Current issue
Modern Management Systems
Topics of next issues
Current issue
Archive
About the Journal
Editorial Office
International Scientific Board
Reviewers
Open Access policy
Indexation
Publisher
Journal revenues
Publication Ethics and Malpractice Statement (PEMS)
For authors
Procedure securing the originality of the publication
Principles of developing a scientific publication
Review procedure
Rules for submitting articles
Fees
For reviewers
Ethical standards
ORIGINAL PAPER
Digital transformation and its influence on sales growth, customer satisfaction, and retention among SMEs in Ondo State, Nigeria
1
Elizade University, Ilara-Mokin, Nigeria
2
Fountain University, Osogbo, Nigeria
3
University of Agriculture Faisalabad, Pakistan
A - Research concept and design; B - Collection and/or assembly of data; C - Data analysis and interpretation; D - Writing the article; E - Critical revision of the article; F - Final approval of article
Submission date: 2025-11-24
Acceptance date: 2025-12-09
Online publication date: 2026-02-28
Publication date: 2026-02-28
NSZ 2026;21(1):89-118
KEYWORDS
ABSTRACT
Research objectives and hypothesis/research questions:
The aim of this study is to determine the impact of ongoing digital transformation on the performance of SMEs in Ondo State, Nigeria, between 2020 and 2025: (1) Identify the forms of digital transformation employed by SMEs in Ondo state; (2) Assess the effect of digital transformation on sales growth among SMEs in Ondo State; (3) Evaluate the impact of digital transformation on customer satisfaction among SMEs in Ondo State; and (4) Examine how digital transformation influences customer retention among SMEs in Ondo State. Research Hypotheses: H₀1: Digital transformation has no significant effect on sales growth among SMEs in Ondo State; H₀2: Digital has no significant effect on customers satisfaction among SMEs in Ondo State; H₀3: Digital transformation has no significant effect on customers retention among SMEs in Ondo State.
Research methods:
The study employs a cross-sectional survey research design. Structured questionnaires were administered to 208 SME owners, supervisors, and managers, and the collected data were analyzed using multiple regression analysis.
Main results:
The findings reveal that SMEs widely adopt digital tools such as POS machines, social media platforms, websites, and accounting software, while more advanced systems like CRM, ERP, and mobile applications are less common. The study shows that digital transformation positively affects sales growth, enhances customer satisfaction, and strengthens customer retention, with technological infrastructure, adoption of digital tools, and staff digital skills being critical enablers.
Implications for theory and practice:
The study fills key theoretical and empirical gaps by providing evidence on how digital transformation influences sales growth, customer satisfaction, and customer retention. It also addresses a contextual gap, as limited research focuses on SMEs in Ondo State, Nigeria. These contributions offer clearer guidance for scholars and SME practitioners seeking to understand the strategic value of digital technologies.The study fills key theoretical and empirical gaps by providing evidence on how digital transformation influences sales growth, customer satisfaction, and customer retention. It also addresses a contextual gap, as limited research focuses on SMEs in Ondo State, Nigeria. These contributions offer clearer guidance for scholars and SME practitioners seeking to understand the strategic value of digital technologies.
The aim of this study is to determine the impact of ongoing digital transformation on the performance of SMEs in Ondo State, Nigeria, between 2020 and 2025: (1) Identify the forms of digital transformation employed by SMEs in Ondo state; (2) Assess the effect of digital transformation on sales growth among SMEs in Ondo State; (3) Evaluate the impact of digital transformation on customer satisfaction among SMEs in Ondo State; and (4) Examine how digital transformation influences customer retention among SMEs in Ondo State. Research Hypotheses: H₀1: Digital transformation has no significant effect on sales growth among SMEs in Ondo State; H₀2: Digital has no significant effect on customers satisfaction among SMEs in Ondo State; H₀3: Digital transformation has no significant effect on customers retention among SMEs in Ondo State.
Research methods:
The study employs a cross-sectional survey research design. Structured questionnaires were administered to 208 SME owners, supervisors, and managers, and the collected data were analyzed using multiple regression analysis.
Main results:
The findings reveal that SMEs widely adopt digital tools such as POS machines, social media platforms, websites, and accounting software, while more advanced systems like CRM, ERP, and mobile applications are less common. The study shows that digital transformation positively affects sales growth, enhances customer satisfaction, and strengthens customer retention, with technological infrastructure, adoption of digital tools, and staff digital skills being critical enablers.
