Small businesses are closing at an overwhelming rate due to the economic climate. Often the fine line between survival and closing is reliant on the amount of marketing of the business is actually done. Unfortunately, when faced with a choice of where to cut in the budget, the marketing is usually the first to go. This should not happen – and smart businesses know this, and put their marketing budget toward a more cost effective and targeted channel – online marketing.
A Changing Landscape
In November, 2010, Ad-ology Research conducted a survey of over 750 small businesses to see where their marketing budget would be spent in 2011. The results showed that more small businesses will be putting their budgets toward e-mail (72.7% in 2011 vs. 56.6% in 2010) and website development (70.5% in 2011 vs. 57.7% in 2010).
What this shows us is that online marketing is becoming the way companies promote their goods and services. Traditional forms of marketing are not going away – there will still be direct mail pieces sent, flyers printed, telephone directories used, and billboards utilized, but overwhelmingly there is going to be great growth in the online marketplace.
Benefits of Online Marketing
Why would a company want to market online? First, there is a greater reach to consumers, and more opportunity for growth. According to Google, over 85% of consumers are going online first when looking for products and services - totaling over 16 billion search queries a month. Secondly, of the over 20 million registered businesses in the U.S., only about 5-10% have any type of online presence, and only a small percentage of those are doing anything to market their company online.
Online marketing is not just limited to having a website, and marketing that, or an email campaign to prospects and clients. There is also a great push toward the utilization of social media. For businesses that are following a business to consumer model, social media sites such as Facebook and Twitter are an excellent source to get new business as well as connect with your current clients. Social media sites gather personal consumer information at sign up that businesses can use to target their ads. These ads cost a fraction of what it does on a major search engine. Also, social media sites allow a quick update to your “followers”. Posting relevant, timely information can establish a company as an expert in their field, and who doesn’t want to be known as an expert in their own field?
With such a large untapped marketing space, there is great opportunity to grow. No longer do small businesses have to focus on their own backyard for customers - their reach is only as limited as they want it to be. With the right marketing strategy, their small business can change from a struggling shop to a profitable entity quickly.
As with all comparisons, it turns into a question of numbers and dollars. Small businesses using a traditional form of marketing can spend over $10,000 on a direct mail campaign, see less than 1% response, and then a smaller closing rate, and consider the campaign a success. If they took that same $10,000 and invested it in online marketing they could see a much higher exposure, greater contact rate, and much better closing rates because they would be targeting to the consumer who is specifically looking for their goods and services. For example, one of the companies I have worked with wanted exposure for his website. In one month, and for under $1,000, his web traffic increased over 20,000%. Another client I worked with saw a 500% increase in web traffic when he started utilizing an email campaign.
Online marketing is a powerful tool, allowing small businesses to compete with, and beat their competition. Those who take advantage of the opportunities have a greater chance of success over those who continue to use more traditional forms of marketing. As the landscape evolves, and new opportunities arise, what is your small business going to do to succeed?