How To Avoid Disaster In Your Small Business Digital Marketing Efforts Ross | January 22nd, 2013

Small businesses are changing how they spend their money on digital marketing. These changes are driven, in part, by the growth of social networks and media platforms. For example, in a recent report from BIA/Kelsey, 63% of SMBs said they use social media as a marketing tool for their business. In the last five years, the average number of media used by SMBs for promotion has nearly doubled (see chart below), putting increasing pressure on marketing teams and budgets.

fragmentation

Unfortunately, many small business owners don’t know where to focus their digital marketing efforts. In fact, a substantial number of small business owners are focusing their efforts on the wrong strategies. For example, in a recent survey, nearly 42% of SMBs reported that they use Facebook to acquire customers (see graph below).

facebookacquire

Misdirected digital marketing efforts are costly not only because they can quickly deplete marketing budgets, but also because they often require a substantial investment of time with little meaningful return on investment.

Let’s use digital marketing on Facebook as an example. Four out of five Facebook users have never bought a product or service based on seeing an advertisement or a comment on Facebook. In some industry verticals, online social networks would be the  last credible sources used by consumers to find products or services. In one study looking at consumer behavior, only 2.1% of respondents said that they started their search on social networks when looking for a lawyer.

Let’s say that you invest a vast majority of your small business marketing budget to acquire customers by building your Facebook community. Your goal is to engage that community and from time to time, market to that community. After spending a year building your community, you have a base of 2,500 Facebook fans. That’s not a bad result – most small business would love to be able to communicate with 2,500 potential customers who like your brand.

Does that mean that your Facebook posts are read by your 2,500 fans?

No.

Did you know that approximately only 16% of your fans will see your Facebook posts? Your community of 2,500 fans is, for all practical purposes, only 400 fans. Sure, Facebook will let you pay (sometimes outrageous sums of money), to reach more of your own community, but that makes Facebook marketing much more costly and often, prohibitive to most small businesses.  In our own experience, most Facebook promoted post efforts can help you grow your Facebook fan base, but will not help you to acquire new customers.

Given the vast number of marketing strategies and platforms where small businesses can invest their time and money, how can small business owners better focus their efforts to more effectively meet their goals? The graphic below is a useful start. It sorts  digital marketing efforts into three groups: acquiring new customers, new and existing customers, and primarily existing customers. For each group, it offers a handful of digital marketing activities and gives you a quick way to measure whether each activity is focused more on brand building or making sales. While the chart isn’t perfect, it is a very good place to start.

marketing_purposes

I’d love to hear from you in the comments below. If you’re a small business owner, where are you focusing most of your digital marketing efforts? If you’re a marketer working with small businesses, what are the common misconceptions about digital marketing you’re seeing among your clients?

 

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