Small Businesses work with limited budgets, limited personnel and limited resources, something you as a small business owner realize day in and day out. This is the most critical and single biggest factor influencing your marketing decisions.
So how does one optimize on these 3 factors to come out on top, either to become a medium sized business or a very profitable small business? We have highlighted 6 challenges that you need to face up to and come out on top if you want to break free from the small business tag.
1. Detecting your ideal market segment
Remember you have limited money to spend on your marketing budget right? Well it’s important you spend it attracting the right type of people. The logical way to do that is to filter through all the various types of clients you can have to the one which gives you the highest ROI.
You can divide your market by demographic information, product usage and value, geography, socio-economic characteristics, how clients perceive you, how ready you are for each client type.
Based on your industry and product usually one or two of these segmenting types works best. You can then use a segmenting tree to break-up your client types and branch them out.
First by process of elimination remove the market types which cannot be considered the core segment(s). E.g. you cannot service a client outside your home state since your product a water filtration device needs home visit to install and do a once a year maintenance, that leaves out any potential outside said state as someone viable. Some common elimination reasons are: geographic reach, laws and regulations, pricing of product is too high etc.
Then for the remaining segments try to measure your ROI assuming you were able to reach and convince 50% of this market segment. Are the profits and revenue for any segment standing out? If yes, then put them at top of the pile. Eliminate the bottom 30% of your results. E.g. your water filtration device can be sold to companies, family homes, single or couples owning apartments and government offices. But in your state, family homes are large and also their price point is high enough such that your revenue from them will supersede all other segments. So it would go straight to the top of the pile.
Lastly, you need to ask yourself is which of these last remaining segments are ideal for your business and where it is today? Are you needing short term gain or looking for long term clients? Are your sales team members better oriented to sell to companies or the family homes? Can you reach the family suburbs easily or is it easier to service companies which are in specific parts of each big city you cater to? All these questions will help you select the top segment.
Always select 2-3 segments and one of which is your core segment. Majority of your marketing messages and decision on which channel to use will be dependent on this core segment. You just saved a lot of your marketing decision headache and budget wastage by deciding on your one key segment.
2. Deciding on Marketing Channel mix
Now that your market segment is nailed it’s time to decide on the channels we can use to reach them. A lot of companies find this exercise confusing and most of all are afraid to take a decision!
The 4 parameters we need to consider when selecting marketing channels are:
- Cost per client acquisition and Budget
- Percentage reach to the market
- Time to reach and interactions taken to convert
- Scalability and Repeatability vis-a-vis the cost.
Some channels rule themselves out based on cost and reach. E.g. A T.V. Commercial maybe out of budget or door to door flyer delivery person maybe too slow for a multi-city business.
Select the channels which best suit your needs.
One important thing is to set small goals or experiments and see if they are met or successful before investing more into a channel. If you can budget our experiments, you should try various channels with due consideration for time to show progress. This will help cement your decisions and at worst case help rule out failures.
3. Content Generation
Content creation should be part of your daily business. It is not just for sales or marketing but should be part of your organization DNA. Every word written or image created can be used as content consumption for some one.
Each year, your business creates new information and promotions as well as updating and re-envisioning existing content, it is vital to use all the elements and fit them in with the correct channels. Even actual non-marketing content is vital to in-bound marketing. Examples of non-marketing content include product manuals, sales correspondence and customer service conversations.
Your content creation goal should be to generate various forms of the same topic as content at the same time to maintain continuity of thought and message to the end consumer. Be sure to leverage on every sort of content piece that is being generated by your team. This saves creation costs as well as employee time. This also helps you to have a steady stream of content without requiring you to spend extra money or add resources.
What is important is to have a process for approval and decision making of when and where to use this. Ideally there should be a single curator who collects the content and makes these decisions.
What about the must-haves. Well take your market segmentations and be sure to list a set of 5 pieces of content vital for this person to be engaged and make a decision. That is your minimum target list. Otherwise, you risk your prospect going to someone else even before you know you were under consideration for the sale.
