the heavy lifting. Use automation to save time and improve marketing.
By focusing on these strategies, small businesses can set themselves up for long-term success—no matter what challenges 2025 brings.