Implications for theory and practice:
The study fills key theoretical and empirical gaps by providing evidence on how digital transformation influences sales growth, customer satisfaction, and customer retention. It also addresses a contextual gap, as limited research focuses on SMEs in Ondo State, Nigeria. These contributions offer clearer guidance for scholars and SME practitioners seeking to understand the strategic value of digital technologies.The study fills key theoretical and empirical gaps by providing evidence on how digital transformation influences sales growth, customer satisfaction, and customer retention. It also addresses a contextual gap, as limited research focuses on SMEs in Ondo State, Nigeria. These contributions offer clearer guidance for scholars and SME practitioners seeking to understand the strategic value of digital technologies.
REFERENCES (72)
1.
ABISUGA-OYEKUNLE, O.A., PATRA, S.K., MUCHIE, M., 2019. SMEs in sustainable development: Their role in poverty reduction and employment generation in sub-Saharan Africa, African Journal of Science, Technology, Innovation and Development, No. 12 (4), pp. 405-419.
2.
ACCARIO, 2025. Strategies for Sustainable Growth: How SMEs Can Scale Successfully, https://accario.com/strategies... (accessed: 17.09.2025).
3.
ADAM, M., IBRAHIM, M., IKRAMUDDIN, I., SYAHPUTRA, H., 2020. The role of digital marketing platforms on supply chain management for customer satisfaction and loyalty in small and medium enterprises (SMEs) at Indonesia, International Journal of Supply Chain Management, No. 9 (3), pp. 1210-1220.
4.
ADEKUNLE, B.I., CHUKWUMA-EKE, E.C., BALOGUN, E.D., OGUNSOLA, K.O., 2023. Improving customer retention through machine learning: A predictive approach to churn prevention and engagement strategies, International Journal of Scientific Research in Computer Science, Engineering and Information Technology, No. 9 (4), pp. 507-523.
5.
AHUNGWA, P.A., OGBO, A.I., CHINDA, C.C., AJOH, T.N., UGBAM, O.C., ADIBE, T.N., 2024. Virality distribution strategy and customer retention of small and medium enterprises in North-Central Nigeria, Innovations, No. 77, pp. 1915-1946.
6.
AINA, A.T., 2025. Effect of technology organization environment framework in business strategy on decision making of small and medium enterprises in Lagos, Nigeria, FUDMA Journal of Accounting and Finance Research [FUJAFR], No. 3 (2), pp. 1-15.
7.
AKEREJOLA, W.O., OKPARA, E.U., OHIKHENA, P., EMENIKE, P.O., 2019. Availability of infrastructure and adoption of point of sales of selected small and medium enterprises (SMEs) in Lagos state, Nigeria, International Journal of Academic Research in Business and Social Sciences, No. 9(1), pp. 137-150.
8.
ALZOUBI, H.M., ALSHURIDEH, M.T., KURDI, B.A., ALHYASAT, K.M., GHAZAL, T.M., 2022. The effect of E-paymEnt and online shopping on sales growth: Evidence from banking industry, International Journal of Data and Network Science, No. 6 (4), pp. 1369-1380.
9.
ATLASSIAN, 2025. IT infrastructure: Definition & components, https://www.atlassian.com/itsm... (accessed: 10.10.2025).
10.
BAKER, J., 2011. The technology-organization-Environment framework, Integrated Series in Information Systems, Vol. 28, pp. 231-245.
11.
BARNEY, J., 1991. Firm resources and sustained competitive advantage, Journal of Management, No. 17 (1), pp. 99-120.
12.
BASSAN, L., KATHURIA, L.M., 2016. Understanding dimensions of customer-based brand equity in banks, International Journal of Business Competition and Growth, No. 5 (1/2/3).
13.
BIESOK, G., WYRÓD-WRÓBEL, J., 2011. Customer satisfaction-Meaning and methods of measuring, [in:] Howaniec, H., Waszkielewicz, W. (eds.), Marketing and logistic problems in the management of organization, Bielsko-Biała: Wydawnictwo Naukowe Akademii Techniczno-Humanistycznej w Bielsku-Białej, pp. 23-41.
14.
BOROWSKI, P., 2021. Digitization, digital twins, blockchain, and industry 4.0 as elements of management process in enterprises in the energy sector, Energies, No. 14 (7).
15.
BUSINESS ENTERPRISING, 2024. Sales growth rate, https://businessenterprising.c... (accessed: 11.10.2025).
16.
CHEN, Y.K., JAW, Y., WU, B., 2016. Effect of digital transformation on organisational performance of SMEs, Internet Research, No. 26 (1), pp. 186-212.
