A substantial majority of SME owners, 70%, are engaging with social media platforms, with 13% having collaborated with an influencer to boost their business growth. This figure rises to 29% among entrepreneurs aged 44 or younger, indicating a shift led by the younger generation of business owners.

However, a significant portion of small businesses might be overlooking a chance to enhance sales by not incorporating influencers into their marketing strategies. Among those who have employed influencer marketing, 88% reported a beneficial impact on their business.

Guidance for SMEs on Engaging with Influencers

For businesses that have utilised influencer marketing, the reach of an influencer within their local community is a key consideration. Nearly half (48%) of SMEs emphasized the importance of an influencer's follower count when choosing to collaborate.

Additionally, 42% of SMEs with experience in influencer marketing valued the relevance of the influencer to their business and their geographical proximity as crucial factors in their selection process.

Conversely, SME owners hesitant about influencer marketing cited concerns including doubts about its effectiveness in driving sales (48%), issues with authentic representation (30%), and the high costs associated with it (18%).

The Rise of TikTok in SME Marketing

iwoca's research also points to a notable shift in the social media strategies of small businesses, particularly with the rapid adoption of TikTok. Despite nearly half of the small businesses (45%) maintaining a consistent marketing approach over the past decade, TikTok's usage has seen a significant increase, tripling since 2021.

Now, 29% of UK small business owners aged 18-44 are using TikTok to connect with their audience, a sharp rise from just 10% in 2021, showcasing the platform's growing importance in contemporary marketing strategies for SMEs.

Paul Sherratt, Founder & CEO of Glove Glu uses influencers to connect with his core audience both on TikTok and other platforms. He said: “Don't hesitate to work with influencers. If you select the right one they will open up a dialogue and real connection with your audience that will enhance everything that you do across the marketing mix.

“They not only provide a greater reach, but also allow us to connect with a slightly different brand voice and to a slightly different audience.”

Paul Blair, Director of Liverpool’s Hot Water Comedy Club, has never used an influencer, but has managed to build a large following for his business. Paul shared his insights into social media success: “We were already very visible on all other social channels and we reluctantly set up a TikTok account with an initial target of 1.2m followers - which was what the most followed comedy club in the world had. But we ended up with over 2m followers within a year!

“Consistency is key with TikTok. Post every single day and don’t miss one. Keep your content on brand and recorded to a high standard.”

Harry Newberry, a micro-influencer working in the food and drink space shared his advice for SMEs: “Finding the right influencers can be tough. I’d recommend small businesses start by exploring relevant hashtags on platforms like Instagram, Facebook, and TikTok. Working with businesses that align with both your personal brand, and the community you have created is extremely important. People will see through a brand collaboration that focuses on personal gain rather than informative content.”

Mark Di-Toro, iwoca’s Communications Director added: "Unlocking the potential of social media influencers can have a positive impact on your growth. However, tread carefully. For SMEs, the secret lies in tapping into the high-quality micro-influencer niche. These influencers boast genuinely engaged followers, offering a more authentic connection to your brand and products.

“Always do your research and seek guidance when identifying your preferred online partner. If done well they could be a great way to elevate your profile and boost sales."

5 tips for effective influencer collaboration:

1. Know your social audience: Understand your online audience to select an influencer aligned with their preferences, behaviours, and interests.
2. Embrace experimentation: Try new approaches that resonate with your audience without dismissing niche influencers too quickly.
3. Consider micro-influencers: Prioritise relevancy and proximity to maximise the impact to your business - big follower numbers aren’t everything.
4. Keep it consistent: Ensure influencer partnerships fit your content strategy to reinforce your brand identity.
5. Utilise your own influence: Compliment your influencer-created content by sharing your own expertise to establish credibility within your space.