Marketing on a Small Business Budget
I was talking to a small business owner yesterday about how to spend marketing dollars. She said, “I don’t have a bottomless pit of money.”
I hear similar comments from solo consultants and small business owners who request marketing help through CoLabourNation.
I get it. You’re fine with investing in promotion tactics that work, but it hurts when you spend money and get no results.
So, how can you spend wisely on marketing for your small business?
Below are 3 things you can do to avoid wasting marketing dollars
1. Understand enough marketing basics to know what you need
2. Define the marketing results you want
3. Clarify your marketing budget
Understand marketing basics
The foundation of your business is products or services that solve problems or meet needs that are urgent enough for people to pay you.
Ideal customers
Marketing helps you connect with the specific people who want your solution. To make your business profitable, you need to identify and reach more of your ideal customers—the type of people who purchase your products most often.
Customer journey
People follow a reasonably predictable journey with your products and services. Marketing helps them move from one level of relationship with your business to the next.
1. People become AWARE of your business and your products/services
2. They ENGAGE with your business and consider purchasing from you
3. Customers PURCHASE
4. Customers PURCHASE AGAIN
5. They PROMOTE your business to anyone who will listen
Now you know the basics of marketing, its time to clarify the results you want and need.
Define marketing results
I know you want more sales—me too. But lack of sales is probably a symptom of your marketing problem. The root cause is likely occuring earlier in your relationship with customers and potential customers.
Where are customers stuck?
Go back to the customer journey above and pinpoint the weak link in your relational chain with customers.
Are enough people aware of your business? If yes…
Do enough people engage with your business (comment on social media, sign up for your newsletter etc.)? If yes…
Do engaged people purchase?
Symptoms that more people need to be made aware of your business
• Traffic to your website is low
• Social media followers are low
• Visits to your store are low
If lack of awareness is your most urgent marketing problem, here are some marketing goals you could set:
1. Increase website traffic by 25%
2. Increase social media followers by 30%
Symptoms people are not engaged with your business
• Few people comment on or share your social media posts
• People don’t sign up for your e-newsletter (you have one, right?)
If lack of engagement is your most urgent problem, your marketing goals might be:
1. Increase engagement on your social media posts by 10%
2. Add 10 new subscribers to your e-newsletter/month
You have an inkling of what your marketing goals could be. Now, you need to decide what you will pay to get results.
Clarify your marketing budget
Wouldn’t it be nice for more customers to show up without you having to pay anything? But that’s not reality. Even posting on social media yourself is not really free because it costs your time.
So, how much are you willing to spend on your marketing? An even better question is, how much will you invest to get the results you want and need?
Let’s say your goal is to increase sales by $50,000. What is a realistic amount to invest in marketing to secure those sales?
There are many factors to consider, but one quick thing you can do is estimate your expected revenue against the price of a marketing tactic. This rough estimation gives you an informed gut-check on whether a specific tactic is a wise investment right now.
Expected revenue vs market tactic cost
When you hire marketing help, always ask, “What results can I expect from this marketing project?” A reputable service provider should be able to tell you.*
For example, let’s say you hire an email marketer to send out two e-newsletters/ month at $1500. She tells you that it is common for 3% of customers to purchase when they receive email marketing. Will your expected revenue pay for her services and more?
How can you figure it out? Take the number of people on your email list x 3% x your average sale. E.G. 1000 subscribers x 3% = 30 x $100 of your products = $3000/newsletter or $6000/month.
Real life is more complex. But this simple ballpark calculation will help you decide if the marketing tactic you’re considering has any hope of achieving the results you need.
*Not all marketing tactics can be clearly tied to return on investment.
Learn more
Do you want to boost your sales with the right tactics and talent? Download my free e-book Maximize Your Marketing Budget.
This informative guide includes common marketing projects, what kind of Canadian freelancers can help, and how much you will pay for marketing services in Canada.