DURING an economic recession small and medium enterprises
(SMEs) often adopt a survivalist mentality by focussing on cost cutting
strategies that ensure short-term success but, ignore long-term prosperity.
According to Gugu Mjadu, Executive Manager of Business
Partners, marketing tends to be one of the first spending areas to be cut when
times are tough. “Marketing is not only one of the most vital functions of a
business, but, counter-intuitively, the slower the economy, the more your
investment in your marketing efforts needs to be.”
Mjadu however indicates that such an investment does not
have to be in cash. “SME owners can cut their marketing budget provided they
increase their marketing effort in other ways, such as increasing their team’s focus on marketing, or spending more
time on it themselves.”
She offers the following insightful marketing tips to SME
owners looking to succeed in 2013:
- Cut the
waste, but be careful not to over-prune: This principle undoubtedly applies to
marketing efforts, in which 80% of a business’s success can be derived from 20%
of its marketing efforts. There is therefore plenty of opportunity to cut
activities that yield poor results. SME owners should subject marketing efforts
to the same rigid cost-cutting and efficiency that every part of the business
has to undergo in these tough times, but when doing so, they need to remember
that the results of marketing efforts are often pending. It can take years of
constant attention and experimentation before a business owner can be sure
which marketing plans actually work.
- Mine your
existing customers: It is a
well-established fact that winning over a new client generally costs six or
seven times more than winning repeat business from an existing customer.
Although some components of a marketing plan should always be aimed at gaining
new customers, a strategy to sell more to existing customers will almost always
yield more results.
Simple systems such as sending a note to a customer thanking
him or her for a purchase, together with a special offer for an additional buy
(plus a deadline to create a sense of urgency) can work wonders. Incentives
could also be created for existing customers to send business in your way. Offering
them a discount or a bonus for every new client they introduce is only one way
of doing it. Some businesses take a much more subtle, indirect approach - they
make the customer experience so amazing that they will tell their friends and
family about it.
compete on price: Most owner-managed
businesses are too small to compete based on offering the lowest price. That is
the preserve of multi-national corporations that can leverage economies of
scale to produce products at a price lower than SMEs and are able to source the
raw materials. Rather concentrate on
quality, the warmth of personal service and flexibility to meet individual
clients’ specific needs than on low price.
your message: It is very difficult to measure, but some studies show that it
takes about seven contacts to convince a customer to buy. This obviously
differs from industry to industry, but whatever the average, the principle is
that it will nearly always take more than one pitch to convince customers,
often via multiple communication channels or ‘touch-points”. For example, don’t
do one pamphlet drop, and then drop the idea because the results were poor.
Rather plan a series of them and evaluate it after the entire campaign. The
same applies to any other marketing efforts. Remember however that there is a
fine line between reminding a potential customer often enough that you are
there, and making a nuisance of yourself.
- Get a web
presence: If you are not online yet, you
are making a huge mistake. Even if you are happy with your customer numbers at
present, sooner or later your lack.
*Share your experience
of setting up your own business, or simply ask a question
. Our business panel can put you on
the right path.
Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.