All businesses, big and small, need to market their product, service, and company. When you have a smaller company, small business marketing is similar in terms of tactics, but different from your traditional big business or corporate marketing due to financial constraints.
Here are some strategies and approaches you may want to take when beginning your small business marketing plan:
Closely define your target audience
In a perfect advertising world, your business would ONLY pay to advertise to those who are most likely to buy your product or service. In reality, however, this is never the case. Granted, finding the approach that most closely targets your potential customers is important, but equally so is choosing an advertising vehicle that minimizes wasted coverage. When wasted coverage is minimal, it ultimately results in a profitable cost per lead. Of course much of this depends not only on the advertising medium itself, but other variables, as well, such as the level of competition and profit margins.
For example, a personal injury attorney could land a case where a huge settlement is the outcome, in which case, any wasted advertising dollars is insignificant. But this is the rare exception. Most small business owners who have paid for lots of wasted advertising coverage will likely lose money on their campaign.
Choose your medium carefully, and do a breakeven analysis
There isn’t a single small business marketing approach that doesn’t come with some degree of waste. Newspaper advertising, as an example, provides a vehicle that is typically based on geographic distribution across a wide swath of demographics. It is a given that if a newspaper has, for example, a circulation of 300,000, depending on the type of business you’re in, you could be paying for upwards of 95% waste! But let’s look at the math here: 95% waste of 300,000 comes to 285,000, leaving you with 15,000 legitimate prospects. That’s still quite a large number, but that’s just your gross audience of targeted prospects. Let’s assume you’re able to convert just 2% of that 15,000. In this example, that translates into 300 sales. Taking your average profit margin (for this example, let’s assume your net profit per sale is $30), you’ll have generated $9,000 from the campaign. So, if the ad ran you $9,000, and you generated 300 sales and paid for 95% waste, you would have broken even on the campaign. If you approach your small business marketing with an eye on the math of a breakeven analysis, you’ll stand a much better chance of making the best decision about media costs.
Most small businesses are small because they are either appealing to a niche market or they are a local company. Either way, your audience will be much more targeted based upon location, products, services, or all of the above. This can actually be great news since it will likely save you money and your chances of attracting new clients is enhanced since your company’s services are so targeted.
Set up a budget
Once you have defined your audience it’s best to set up a budget for how much you want, and can afford, to spend for your small business marketing. So first and foremost you will need to calculate costs. Some key factors in determining your budget are how much your company already brings in and how much you expect the marketing that you will do to make, otherwise known as your Return On Investment. Once you estimate those costs you will want to make sure you keep tabs on your ROI and how effective your marketing strategy is.
Cost-alternative marketing strategies
After calculating costs and setting up your budget, it’s important to monitor your precious marketing dollars against results. Ideally, your budget will support a little experimentation, so you can see which campaigns, media, creative approaches, etc. give you the best bang for your buck. Spending more money on campaigns that have proven to produce poorly is obviously a bad idea. You never want to put all your proverbial eggs in one basket (i.e. run on one radio station in a market that has dozens). Similarly, you’d be better off not spending all of your budget in one type of campaign (for example, one huge direct mail campaign instead of doing list segmentation, and mailing different offers with different creative approaches that are all trackable).
For many small business owners, a limited budget requires the use of what’s called, “guerilla marketing.” Guerilla marketing is all about small budget/big impact campaigns that typically avoid the use of traditional media. This does not imply that all guerilla marketing campaigns are some wildly crazy idea (getting dressed up in a giant chicken costume and parading downtown squawking while giving out discount coupons – although that’s likely been done!), but they typically are more personally creative. For example, one of the first things a prospect may get is a business card. So many businesses hand out a very standard, vanilla-looking business card with just the pertinent facts. Boring. You know the old line about first impressions. When your first impression is as dull as a doorknob, you are likely not converting a prospect to a customer. Be bold, be fearless, and certainly be creative with your guerilla marketing campaigns.
Another example of marketing that falls under the category of inexpensive is email marketing. There’s a reason why your email box is filled with real (and not so real) emails for you. It’s cheap compared to traditional media. But be aware of the challenges associated with such. Any reputable email deployment company will stop you in your tracks if you do not use an opted-in list. Building your house list of opted-in emails is your number one assignment as small business marketing plan. It’s not so easy to develop a good house list from scratch, but you need to start somewhere. Offering a something of value (a discount on a service, or a white paper, for example) will go a long way toward people wanting to grant you the right to send them future emails. In addition to sending your own emails to potential customers, you can also use an email marketing service which, depending on your target, can be fairly cost-effective. Other comparable options are door-to-door marketing of other businesses, phone calls, listing your service online, and even optimizing your company’s website so it’s easy to find, use, and understand what your company has to offer.
Every business has some sort of competition, even small local businesses. Before you embark on a marketing program, do a little homegrown research to find out everything you can about them-what they do better and worse compared to your company, beyond just price. While price is certainly a key determining factor in B2B and B2C businesses, it’s not always the most important one. And no business can always be the lowest priced competitor without suffering in the long run. You want to earn a customer’s business based on a variety of factors such as your branding, your reputation, the overall customer experience with your business, your hours, your parking, your staff, your return policy, etc., etc. The list goes on and on. You can do everything right in terms of a campaign bringing prospects to your door and then blow it once you’ve got them there. In most cases, it cost your firm good money to get the customer in the door, and then something as innocuous as an employee who doesn’t smile or say thank you can turn off that customer forever. Boom. Money and opportunity wasted.
When determining which approach is right to your small business marketing strategy, consider these key approaches as a guideline to start and work with. Have some more small business marketing tips? Share with us in the comments below.