4. Knowing when to stop wasting money
Many times small companies pick the wrong the segment or wrong channel or both, or maybe invest in bad sales people. There are many places to go wrong. And as a small business you do not have the luxury to wait for things to go from bad to worse.
It is important to know when to stop wasting money on a particular segment, channel or content piece (for the purpose of this blog, lets stick to these 3, there can be so many more).
- Run experiments so you can understand what works first up. This will also help you fix expectations from each segment-channel mix that you do select to invest more money into.
- Fix a 1 month / 3 month / 6 month and 1 year target for a given segment-channel mix.
- Make sure you measure against your target so that you know which mix is messing up your ROI. Time to tweak it or stop funding it and find something new to try.
Each business is different and it is vital to understand what early red flags to look out for when it comes to your particular business when investing in marketing.
E.g. you pay a 3rd party website which refers buyers to your website, those interested in purchasing water filtration devices. You pay them per link clicked to your site. Initially the traffic increased through them at 10% per month and your click to conversion ratio was also 10% which ensured the channel was always profitable (Say you sold 10 devices per month). However recently the traffic growth has stagnated to 2% and your conversion ratio is down to 1% which means the sale that you do make is more expensive than the actual amount you spend on all the clicks together each month. It is time to cut your losses and find the next new hot referral site or a new channel all together.
5. Lead Wastage
So your marketing works and you drive leads to your small business. The biggest sin you can commit is to lets even one of these leads fall away. This happens often in small companies due to mismanaged or constantly changing teams, no single process or location to update lead information and just pure indiscipline.
To help avoid lead wastage, it is vital to invest in a CRM which helps you maintain all incoming leads from various sources and also update their status including assigning them to people within your team.
Sales CRM today are extremely reliable, easy to learn and cheap. Investing as low as US$ 15 per month lets you maintain all the information you need to logically see out a lead’s lifecycle.
Most of the Sales CRM let you map your own processes or pipeline steps into software. What’s more they let you maintain e-mail, SMS and letter templates which can be re-used, hence ensuring standardization of communication. Most importantly they let you get clear insights into where each lead is and who is the active owner of the lead on each side.
Before you invest in a CRM it is important to do a few things:
- Map you sales process into steps, with each step having a maximum duration a lead can be in before it goes into the stagnant bucket. Prepare a list of communication including content which needs to be shared with the lead
- Create your ideal lead information form on paper, all the data you need to help improve on your sales closure.
- Use the above 2 items in a few test runs on incoming leads and tweak them till you are happy.
Latest CRMs also let you automatically collect leads from your website, forms on 3rd party website, using Apps on the phone. All this ensures that no leads go un-captured, preventing lead wastage.
6. People or Outsource or DIY
This is a conundrum faced by most businesses, with money and sales pushing you in different directions.
Time you have, Experience you have and your Budget are the three factors which drive this decision.
Experience: If you are a marketers by profession the best idea is to Do It Yourself till such time as it is manageable and rest of your departments don’t suffer from lack of your attention.
Your sales drive your business, hence if sales are stagnant with the marketing effort you are putting it, its time get an outside perspective.
Budget: Hiring a full blown agency maybe outside your budget, hence there is middle path, hiring free-lancers or outsourcing your marketing activities. Here you may retain creative control or overall decision making but the actual activities are outsourced. Managing free lancers and building a trust rapport with them can be time consuming.
Time: If you have the budget, but lack the experience and time, an Agency is the way to go. They plan and deliver based on your inputs and goals. Agencies will dedicate their resources to your specific goals.
If you happen to have a budget, and also experience to manage people in marketing, the ideal option for you then is to hire people in-house. It gives you more control.
It takes understanding of all your resources and expertise to decide which works best for you at the current time. More important is to know when something is not working anymore and take a decision to change it. Usually a new company will go through the following stages as they grow
a. Do it yourself
b. Hire free-lancers
c. Hire an Agency
d. Hires people in-house
Usually this chain follows your availability of a Budget, your ambition to reach more people and time you need to spend on other things as your business grows.