UK SMEs eye growth but struggle to keep pace with AI

UK small and medium-sized businesses are broadly confident about meeting their growth targets over the next year but face mounting pressure from economic uncertainty, fast-changing customer behaviour and gaps in marketing skills, according to new research from The Marketing Centre.

The latest CMO Outlook survey of UK SMEs found that a majority expect to hit their 12‑month growth goals. At the same time, 53% cited economic uncertainty as a major constraint. Respondents also reported rising customer expectations and widening internal capability gaps as further brakes on performance.

The research indicates that many teams are struggling to keep pace with shifts in buyer behaviour. Customer behaviour is changing more quickly than many marketing functions can respond. AI emerged as the single biggest driver of change, named by 38% of respondents.

Ian Webb, Chief Marketing Officer at The Marketing Centre, said the findings pointed to a mixed picture of ambition and strain across the SME sector. "In short, SMEs are adapting, but not fast enough. More than half say their marketing response to 2025's challenges is only moderate, and only a minority believe they're using AI effectively. In fact, 68% admit that their biggest barrier to adopting AI is simply a lack of understanding, a stark contrast to the old assumption that the hurdles were mostly about cost or resources," said Webb.

The survey suggests that many SMEs still rely on intuition and legacy processes in their marketing decisions. Respondents reported that customers are researching earlier in the buying cycle, demand more evidence and expect seamless experiences across channels. Businesses that fail to adapt risk falling behind these changing buyer expectations.

Data foundations

The data points to a widening gap between SMEs with clear commercial ambitions and those held back by internal issues. These include unclear strategies and internal politics that slow down decision-making. The report concludes that marketing leaders need to move away from a campaign‑first mindset and adopt more structured, system‑driven approaches.

The Marketing Centre links future growth with stronger data foundations and more disciplined planning. It states that SMEs with a clear view of their numbers make better decisions about where to invest and how to measure returns. Reporting frameworks that show what works, what does not, and where the next opportunity lies are described as central to this shift.

The survey highlights four factors that respondents expect will define successful SME growth by 2026. These are agility, cited by 22%, AI integration, also at 22%, clear positioning, at 11%, and customer intimacy, at 14%. The research frames these areas as central elements of a more structured and accountable marketing approach.

AI as inflection point

AI sits at the centre of many of the changes reported in the study. AI is described as the largest single driver of change in customer behaviour and marketing practice. Yet most SMEs say they lack a practical understanding of how to apply it in day‑to‑day work.

The Marketing Centre's guidance urges SMEs to view AI as a practical tool. It recommends that businesses identify two or three immediate, high‑impact uses where AI can either save time or improve the quality of output. It frames incremental, hands‑on adoption as a way to create a real competitive edge rather than treating AI as a distant, long‑term project.

The survey also underlines the importance of leadership alignment around AI and broader marketing priorities. It states that agreement at leadership level on commercial goals and marketing's role makes execution faster and clearer across the organisation.

Six‑point guidance

In response to the findings, The Marketing Centre has set out six areas of focus for SMEs planning for 2026. The first is strengthening marketing foundations before increasing spend. This includes revisiting the value proposition, tightening the customer experience and investing in systems that create a single source of truth for data. The report argues that efficiency and clarity start with structural basics.

The second area is getting closer to data. The guidance states that businesses which understand their numbers make better decisions. It calls for reporting frameworks that give a clear view of performance and support future investment choices.

Third, the guidance advises that AI should be treated as a practical tool with immediate uses. It recommends focusing on specific, near‑term applications that save time or lift quality, rather than large, abstract projects.

The fourth recommendation is a commitment to consistent marketing. The Marketing Centre advocates a steady rhythm of activity across each quarter. It links consistency with stronger demand generation, higher trust and a more predictable pipeline, particularly under economic pressure.

Fifth, the guidance emphasises leadership alignment. It calls for agreement on commercial priorities and on the contribution expected from marketing. The report states that clear alignment makes execution more effective across the whole business.

The final area is a modernised view of the customer journey. Buyers are researching earlier, comparing more options and seeking low‑friction experiences. The Marketing Centre advises SMEs to simplify the steps customers must take and make it easier to understand the services on offer.

In a concluding assessment, Webb said the coming period would favour SMEs with disciplined planning and a more mature use of data and technology.

"If SMEs want to thrive in 2026, they need to get their house in order. Strengthen the basics, understand their data, use AI where it actually moves the needle and stay consistent. The businesses that will thrive are the ones who are bringing clearer and smarter plans to the table," said Webb.