How Should Small Businesses Divvy Up Their Marketing Dollars?

Good news, U.S. small businesses are on the move again, that is if marketing budgets are any indication. In three separate surveys (Forrester Research, Ad-ology, Network Solutions) almost half of small business owners are increasing their marketing spend this year. A lot of that spend is happening online.  Fifty percent of those surveyed are spending more on their websites and more than 40% are increasing their focus on search marketing and social media.

Many of those small businesses that wade into the new digital waters are quickly seeing results. One of our clients, the managers of a residential complex, rented out all of their vacant units within 4 months after setting up a straightforward website and using Google Adwords. By creating modest ads and a list of key words, they were able to cost-effectively reach a new set of customers. This business figured out how to leverage the online world to reach their target customer in a new way.

But while small businesses continue to expand their online marketing, we know that offline or traditional methods such as direct mail are still useful in landing new customers and growing the business. Which leads many small business owners to wonder, what is the best way to divvy up my marketing dollars? Should I put all my efforts into my website and social media networks like LinkedIn? Or should I stick with my tried and true routine of cold calling? Or is a combination of both?

In our experience, there is no simple formula. The marketplace, along with your products and services, is constantly evolving. And every business is unique – your accounting business has different marketing needs from the real estate agency next door. But all businesses share a common, and critical, requirement — understanding your customer. You need to know their likes, their dislikes, how they want to be serviced and more. Without that knowledge, even the best marketing efforts will fall short.

So how do you get that knowledge (and an effective marketing campaign to boot)? One effective way to discover what new marketing activity will attract new customers is to try, test, and tweak.

Test: Start with one new marketing activity. For example, does your company have a Facebook page or a Twitter account? If not, create a page or an account and count how many “likes” or “followers” you get in a week or month.

Try:  Now, try posting a special promotion and see how that impacts the number of potential customers who visit your Facebook page or respond to the tweet. Make sure you are measuring the results and that you are capturing all the leads to add to your mailing list. After a few weeks, you will get a feel for what activity that is producing the best results and you can move to the next step.

Tweak: Now you know the marketing activity that is effectively reaching your target customers,  you can tweak your page accordingly. What update or offers can you post to keep fans coming back? Can you incent them to find other fans for you through offering a special promotion?

Establishing a feedback loop such as this helps you to understand who your core customer is and what prospects may be looking for in your product or service. But it is not a one-time event. You must continuously try, test and tweak your marketing efforts to build your brand. Next week we will explore other measureable efforts to help you expand your brand online.

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