In a nutshell, the best type of marketing for small businesses is one that delivers the best results and the lowest customer or client acquisition cost. But if we are to look deeper, you as a small business owner or a marketing manager need to know the following:
There are really two types of marketing out there: inbound and outbound.
Inbound marketing focuses on attracting your prospective customers, clients or, in the case of a healthcare facility, patients, organically. They come to you because they found you online.
Let’s focus on inbound for a few minutes and talk about this effective marketing strategy for small businesses.
Inbound marketing is most effective for small businesses. As of 2023, the overwhelming majority of inbound searches happen in Google.
When people have commercial intent, when people want to buy something, we all tend to use Google to search for topics, companies, service providers or products related to it.
Our search rolls out in phases.
Phase number one is awareness. You’re aware that you have a need, a want, or a desire for something and you may start looking for something in that category.
If it’s a need, you will say: you know I have this problem and I need to fill it and I don’t really understand how to fill it yet so I’m looking for answers to this problem.
In the next phase after awareness, you go into consideration. Now that you know what the problem is, now you’re considering various types of solutions for the problem that may be vendor agnostic. It doesn’t matter what your business is, it doesn’t matter the brand name of the solution or the service or the product. You’re just looking for various types of solutions to the problem or need.
Then the final stage is in making a decision. Once you go from awareness to consideration to the decision stage, you’re looking for particular solutions with particular vendors or manufacturers and you’re trying to decide whether you actually want to buy from vendor A, B or C.
For example, I am recording this video using a Canon AE-D camera. Before buying it I searched the best types of cameras for recording this type of video. Canon AED in my research was the best camera but my research started with the phrase: “what are the best cameras for vlogging or how to do blogging?”
When I would start researching vlogging, I would read different articles that instructed me on the best process for production; what equipment to use, how to publish, where to publish, how to engage viewers, etc.
One of the aspects the articles mentioned was the need to get a camera and a tripod and a microphone and a light. So my team went out and they started researching what kind of camera, tripod, we needed to buy. Through those phases we got to the decision that we need this type of camera, this type of mic, this type of tripod, this type of light. You get the idea.
These were phases. Was this a big buying decision? Not huge, everything in total cost about $1,500, but people go through the same type of decision-making process whether they’re buying something relatively inexpensive or something that’s very expensive (like consulting services, marketing service, legal service, etc.).
Whatever it may be, we all go through this process. It applies to products and it applies to services. It is best, if you’re a small business, to attract people through inbound marketing.
Does inbound cost money to produce? Absolutely. But typically that inbound marketing, when done right, is offset by the revenue you generate as a result.
Every client that you acquire costs you just a fraction of the revenue that they generate. It is not atypical for a small business to spend between five and twenty five percent per customer depending on the type of business that we have to attract a client.
If you provide services and you may have an opportunity for recurring revenue, this could be nothing if you think of it in terms of the entire lifetime value of the client.
Let’s say an initial spend of that client with you could be $200 and you may want to spend 50% or 100% of that revenue because you know that over the lifetime of the relationship that this client has with your business they may be spending $20, 000 or $5,000 or $10,000 — it will be substantially more than the initial transactional spend. This is a very smart way to think about marketing.
When you acquire a client, you do not get a client to make a transaction or sale, you make a sale to acquire a client. This applies to many businesses. If you’re just selling products, this does not apply to you. So whenever you think about the types of marketing that you’re going to do the most expected way to measure it is:
So, one way to execute an inbound marketing campaign is by creating content and posting that content across channels on your website, and on your social media pages like Facebook, Instagram and so on. Of course, the business type you have will dictate the best social media channels for your business.
The other type of inbound marketing strategy for small businesses could be as simple as running ads on Google. It’s the common strategy deployed by Digital Agencies. Ads work incredibly well with people who are ready to buy here and now, today. And as you think about what you’re selling, you’ll realize that the vast majority of people today are not ready to buy.
Although these prospects may buy your product or service in the coming months, they might not be ready to buy them today. They may simply be searching because they’re looking for information to prepare them to buy a few weeks from now or a few months from now.
When you think about the most effective marketing for your brand and your company, it is best to break it down into:
What is effective for people early in the buying journey is information that answers their questions, as it guides them through their buying process. Once they’re ready to buy these prospects will be biased in your company’s favor as they were able to find the information they needed to make their buying decision from your business.
They will then all on you, visit or make a purchase on your website depending on the type of business that you have.
So what type of information do you provide to them? Think about it in terms of the questions customers ask. If you know what questions they ask, you know what type of information they are looking for. And that is the type of information you need to include on your website, blog, and social media channels like LinkedIn, Facebook and sometimes Instagram – definitely if you’re a B2C geared towards a young generation, then even Snapchat.
So it is all about providing your prospective clients and customers with useful information on the places they search for it.
My formula is: “be where they are when they’re looking for you.”
