Whip-smart brand positioning drives revenues for enterprises from Apple to Zappos. But for growing organizations, cutting-edge marketing can feel like a luxury. The Small Business Association suggests companies budget 7 to 8 percent of revenues for promotion, yet the average small business allocates just 1 percent.
That’s a shame, given that marketing brings in more money than it costs. A Nielsen study revealed an average return on investment of $1.09 for every dollar spent getting offerings in front of clients. Remember, that’s an average. With a little planning, marketing can deliver serious returns for even the smallest of startups.
Getting entrepreneurs to invest in marketing begins by knocking down common misconceptions around it. Here are the top three.
Lie No. 1: I don’t really need marketing
It’s easy for many small-business owners to make a virtue of necessity by minimizing their need for brand promotion. There’s an intuitive logic to this lie that makes it seductive. Growing organizations often cultivate local followings, connect with their customer base using grassroots techniques and rely on word of mouth to spread their reputations. If they’ve experienced some success, they can convince themselves that marketing isn’t a significant driver of revenue. Better to plow those funds back into avenues that create value.
Can small businesses get away with cutting corners like this? Occasionally, but not for long. Companies that skimp on marketing rarely fare as well as they would have if they’d invested in promotional channels. Many entrepreneurs whose startups failed regret underspending on advertising, brand management and strategic initiatives.
The Truth: The numbers don’t lie: Everyone needs some marketing. The key is to do outreach that fits your brand’s needs with the budget you have. Getting bang for your buck is getting easier in the digital age. Buildfire, an app builder for small-scale entrepreneurs, suggests starting with these options for maximum impact:
Google My Business and AdWords
Promotion of free consultations and referral incentives
Lie No. 2: There’s no way to know whether marketing makes a difference
You just put a firm on retainer. You’ve got big plans and even bigger hopes, but what do those dollars actually do? For many growing companies, it’s hard to answer that question. Sure, they get the occasional customer who mentions seeing an ad on social media or who subscribes to the email newsletter. But beyond that, who can tell?
Part of the reason for this fog shrouding marketing performance is simple: Lots of small businesses simply don’t keep track of it. A recent survey found almost 45 percent of its respondents didn’t measure ROI on their digital marketing spend. Those who do can be prone to miscalculation, sinking money into underperforming promotional outlets.
The Truth: Success rests on making informed decisions. If a service costs your business more than it benefits you, find an alternative. You wouldn’t continue to use certain materials if they didn’t shore up your bottom line. You wouldn’t tolerate employees who didn’t contribute to your company’s success.
Marketing is like any other facet of your business. You can’t improve performance if you don’t know where it’s at now. Track ROI to evaluate and refine your approach. With all the advances in digital analytics, there’s no excuse not to follow the metrics in your marketing. Small-business owners have found these automated tools especially helpful in scaling their outreach efforts:
Lie No. 3: I can’t afford top-notch marketing
Maybe your small business needs marketing, and maybe you can see the difference your investment in promotion is making. But embarking on the kind of next-generation campaigns a Fortune 500 company runs? That’s impossible. Entrepreneurs running smaller organizations feel caught between the two options they think they can afford.
Do all your own marketing. This saves money, but it costs valuable time. And if you don’t have the background, you might be sacrificing growth, too.
Hire a local marketer. Small businesses like to support other small businesses, so why not rely on in-town marketing firms? Depending on what kind of talent is in your zip code, you might have better or worse options.
The Truth: Handling all marketing internally or outsourcing everything is a false choice. Companies can get expert help with the channels they’re unfamiliar with through a la carte models. Marketing isn’t an all-or-nothing proposition.
Shoe brand K-Swiss knows the ins and outs of social media marketing, but because it wasn’t sure how to broaden its audience beyond “sneakerheads,” it enlisted Hawke Media. Both in terms of K-Swiss’s budget and marketing know-how, a full-service agency simply didn’t make sense.
It’s easy for startup leaders to lie to themselves about their need for high-quality marketing, the difference it makes and what they can afford. But with a focused investment, any company can profit from good promotion. And that’s the truth.
This content was originally published here.