17.
CHIKAZHE, L., MAKANYEZA, C., CHIGUNHAH, B., 2021. Understanding mediators and moderators of the effect of customer satisfaction on loyalty, Cogent Business & Management, No. 8 (1).
18.
DEMIREL, D., 2022. The effect of service quality on customer satisfaction in digital age: Customer satisfaction-based examination of digital CRM, Journal of Business Economics and Management, No. 23 (3), pp. 507-531.
19.
DEVARAJ, S.M., 2024. Cloud, Ai, And Digital Transformation: A Winning Combination, International Journal of Computer Engineering and Technology (Ijcet), No. 15 (5), pp. 1020-1032.
20.
EDOBOR, F., SAMBO-MAGAJI, A., 2025. Small and Medium Enterprises (SMEs) and Sustainable Economic Development, [in:] Kumar, P., Dadwal, S., Verma, R., Kumar, S. (eds.), Digital Transformation for Business Sustainability and Growth in Emerging Markets, Leeds: Emerald, pp. 197-222.
21.
ESHOV, M., MAMADIYAROV, Z., MAKHMUDOV, S., KHAMDAMOV, S.J., KHAJIMURATOV, N., RUZIEVA, D., YUNUSOVA, S., 2024. Proceedings of the 8th International Conference on Future Networks & Distributed Systems, pp. 155-164.
22.
GANOTAKIS, P., ANGELIDOU, S., SARIDAKIS, C., PIPEROPOULOS, P., DINDIAL, M., 2023. Innovation, digital technologies, and sales growth during exogenous shocks, Technological Forecasting and Social Change, No. 193.
23.
GIWA, M.A., OYENUGA, O.G., FOLORUNSHO, R., UGHANA, J.D., 2025. Digital Transformation and Customer Satisfaction in the Nigeria Banking Industry: An empirical study of Guaranty Trust Bank’s mobile banking users, Lagos Journal of Banking, Finance and Economic Issues, No. 6 (1), pp. 208-218.
24.
GUPTA, A., 2016. Redefining service quality scale with customer experience quality scale: A critical review, International Journal of Services and Operations Management, No. 25 (1).
25.
HANELT, A., BOHNSACK, R., MARZ, D., ANTUNES MARANTE, C., 2020. A systematic review of the literature on digital transformation: Insights and implications for strategy and organizational change, Journal of Management Studies, No. 58 (5), pp. 1159-1197.
26.
HERRANEN M., 2022. Analysis of E-skills found in job postings, Theseus: Ammattikorkeakoulut.
27.
INGSIH, K., ASTUTI, S.D., RIYANTO, F., 2024. The role of digital competence in improving service quality and employee performance, SA Journal of Human Resource Management, No. 22.
28.
ISICHEI, E., JUDE ONYEMACHI, I., 2025. Digital transformation strategies and resilience of SMEs in FCT-Abuja, Nigeria, Abuja Journal of Business and Management, No. 3 (1), pp. 271-282.
29.
JAIN, V., SHETH, J.N., MOGAJI, E., AMBIKA, A., 2023. Customer-centric support services: An introduction to the next frontier for competitive advantage in the Digital Era, [in:] Sheth, J.N., Jain, V., Mogaji, E., Ambika, A. (eds.), Customer Centric Support Services in the Digital Age, London: Palgrave Macmillan, pp. 1-10.
30.
JARDAK, M.K., BEN HAMAD, S., 2022. The effect of digital transformation on firm performance: Evidence from Swedish listed companies, The Journal of Risk Finance, No. 23 (4), pp. 329-348.
31.
JEZA, S., MPELE LEKHANYA, L., 2022. The influence of digital transformation on the growth of small and medium enterprises in South Africa, Problems and Perspectives in Management, No. 20 (3), pp. 297-309.
32.
KADHIM, M.J., 2024. Digital Literacy and Its Importance in the Modern Workforce, International Journal of Social Trends, No. 2 (2), pp. 44-50.
33.
KREJCIE, R.V., MORGAN, D.W., 1970. Determining sample size for research activities, Educational and Psychological Measurement, No. 30 (3), pp. 607-610.
34.
KUSUMA, A.R., SYARIEF, R., SUKMAWATI, A., EKANANTA, A., 2024. Factors influencing the digital transformation of sales organizations in Indonesia, Heliyon, No. 10 (5).
35.
