Marketing is an essential part of promoting your small business and growing sales. Yet too often small business owners try new marketing tactics without measuring the results and knowing how it aligns to their goals. It can cause a small business to put the clamps down on the marketing budget–or skip it altogether. So in order know how and where to spend your marketing resources, you need to first avoid the marketing pitfalls so many owners fall into.
Here are eight common marketing mistakes small businesses make—and how to avoid them:
- Treating marketing as an expense vs. an investment.
An expense is something you buy and depreciate. An investment is something you purchase that will deliver value in the future. The sole purpose of marketing is to drive more leads into customers and keep them as raving fans. So if you run your small business looking at marketing as an expense-ready to cut marketing campaigns and programs when things get tight, you may want to reshape your perspective on small business marketing.
Often when turbulent times hit and sales fall in the tank the first inclination is to reduce your marketing spend. This is the absolute wrong decision. Marketing is the very catalyst you need to spur growth and drive new opportunities.
- Not developing a written marketing plan and marketing budget.
It an old adage that still holds true today: Failing to plan means you are planning to fail. Small businesses that don’t have a rock solid marketing plan have a high rate of failure and usually lack the proper marketing budget. In fact, according to the 2016 marketing trends report from the Content Marketing Institute, B2B marketers said their effectiveness increased significantly when they had a documented content marketing strategy and 40 percent of marketers deemed least effective (according to how effective they rated their content marketing) had no written marketing strategy.
My advice to you as a small business owner, is “Just Do It”. Take the time to develop a strategic marketing plan. As you create a marketing plan, be sure to address the financial costs of implementing each strategy. For most small businesses, the general rule of thumb is that 9-12% of revenue should be earmarked for marketing efforts. If you are in start up mode or early stages you may need to invest more as you build your brand awareness.
Your plan should outline the specific allocation of dollars, for things like website design and maintenance, inbound marketing, marketing collateral, Facebook ads, logo design and, if necessary, finding and paying a freelancer to assist with the areas of your plan you don’t have the expertise to execute on. Part of your budget planning should include money for technology and software tools that will deliver a return-on-investment of your overall marketing efforts.
- Targeting the wrong audience.
No matter how great your messaging, logo or ad campaigns are, if you’re targeting the wrong audience, you’re flushing marketing dollars down the toilet. When you target the masses, follow your “gut” or have a preconceived notion about who your prospect or customer is, rather than looking at data about who is actually making purchases–it can drive up marketing costs and plummet sales conversions.
Spend time getting to understand why your customers buy and what problem they were trying to solve when they found you. Use email marketing to send a feedback survey or use a simple NPS survey. Marketing efforts can then be shifted to match the results and demographics such as gender, age, industry and reasons they made a purchase. Misreading an audience can send your small business down the wrong path. However if you target your ideal buyer you will maximize the most of your marketing budget and find yourself attracting and keeping more customers.
- Not differentiating your product or service.
It’s rare that a business creates its own category or a product or service that’s never been seen before. In most markets, small businesses face competition, which is why they need to communicate their unique value proposition-why they are different. You need a solid reason that’s easy to explain and gives people an obvious reason to do business with you instead of your competitors.
Use your marketing to educate potential customers, not just sell to them. Educating consumers in a way that defines what differentiates you from your competition makes it easier for them to make a buying decision. If you can’t define why your product or service is unique, you can’t expect a potential customer will be able to either.
- You haven’t a clue what kind of marketing your competitors are doing.
Keep abreast of what your competitors are doing for marketing and study their efforts, you’ll see which of those initiatives succeeds and fails. Are there tactics they tested and then never do again? Which do they employ month after month? Use a tool like Spyfu to better understand the best SEO or PPC strategy for your business. Another simple tool is Google Alerts that enables you to stay up to date with real-time updates on your closest competitors.
By being attentive to the competition’s marketing efforts you can learn from of their successes and failures and best allocate your marketing resources to find new customers.
- Failing to recognize the value of your existing customers.
While attracting new visitors and buyers is key for your small business, don’t forget about your existing customers. Studies show that acquiring a new customer can be nearly 6 times more costly than cross-selling or upselling an existing one.
If you only focus your marketing efforts on acquiring new customers, you’re also likely to neglect your existing customers and provide them with less-than-stellar customer service. According to Forrester Research nearly 70% of consumers check out customer reviews prior to purchasing a product or service. That means that if you make a mistake and forget about your current customer base your sales growth is in jeopardy. So allocate a portion of your marketing budget to customer advocacy and retention, you will find it will propel your brand and deliver more referrals in the long run.
- You don’t have a strong online presence.
Believe it or not, almost half of all small businesses in the U.S. don’t have a website. From a marketing perspective that can be devastating. Some small business owners think because they are local, or have just one location, they don’t really need a website. But the game has changed. More than 90% of consumers search online for products and services and consumers will generally find you online before they go to your business. In today’s digital age there is no excuse for not having a responsive website with so many easy, DIY options available.
Creating an online presence is a proactive way to promote your business, and it gives prospects and customers a way to learn about your business and your offerings at their convenience. Tools like Facebook, Twitter, Instagram, Linkedin, and Google are not just for social hour. They can give you access to your target audience and drive real results when leveraged correctly. It can also provide valuable insights which will help you measure and track the success of various marketing efforts.
- You don’t know your marketing metrics.
I talk to a lot of small businesses everyday and very few have a great handle on the metrics that make their business go. By knowing your marketing metrics and ratios it will give you insight into what is working, what isn’t and how much you should be spending to reach new customers and keep existing ones.
So let’s say you are investing $500 per month in PPC and $500 per month in Social media. Which marketing channel is the most effective channel at driving leads and customers? Should you shift your marketing spend from PPC to Social? What is your cost per lead (CPL) and cost per customer? (CPC) A big mistake is not knowing what the average lifetime value of a customer (LTV) and customer acquisition costs (CAC) are for your small business. It is hard to decide what you can afford to invest to drive more sales leads when you are unsure of what a customer is worth to you and how quickly you can get a payback on your marketing spend.
There is a slim line between success and failure for any small business. By eliminating these eight costly mistakes and having a sound marketing strategy in place you will be able to reach more customers and grow profitably.