SMEs – businesses with fewer than 250 employees – account for 99.9 per cent of all UK businesses. And of those, small businesses (those with fewer than 50 employees) account for 99.3 per cent of the UK’s 5.9 million businesses.
SMEs are clearly a vital part of the economy but getting established and growing the business is a major concern. Research shows that 79 per cent of SMEs consider attracting customers their most important challenge. Increasing revenue was on the ‘most important challenges’ list for 59 per cent of respondents and maintaining profitability was mentioned by 51 per cent of SMEs. How can SMEs rise to these challenges?
In a word: marketing.
For SMEs, particularly younger ones which don’t have formal marketing staff, marketing can be a bit of a mystery. The Chartered Institute of Marketing defines marketing as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably”. Marketing is not advertising. It is not sales. It is not social media. It is not people handing out product samples on the street. Those are activities that may form part of a marketing strategy, but they are not marketing. Marketing is a strategic undertaking, like financial analysis and forecasting.
SME marketing follows many of the same principles that large businesses use for marketing. Perhaps the most significant difference is SMEs have fewer resources overall than a large national or transnational business.
Barbara Findlay Schenck, author of ‘Small Business Marketing Kit for Dummies’ says that, regardless of these limitations, the marketing cycle remains the same:
- Customer, product and competitive research
- Product development
- Labels and packaging
- Advertising, promotions and public relations
- Customer service
- Go back to number 1
While large companies can spend simply to build brand recognition, says Schenck, SMEs must be careful that their marketing produces immediate and measurable activity in the market. Preferably activity that generates revenue that at least offsets marketing costs.
In SME marketing planning may reside in the leadership team, at least until dedicated staff can be hired. Don’t despair! As a leader of the company, perhaps even a founder, you should be well placed to answer the most important question in marketing: Why you?
Its sounds simple, but it’s key. You should be able to explain, concisely, why your company is the right choice compared to your competitors. You should also know why your customers choose you over your competitors. Market research can help you get these answers. Most importantly, it can help determine if your customers agree with your self-assessment.
So, now that you know ‘why’, it’s time to figure out the ‘how’. How can you, as a non-specialist, form an effective marketing strategy?
First, define your target. Who do you want to reach? Are you marketing to consumers or to other businesses? Are you targeting other SMEs or larger businesses? They have different concerns, so your message to each will be different.
Second, define your message. Effective marketing typically focuses on a single, easily understood message. Even if you’re going with a long-form asset, such as a whitepaper, it must have a coherent message.
What do you want them to do? Is the goal of your marketing to trigger customers to buy? This may be a reasonable expectation for a promotional discount on printer paper targeted to office managers. It’s an unrealistic expectation if you’re pitching industrial equipment costing hundreds of thousands of pounds to a manufacturer. A realistic expectation in that case is to generate a request for more information.
Finally, measure the results of your activity to see how effective your marketing is. You can do this many ways, such as setting up a special phone line to receive calls for a campaign or a special promo code to track who is responding. Make sure you measure your business activity ahead of your campaign so you have a basis for comparison.
At each of these four stages, it can be worthwhile to engage specialists to help in the actual preparation of assets, their distribution and post-campaign analysis.
Whatever strategy and means you choose, whether social media, print advertising, bespoke content or a combination of activities, you must constantly reassess your position and your market. The business landscape is constantly changing. Being able to communicate to customers why your business is still their best choice will become more important as the speed of change increases.