KUTNJAK, A., 2021. COVID-19 accelerates digital transformation in industries: Challenges, issues, barriers and problems in transformation, IEEE Access, No. 9, pp. 79373-79388.
36.
LI, H., YANG, Z., JIN, C., WANG, J., 2022. How an industrial internet platform empowers the digital transformation of SMEs: Theoretical mechanism and business model, Journal of Knowledge Management, No. 27 (1), pp. 105-120.
37.
MALIK, S., CHADHAR, M., VATANASAKDAKUL, S., CHETTY, M., 2021. Factors affecting the organizational adoption of blockchain technology: Extending the technology–organization–Environment (TOE) framework in the Australian context, Sustainability, No. 13 (16).
38.
MCCARTHY, A.M., MAOR, D., MCCONNEY, A., CAVANAUGH, C., 2023. Digital transformation in education: Critical components for leaders of system change, Social Sciences & Humanities Open, No. 8 (1).
39.
MINISTRY OF COMMERCE, INDUSTRY AND COOPERATIVE SERVICES, 2025. Alagbaka, Ondo State.
40.
MISHRIF, A., KHAN, A., 2023. Technology adoption as survival strategy for small and medium enterprises during COVID-19, Journal of Innovation and Entrepreneurship, No. 12 (1).
41.
NGUYEN, T.H., LE, X.C., VU, T.H., 2022. An extended technology-organization-Environment (TOE) framework for online retailing utilization in digital transformation: Empirical evidence from Vietnam, Journal of Open Innovation: Technology, Market, and Complexity, No. 8 (4).
42.
NKOSI, M., 2020. The COVID-19 pandemic and the digital divide in South Africa: Impact and policy implications, International Journal of Information Management, No. 55.
43.
OCHINANWATA, J., OCHINANWATA, N., 2023. The impact of digital platforms on SMEs’ development and performance, [in:] Hinson, R.E., Odame, D.A., Adae, E.K., Adom, K. (eds.), Small Business and Entrepreneurial Development in Africa: A Route to Sustained Economic Development, Cham: Springer Nature Switzerland, pp. 179-194.
44.
OECD, 2021. The digital transformation of SMEs, OECD Publishing, https://doi.org/10.1787/bdb925... (accessed: 20.10.2025).
45.
OGUNSUYI, O., TEJUMADE, S.O., 2021. Point of Sale Terminal Services and the Performance of Small and Medium-sized Enterprises in Nigeria, International Journal of Social and Management Studies, No. 2 (4), pp. 114-122.
46.
OJOBO, C.A., ORGA, C.C., OKECHUKWU, E.U., 2023. Impact of digital literacy on the performance of small-scale business in Enugu State, Advance Journal of Business & Entrepreneurship Development, No. 7 (1), pp. 55-67.
47.
OLUDOYI, I.O., ADESUYI, I., AYO, M.F., BULOERE, S.M., 2024. Social Media Marketing and Performance of Small and Medium-Sized Enterprises in South West Nigeria, International Journal of Asian Business and Management, No. 3 (5), pp. 659-678.
48.
OMRANI, N., REJEB, N., MAALAOUI, A., DABIĆ, M., KRAUS, S., 2024. Drivers of digital transformation in SMEs, IEEE Transactions on Engineering Management, No. 71, pp. 5030-5043.
49.
PELLEGRINO, A., ABE, M., 2023. Leveraging social media for SMEs: Findings from a bibliometric review, Sustainability, No. 15 (8).
50.
PFISTER, P., LEHMANN, C., 2023. Measuring the success of digital transformation in German SMEs, Journal of Small Business Strategy, No. 33 (1), pp. 1-19.
51.
RAMASUBBU, N., MITHAS, S., KRISHNAN, M., 2008. High tech, high touch: The effect of employee skills and customer heterogeneity on customer satisfaction with enterprise system support services, Decision Support Systems, No. 44 (2), pp. 509-523.
52.
RANAWEERA, C., NEELY, A., 2003. Some moderating effects on the service quality‐customer retention link, International Journal of Operations and Production Management, No. 2 (2), pp. 230-248.
53.
RINDFLEISCH, A., O’HERN, M., SACHDEV, V., 2017. The digital revolution, 3D printing, and innovation as data, Journal of Product Innovation Management, No. 34 (5), pp. 681-690.
54.
SETIA, P., SETIA, P., VENKATESH, V., JOGLEKAR, S., 2013. Leveraging digital technologies: How information quality leads to localized capabilities and customer service performance, MIS Quarterly, No. 37 (2), pp. 565-590.
55.
