One of the key metrics small business owners are focused on is growth. Without growth, your business stagnates and you’ll be overtaken by your competitors.
Growth is achieved by reaching more customers and getting your product in their hands. Most of the time, you can do that through marketing.
Marketing is a complicated term. When most people think of marketing, they picture Coca Cola ads plastered across billboards and expensive TV ads for life insurance with happy, smiling people. For small business owners, marketing looks very different. You’re on a budget, and those sort of marketing tactics are not going to get you anywhere.
This is a guide for small business owners to get you started on the right marketing path for your small business. Inside are 5 marketing tips for small businesses that you should use when deciding how to grow your business.
Let’s jump right in!
Step 1: Understand Your Customer
The first and most important step of any small business marketing is knowing exactly who your customer is. What that means is building a customer profile. Think of it as a description of your ideal customer.
The best way to go about this is to imagine your ideal customer as a Facebook Profile Page. You’re looking at their page, what do you read in the About section? Some questions you should be considering:
- How old are they?
- Are they male or female?
- Are they a business owner?
- What do they like to do in their spare time?
- Do they have a family?
These types of questions are going to give you a profile of the type of person you are trying to reach. Try and get as specific as possible and go into both:
- Demographic (statistical data about where they live, characteristics etc.)
- Psychographic (emotional information about how they think, aspirations etc.).
The more specific you are, the more likely you’ll be able to reach them, which leads right into our next tip.
Step 2: Understand Where to Reach Them
Once you know who your customer is, you need to find out how best to reach them (also read: Market to them).
Luckily for small business owners, there are a ton of tools available that help you reach potential customers. This has come about as a result of the data-age, and social media companies like Facebook and LinkedIn, and search engines like Google, developing advanced algorithms to profile potential customers.
Top tip: Check out Facebook’s Ads tool. You’ll be able to check what demographics and interest data points you can target potential customers with. You can use your results from Step 1 to do that.
Here is a brief list of places where you can find potential customers online:
- Facebook Ads
- Google Ads
- LinkedIn Ads
- Online Forums
Don’t forget that your customer base might also be offline, in which case it might be more efficient to reach them using local newspapers or other hyper-local location-based strategies!
Step 3: Know Your Metrics
For any marketing strategy to work effectively, your unit economics have to be right. That just means you have to be acquiring customers for less money than what they are worth to your business in terms of revenue generated over their lifespan as a customer.
Two important metrics to consider here are:
- Customer Acquisition Cost (CAC)
- Lifetime Value (LTV).
Here’s how to work out your LTV:
- Using your historical business performance, work out how much each customer transaction is worth on average ($10 USD)
- Then work out how many interactions on average a customer has with you. Is it a case of a one-off transaction, or do you capture a customer for life once you’ve had their business once? (3 interactions)
- When you multiply the two, you get your LTV ($30 USD).
Your customer acquisition cost should always be significantly lower than your LTV. Remember, your CAC does not include any operational costs. If you’re spending too much money acquiring new customers, you’ll reduce your profit margins.
So set a target CAC based on your business metrics, and then stick to it.
Step 4: Use Data
A new age of consumer data means you’re able to refine your target to a granular level. This is super powerful. It means you can reach exactly who you want to, rather than using the traditional shotgun marketing approach where there are a lot of misses for very few hits.
Part of your strategy should be collecting and using customer data to your advantage. One way to do this is to use what’s called a Pixel.
A Pixel is a little piece of code that you can easily install on your business website. What it does is anonymously tracks who visits your website, and lets you use that data to create audiences. So if your website is attracting potential customers, you can target those customers on Facebook and Instagram.
Google has the same piece of code available to use!
PS: If you’ve ever been on a website and then started seeing ads from that website while browsing the internet elsewhere that’s your Pixel’s at work! This is called remarketing.
Step 5: Be Agile and Iterate
The most important step of modern-day marketing is: Constant evolution!
Marketing is no longer just ‘set and leave’. It requires constant monitoring, tweaking and improvement to be effective. You need to stay on top of your metrics. Be ready to shut down channels, and ramp up new channels quickly when they’re working or not working for you.
Here’s an overview of how you can make sure you’re staying on top of things:
- Set some guideline KPI’s. These are numbers that will describe your successful marketing campaign:
- New clients, etc.
- Set reviews on each of your acquisition channels weekly. Compare them to your KPI’s.
- Check on the customers you’re acquiring from each of those channels, are they converting? Are they turning into paid customers? Always be aware of ‘false successes’ like growing your database, but not revenue.
- Ramp up the budget or shut down channels as needed.
- Keep in mind that scaling from $1000 monthly spend to $10 000 monthly spend is not as simple as increasing your campaign limits. Scaling up spend does not mean your metrics will stay the same!
Stay agile so that you can respond to a constantly evolving market.
There you have it! These 5 marketing tips specifically for small businesses should help you improve your efforts so you can acquire new meaningful customers that grow your business.
- Know your customer
- Understand how to reach them
- Know your metrics
- Use data to augment your efforts
- Be agile and constantly iterate