The Australian small and medium business (SMB) sector is entering 2026 facing a paradox. While business owners report high levels of confidence and ‘gold-standard performance, their customers are signaling a different reality.
According to the newly released Thryv 2025 Business Index and Consumer Report, a widening “Experience Gap” has emerged. For the modern entrepreneur, simply “doing a good job” is no longer sufficient; the new challenge lies in closing a 25% disconnect between business self-perception and actual customer sentiment.
Elise Balsillie, Head of Thryv Australia and New Zealand, comments, “When looking at the why behind the gap, it’s the details that are causing the divide. Where one in three SMBs believe they have a strong online presence, only 14% of consumers agree. When communicating with customers, SMBs focus heavily on email (68%) and phone calls (62%), however only 25% of consumers want to be contacted via phone call. This suggests that while businesses are using multiple channels for engagement, consumer preferences are more focused”.
Self-rating vs. reality
The 2025 data reveals that many Australian SMBs are viewing their operations through ‘rose-coloired glasses’, while consumers are increasingly encountering friction.
| The Metric | The Business View | The Consumer Reality | The Experience Gap |
| Online Visibility | 72% believe they are easy to find | 49% agree | -23% Point Drop |
| Service Consistency | 50% claim to be highly consistent | 25% agree | -25% Point Drop |
This isn’t merely a difference of opinion; it’s a strategic blind spot. While nearly three-quarters of businesses are confident in their visibility, more than half of their potential customers struggle to find them. The data suggests that in the 2026 landscape, “being online” and “being discoverable” have become two entirely different outcomes.
Balsillie advises, “There is a clear lag in SMB digital offerings vs what consumers expect – online stores, online booking and mobile-friendly websites are the top 3 features/offerings that consumers expect, but businesses are underdelivering in these areas and overdelivering in areas with less demand (e.g. live chat, social media updates).
The why behind the divide
Research indicates that this gap is driven by a combination of rising consumer expectations and businesses missing the mark on specific details. For instance, while one in three SMBs believe they have a “strong” online presence, a mere 14% of consumers agree.
Communication remains a primary point of friction. SMBs continue to rely heavily on traditional channels, with 68% favouring email and 62% using phone calls. Balsillie says, “The research shows the importance of a nuanced communication strategy – 60% of Australian consumers prefer a different frequency depending on channel (e.g. how often they are contacted via email vs. sms). Tailoring communication efforts to these preferences can help SMBs avoid over-communication and create stronger customer relationships.
The phygital friction and the UX barrier
Australian SMBs are leaning into the ‘phygital’ shift—merging physical service with digital tools—yet the report indicates that these investments are failing to hit the mark for the end-user.
A clear lag exists in digital offerings: online stores, online booking, and mobile-friendly websites are the top three features consumers expect. Currently, many businesses are under-delivering in these critical areas while over-delivering in low-demand categories like live chat and social media updates.
Visibility blind spots
Balsilliehighlights a notable mismatch between where businesses think they are found versus where customers actually look:
- Business strategy: 50% of SMBs prioritise Facebook, followed by their company website (45%) and Instagram (37%).
- Consumer behaviour: 43% of Australians discover small businesses through organic online searches, with 35% using social media.
This highlights the need for SMBs to move beyond social media silos and focus on broader searchability and local community presence.
Efficiency vs. convenience
Is new technology being used to solve business problems or customer problems?
“The data does suggest that investment is more weighted towards solving business problems versus improving customer experience. This internal focus is reflected in the types of software adopted, which are dominated by accounting (48%) and payment processing (44%), rather than tools designed to smooth the customer journey. On the other hand, only 37% is invested in technology to enhance customer interactions, and only 31% sought to drive repeat business”, says Balsillie.
The Thryv 2025 report underscores a critical inflection point for Australian SMBs. While revenue growth and operational resilience remain high, the emergence of a 25% “Experience Gap” indicates that internal efficiency has historically taken precedence over external customer convenience. As 2026 progresses, the report suggests that long-term competitiveness will no longer be determined solely by the quality of a product or service, but by a business’s ability to align its digital infrastructure—specifically in visibility, communication, and UX—with actual consumer behaviour.