SHAHADAT, M.M., NEKMAHMUD, M., EBRAHIMI, P., FEKETE-FARKAS, M., 2023. Digital technology adoption in SMEs: What technological, environmental and organizational factors influence in emerging countries? Global Business Review, January.
56.
SHARMA, A., GUPTA, J., GERA, L., SATI, M., SHARMA, S., 2020. Relationship between customer satisfaction and loyalty, SSRN Electronic Journal, December, pp. 1-12.
57.
SIN TAN, K., CHOY CHONG, S., LIN, B., CYRIL EZE, U., 2010. Internet‐based ICT adoption among SMEs, Journal of Enterprise Information Management, No. 23 (1), pp. 27-55.
58.
SMEDAN/NBS. (2021). National survey of micro, small and medium enterprises (MSMEs) 2021 report, Abuja, Nigeria: SMEDAN & National Bureau of Statistics, https://nigerianstat.gov.ng/pd... (accessed: 7.10.2025).
59.
STICH, V., ZELLER, V., HICKING, J., KRAUT, A., 2020. Measures for a successful digital transformation of SMEs, Procedia CIRP, No. 93, pp. 286-291.
60.
SUBEDI, K.R., BHATT, S.D., 2025. Assessing the Perceived Impact of Digital Transformation on the Efficiency of Sales Growth in Nepal, NPRC Journal of Multidisciplinary Research, No. 2 (10), pp. 64-81.
61.
TABER, K.S., 2017. The use of Cronbach’s Alpha when developing and reporting research instruments in science education, Research in Science Education, No. 48 (6), pp. 1273-1296.
62.
TENG, X., WU, Z., YANG, F., 2022. Research on the relationship between digital transformation and performance of SMEs, Sustainability, No. 14 (10).
63.
TORNATZKY, L.G., FLEISCHER, M., CHAKRABARTI, A.K., 1990. The processes of technological innovation, Lanham: Lexington Books.
64.
TSOU, H., CHEN, J., 2021. How does digital technology usage benefit firm performance? Digital transformation strategy and organisational innovation as mediators, Technology Analysis & Strategic Management, No. 35 (9), pp. 1114-1127.
65.
UNEGBU, H.C., YAWAS, D., DAN-ASABE, B., 2024. The impact of digital transformation on Nigerian small and medium-sized enterprises (SMEs) in the global business landscape, Jurnal Mekanikal, No. 47 (1), pp. 66-85.
66.
VIAL, G., 2019. Understanding digital transformation: A review and a research agenda, The Journal of Strategic Information Systems, No. 28 (2), pp. 118-144.
67.
VRONTIS, D., CHAUDHURI, R., CHATTERJEE, S., 2022. Adoption of digital technologies by SMEs for sustainability and value creation: Moderating role of entrepreneurial orientation, Sustainability, No. 14 (13).
68.
WABARA, S.T., UDU, G.O.C., NWEKPA, K.C., ARISI-NWUGBALA, E.A., EZEANOKWASA, F.N., MAMAH, A.I.K., CHIJINDU, S.J., 2023. Effect of Social Media Usage on the Growth of Small and Medium Enterprises in South East Nigeria, Journal of Business and Management (IOSR-JBM), No. 25 (9), pp. 1-8.
69.
WESTERMAN, G., BONNET, D., MCAFEE, A., 2014. Leading digital: Turning technology into business transformation, Brighton: Harvard Business Review Press.
70.
WORLD BANK, 2020. Digital economy for Africa initiative, https://www.worldbank.org/en/p... (accessed: 10.10.2025).
71.
WORLD ECONOMIC FORUM, 2023. Smaller and mid-sized businesses are fighting for survival. This is how they could prosper, https://www.weforum.org/storie... (accessed: 10.10.2025).
72.
YAMANE, T., 1967. Statistics: An Introductory Analysis, New York: Harper and Row.
Share
RELATED ARTICLE
| eISSN: | 2719-860X |
| ISSN: | 1896-9380 |
We process personal data collected when visiting the website. The function of obtaining information about users and their behavior is carried out by voluntarily entered information in forms and saving cookies in end devices. Data, including cookies, are used to provide services, improve the user experience and to analyze the traffic in accordance with the Privacy policy. Data are also collected and processed by Google Analytics tool (more).
You can change cookies settings in your browser. Restricted use of cookies in the browser configuration may affect some functionalities of the website.
You can change cookies settings in your browser. Restricted use of cookies in the browser configuration may affect some functionalities of the website.
