One of my favorite headlines of late: “What Helps Small Business Grow? It’s Still Email.” That’s the title of fellow Fast Company Expert blogger Francine Hardaway’s recent piece, which looks at the return on investment for various forms of marketing that small businesses can utilize to get more exposure. Francine’s right on the money when she says email marketing still delivers the best bang for the buck, despite the increased number of ways small businesses can connect with their customers.
That said, the way Francine combines direct mail, traditional print advertising, email marketing, and social media marketing into a single bucket could be a bit confusing to the small business person trying to figure out how to best allocate his limited marketing dollar. Instead, the issue of figuring out how to allocate resources (time and money) for most small business owners hinges on two questions:
1. Where is my revenue coming from next month?
2. What’s the best source of new customers to keep my business growing?
To answer those questions, one must weigh the primary and secondary uses for each form of marketing. For instance:
Primary use: Create awareness in a “community.” Depending on the reach of the publication, community could be defined as a local area, state, region, country, or, in the case of trade publications, a specific industry.
Secondary use: Drive new prospects to your business.
Primary use: Stay connected with current customers.
Secondary use: Have them share your content with others via forward-to-a-friend or social media sharing.
Social Media Marketing
Primary use: Have conversations with customers.
Secondary use: Extend the conversation to others to generate interest in your business.
Print advertising is pretty straightforward. The costs are typically higher than online marketing and the ROI can be a bit harder to measure. It is what it is.
Email obviously has a high ROI, particularly for businesses with strong lists. Why? Most likely, the people on your list are people who have already bought from you and you’re trying to get them back. Email should have a high ROI. In this case, email can help answer the first question about where next month’s revenue is coming from. You can use it to keep top of mind with customers and entice them to come back by giving subscribers valuable content that’s useful to them. If a customer finds value in what you email them for free, chances are good they’ll shop with you when the time arises.
To grow your business, you need to extend your content to a wider audience to get new customers. Prior to the explosion of social media, the only way to do this was to get more people on your list or have a recipient forward your email along to friend and colleagues. Social media adds a whole new dynamic to the customer acquisition cycle as networks such as Facebook, Twitter, and LinkedIn allow small businesses and their customers to share content much more quickly with a far wider audience.
Plus, the “social” component of social media allows businesses to interact with their customers easily and publicly. For instance, a small business marketer can drive prospects to the company’s Facebook Page to share in the conversation with current customers. If the business has an active Facebook Page, prospects will hopefully see other likeminded consumers happy with your product or service, which can help accelerate the purchasing decision.
By taking Francine’s advice and breaking it into two pieces (where’s this month’s revenue coming from and what resources do I need to keep business growing) it may make the process easier to evaluate and execute on. It’s then up to the small business owner to figure out which mix of resources (again, time and money) works for them.