Small and medium-sized businesses are struggling to keep on top of their marketing strategies both online and offline, according to new research commissioned by Microsoft.

The study found that 84% believe marketing is becoming more challenging due to the growing complexity of customer needs and revealed that most businesses are ill-equipped to cope with these demands.

Nearly three-quarters of those polled (74%) admitted using unsophisticated customer relationship management (CRM) tools in an attempt to deal with customer needs while an alarming 90% admitted they needed to get a better understanding of customer requirements.

Fewer than a quarter of respondents felt they were able to monitor purchasing methods or spending levels from customer audits, meaning they were missing out on marketing opportunities to new customers and servicing their existing customer base.

“This research highlights how organisations are badly prepared to face not only their current but also their new business challenges,” said David Thorp, head of research and information at The Chartered Institute of Marketing (CIM). “A new approach needs to be taken to ensure organisations keep on top of their existing and prospective customer relationships.

“Companies need really good tools, coupled with effective integration across marketing, sales and services, to help them understand the customer dynamics of the new medium and not just a vague understanding that everything is changing,” he added.

The research also revealed that companies are failing to make the most of the power of the internet from a marketing perspective. Over half (61%) of firms claimed they saw the internet as an important or critical marketing tool but just 15% said they believed they were using it to the full.

The most common online marketing strategies were online advertising (used by 57%), e-direct mail (49%), website e-news sponsorship (44%) and search engine marketing (36%). Yet just 26% of sales teams have the necessary processes to capture sales leads from databases, the research showed.

“The findings of this research underline the importance of establishing a solid platform for understanding all of a business’ customer relationships, both online and offline,” said David Rodger, group manager, business segment marketing, at Microsoft.

“As the customer landscape changes, due to this increasing variety of choice, it becomes imperative that businesses have the ability to address customers’ changing expectations and build new competitive advantage by developing marketing strategies that supports sales,” he added.