In a recent straw poll amongst local SME businesses I asked “What most frustrates you about marketing your business?” The overwhelming answer came back as “not knowing what I am getting back for the money I spend”.
This got me thinking. Why is this so difficult for SME businesses to know the return on investment (ROI) from their marketing spend?
So I asked a few more questions.
-
How much does it cost to get a new customer?
-
How much does it cost to get a lead?
-
When you get a new customer or enquiry do you know where it has come from? And if so do you track this?
How many of you can say you know the answers to these questions? I suspect not many, so little wonder so many businesses find it frustrating. You can’t know what you don’t monitor.
I see three main types of business owner as a result of this.
-
Mr ‘Better to be Safe’ – this is someone who has no evidence that their activity is working but has always done it and doesn’t know what else to do so the fear of possible loss keeps him spending and wasting money on advertising and marketing that doesn’t work
-
Ms. ‘Easy to Persuade’ – this second type is taken in by the sales people and the great ‘deals’ out there. She doesn’t have a marketing budget or a plan of action and is often swayed by claims of how many people will be exposed to her ad / business name. She often has no idea of how much she has spent in the year, let alone whether it has been effective or not.
-
Mrs ‘It’s all a Waste of Money’ – this third type of person is usually a few years into their business and has ‘tried everything’ and is thoroughly disillusioned because again has no idea what (if anything) has worked. She is so fed up that she just says no to everything
So how do you avoid becoming one of these types?
-
You need to know what is and isn’t working
-
You need to know how much you can afford to spend to get a lead and customer
-
You need to know what you are trying to achieve so you can judge the appropriateness of marketing opportunities
So how do you achieve this?
#1 Look at what you can afford to spend to get a lead or customer
This will be different for every business. It will relate to how much they spend with you, your margins, likelihood of repeat business and how long are they likely to be a customer.
You may have different types of customer, retail and commercial for example so bear in mind the differences in revenue they bring in.
A florist for example may have –
-
Retail customers who come in off the street or through directories / online spending small values infrequently
-
Bridal work which is much higher value is unlikely for repeat business, although has the potential for recommendations
-
Funeral flowers which is likely to be referred work from undertakers
-
Commercial work (restaurants, hotels, office receptions) which is regular and relatively high value.
The cost you are willing to spend on a retail customer will be small, a few pounds, whereas for a bride it may be nearer £50 and a corporate customer spending a few £1000 a year, it could be £150 or higher.
#2 You need to track where your leads and new customers are coming from.
For companies with sophisticated marketing programmes, tracking responses to specific marketing activities is the norm. Every advertisement, for example, would have a unique code or telephone number that would identify which ad it was.
But even as a small business there are ways you can help monitor the performance of your marketing –
-
First ask people. Set up a simple paper based enquiry form that you capture someone’s details and make sure you ask ‘where did you hear about us?’
-
If you are making an offer such as a discount or money off, think about building in an actual voucher that customers have to present and make sure the vouchers are different (perhaps with a code) for the different media (leaflet, newspaper ad etc.)
-
Look at using online channels such as Google Adwords or Facebook advertising which will give you stats about how many people have clicked through
-
Make sure you have analytics such as Google analytics on your website so you can look at your web traffic as this may give you an indication on promotions that have pushed web traffic. For example if you ran a radio campaign or leaflet drop and your web traffic increased that week, you can safely say it may have been that activity that caused this.
#3 Understand what you are trying to achieve with your advertising and marketing
Sounds obvious, but this is one of the main mistakes I see small businesses make. If you answer to this is ‘to get my business name known’ then think again. There are two main types of advertising, awareness and response. Most people think of advertising in terms of awareness because that is what they see – the big brands on the TV, billboards or magazines. So they think that is what they should be doing, getting their name out there as much as possible. The fact is, however, this works for the big brands because of the sheer amount of money they throw at it. It is a volume game and as such very few small businesses can afford to use that technique. It is like you being in a football stadium with tens of thousands of people. Yes you are there but how many people are going to notice you?
It is best to think in terms of who you want to reach (your dream customers) where do they go looking for your types of products or services, and how best to reach them and what can you do to get a response from them?
So for an IT company for example, they may want to be targeting business clients with 5+ employees. So there is no point in producing leaflets, advertising in the local paper or going heavily into yellow pages as this will not attract the right type of customer. For them options such as networking and investing in their website and SEO would be better options along with possible advertising or editorial features in local business supplements.
For a garage, their ideal target audience could be local people who would benefit from their pick up service. They would be best to target local households with leaflets promoting an offer of discount or deal on something like an MOT or service that would bring people in and then hopefully result in repeat orders, or target large local employers who have many staff and they could provide a specific deal for employees of that company. A proactive recommend a friend campaign would also be a good option as this is a business were recommendations
#4 Ditch the dogs
If you are advertising in the wrong place. Stop. If you are marketing your business is sensible ways yet still not getting results, look at your offer, your message and your design. The right ad in the wrong place won’t work, but the wrong ad in the right place, also won’t work, so take some professional advice before writing something off.
Try new options (that fit your criteria). Test new offers and don’t keep running with the same creative if it starts to fail. You need to spread the risk and try lots of different things rather than relying on just one source. And don’t forget, marketing your business isn’t just about advertising, it could also include things like networking, direct selling and social media.
So the 4 golden rules of preventing marketing frustration?
-
Know who you want to attract and where they will be looking
-
Understand how much you can afford to spend to get a lead and a customer
-
Put in systems to help track where your leads and customers are coming from
-
Review you marketing against these results and keep trying new ideas
I hope this has given you some insight and tips for making the marketing of your business more effective. Please feel free to post any comments, feedback or questions.
About the author: Alison Clynes is the owner of Kinetic Marketing and Design. With background working in a large Manchester Advertising Agency on blue chip clients, she set up Kinetic in 2007 with graphic designer husband Steven, to bring some of this big brand thinking and approach to local businesses.
Image: Freedigitalphotos.net Photographer: Graur Razvan Ionut
https://www.facebook.com/#!/event.php?eid=187509244644100
2 post(s) 