When you talk to your prospects and answer their questions, learn from them. What questions are they asking? Use those questions to provide them with the right information when they’re ready to buy. Use their questions as the basis for your content marketing.
It is really super simple but most people do not think about it in these terms. Most companies big and small do not provide adequate amounts of information packaged in a concise way to help their prospects buy from them.
It’s very expensive not to provide the right information because, especially if you’re spending money on advertising and marketing, people still will not buy from you. They will instead go to your competitors that do answer their questions and buy from them.
You know things that you need to provide to the clients when they’re looking for information, things that you need to provide to the clients when they’re ready to buy. Now there is the other type of marketing, and that’s outbound.
Outbound marketing focuses on sending out messages, cold-calls, communications or advertising in an attempt to attract prospects.
Inbound means attracting. Outbound means you’re trying to get the message across by sending it outbound.
Typically inbound works quite a bit better because when you’re trying to attract someone, chances are they’re going to be attracted to you when they have a problem, a need or a want that needs to be filled (i.e. something that you have to sell).
When you run an outbound strategy, you may be targeting thousands, tens of thousands or even millions of people (in the case of larger companies) in the hopes that you will convert a few of them to paying customers. Many of the people you’re trying to target when you go outbound, however, are likely not looking for what you have to sell.
Whereas inbound strategy is highly efficient. If prospects are looking for something that you have to sell, they will find you. Inbound marketing allows prospects to find you when they, voluntarily, are searching for the exact product, service, or expertise and information your business has to offer.
Is it effective? It can be incredibly effective. But when I say “incredibly effective” it means that you can generate enough business to meet your revenue objectives and you could do it cost-effectively. However, typically outbound marketing does require more resources, time and effort.
Why? Because now you’re going after a much wider group, a majority of which may not be in the market for whatever it is you are selling.
Think about it this way: outbound marketing includes broadcast advertising: billboard, radio, TV, newspaper and direct mail. While most people don’t read newspapers anymore, as of 2020, there are still major newspapers distributed across the US in hundreds of thousands of units per day. So there is still a demographic buying them.
If you post an ad on a billboard, in a newspaper or on the radio or TV you can expect that the overwhelming majority of people who come across your ad will not respond because it’s not applicable to them.
Now here’s what does work for outbound marketing. If you are a B2B brand selling something that’s fairly high-end, LinkedIn can work incredibly well. Why? Because if you can pinpoint the LinkedIn audience for your product or service in a certain period of time, you can develop a channel of communication via direct message. It’s called paid messages or sponsored messages.
Is the open rate high? It’s not. As of 2020, I think it’s definitely under 3% but it’s there, people do open these messages, especially if your subject line catches people’s attention.
Does it cost a lot of money to do it? It does not. But you need to be prepared that this is going to be a very long-term game. You will need to communicate with many prospects many times, over time, to get a client. However, it’s very inexpensive and fairly effective, so you can do that.
What other types of outbound marketing still work incredibly well? I don’t really know. I think that a lot of it, aside from going directly to the right type of people, is highly ineffective because you’re just broadcasting a message to so many people.
So, when small and midsize businesses come to us for marketing consulting, we usually recommend an inbound approach. It is a lot more effective and cost-effective.
We look at where the attention is going — which means where your prospects are looking for information that relates to your business. They might be looking on Google, Yelp, or YouTube, and so on. Wherever they are, is where your marketing efforts need to be.
Second, I would give them the information they need to make a decision; to help them advance from an awareness stage to a consideration stage to the decision stage that I described in my previous article.
This all swings the bias in your favor.
Now, one advanced tip here is that just because you attract prospects doesn’t mean that they’re always going to buy from you. So the second priority after attracting them should be converting them.
Converting their attention to leads, which is basically their contact information. This will allow you to see who raised their hand and said I am interested in whatever it is that you’re selling or I have a problem that you can help me solve. Then, gently, not annoyingly, following up with them over the term of weeks and months and possibly quarters and years until they are ready to buy.
How do you do that? We believe that the best way to follow up with people is to deliver very valuable information to them and here’s how we do it. Let’s suppose that someone visits your website and gives you their contact information because they signed up for a trial or downloaded a checklist, guide, or white paper on your website.
Now you know what kind of problem they need to solve because that checklist, white paper or form definitely helps them learn something. And that learning is associated with a certain problem or need they need to solve.
Anyone who downloads material from our site, or fills out a form, is someone we know has many additional questions that they need satisfied in order to make a buying decision.
What we would advise our clients and this is what we do for clients, is to create a sequence of emails that would be delivered over a long period of time to help clients learn answers to their questions, so they become much better-educated consumers and make the best buying decision.
By supplying those emails over a period of time – emails not promotional in nature but educational in nature — you are building trust and establishing a rapport with the prospective client or customer. Because the information you’ll be providing isn’t sales-based or self-serving — and geared towards helping inform them — they will develop a natural bias towards your company.
More of these prospects are going to actually reach out to you when they’re ready to buy.
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