Growing Your Small Business Through Marketing

Small businesses working to drive growth through marketing should follow several important steps. But before investing in any marketing endeavor, it is important for owners to understand where their business stands and by extension, what marketing strategies make the most sense. This can be accomplished by running a self-assessment of the business by outlining:

• Your Offering: Are you offering a product, service, or commodity? Each contains their own benefits and challenges in crafting an experience customers will gravitate toward.
• Your Margins: Are you offering a premium product with a high margin or are you offering a low-cost, low margin product that depends on high-volume sales? High volume products will need a broad marketing strategy while premium products will likely require a more targeted, niche approach.
• Your Available Resources: What stage of growth are you in and do you have the budget to fund traditional advertising? Early-stage companies with lower marketing budgets may want to employ viral, guerilla marketing strategies designed to raise awareness through organic social media buzz, while more established companies may choose traditional advertising campaigns designed to promote an established brand or product.

Next, calculate your expected customer lifetime value (“CLV”) by customer type, and design marketing campaigns that can deliver new customers at a cost that is well below your CLV. The simplest calculation for a CLV is your Average Sale Price x Gross Margin per Sale x Average Amount of Sales per Customer. As an example, if your average sale price is $100, your average gross margin is 50%, and your average customer makes 3 purchases over their lifetime as a customer, then your CLV would be $100 x 50% x 3 = $150.  If your CLV is $150, you can’t be paying $150 per Google click. Simple as that.

Be sure to prepare and record your marketing and sales data by customer, product, marketing channel, cost per lead and conversion rates. There are many software solutions that can assist you in recording this data but even a simple data table in excel would suffice as long as you remain vigilant in consistently recording your vital data points. Understanding the conversion rates of each product by its respective marketing channel will inform you of which marketing tactics are working, and which are not, and will help you identify opportunities to capitalize on.

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Once you have a firm understanding of your products, sales, and customers, it’s time to maximize your marketing opportunities. Here are some tips that could make your small business brand a success:

1. Tell your story and make a connection:

One story-telling tactic is to show customers a “behind the scenes” look through short videos (Tik Tok, YouTube shorts). Videos on how a product is made or a “day in the life” have become popular among startups and small businesses and are relatively inexpensive to produce and share.

2. Find your brand advocates:

Finding advocates should be a dedicated approach, and centralizing your efforts is key. Ask yourself if there are any common traits or characteristics of your current customers. These insights can help you identify the broader audience in which you’ll find your advocates. These advocates can help spread the word about your company virally, for free.

3. Join the (right) discussion:

Consumers today want to be associated with like-minded businesses. It’s important to share an authentic voice with the right audience. By joining Facebook groups centered on a specific audience and participating in the discussion, you can connect with audiences that are aligned with your vision. Platforms like Parler were conceived on this idea.

4. Cater to buy-local mindsets:

Cross-selling partnerships within the neighborhood, like when the local butcher promotes a nearby wine store, or a sporting goods store promotes a local soccer clinic, are an inexpensive method for expanding your reach. In some examples, these types of partnerships have led to co-sponsored events/experiences such as dinner ideas with accompanying wine pairings that put a new spin on your current offerings.

5. Lean into exclusivity:

This tactic can be especially beneficial if your product is a high-ticket item.  Create invite-only events and capitalize on seasonal trends, especially as they relate to food, clothing, and local experiences.

6. Leverage/Offshore fixed costs:

Fixed costs such as rent or storage can eat into your cash flow if they’re not fully utilized. Excess floor space or storage can be rented out to complimentary or neighboring businesses, freeing up your capital for other growth initiatives. On the other side of the spectrum, if your business is in its early stages and renting entire floor spaces is not a viable option, seek out opportunities with other businesses who may be looking to leverage their excess space.

Regardless of which path you take, growing your business starts with building a strong foundation and knowing your business inside and out. By evaluating your current business model, identifying your key opportunities, and positioning yourself to track and measure the right metrics, you’ll be well equipped to take your next big step.

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