Small business owners are understandably hesitant about marketing because achieving the desired result is no easy feat. It seems that only a select few small businesses are able to boost revenue with marketing campaigns while the others run into cash flow issues. Members of the latter group might report year-over-year growth of approximately 5% despite spending tens of thousands of dollars a year on marketing. A business cannot grow if it doesn’t market itself correctly.
So, what are these companies doing wrong? Odds are, the mistakes they are making with their marketing strategies are nearly the exact same mistakes they are making with their overall sales strategies. Here are x ways to ensure a solid ROI for your marketing budget:
1. Prioritize Customer Retention
Successful businesses constantly rave about the importance of maintaining and eventually up-selling current customers. They urge their peers not to fall into the trap of believing their customers love their products and services so much that they will continue to buy them without being prompted to do so. But the truth is no matter how happy your customers were after their first purchase, you need to make a conscious effort to stay in their lives and remind them that you are looking to make them even happier the next time they give you their business. Customer retention shouldn’t just be a portion of your marketing budget. It needs its own budget altogether.
So, think of the budget for all of your marketing strategies, and then think of your budget for customer retention. Whether it’s through social media, email newsletters, or pay-per-click ads, you need to create a customer retention budget that is relatively comparable to the combined budget for all of your other marketing strategies. Loyal customers are your greatest salespeople, but they won’t refer their friends or family to you unless they feel their loyalty is valued.
2. Known > Unknown
A marketing strategy is only a failure if it has proven to do more harm to your business than good. Decent results are still results. But business owners often get bored or impatient and end up canceling marketing campaigns that are yet to propel them to new heights. They forget that while another strategy might look more promising, it’s different from the current one in that there’s no proof that it works. If they were to cancel the current campaign only to miss their shot at larger profits, they’d be in trouble. There’s obviously nothing wrong with wanting to try something new, but not if you can’t afford it without canceling everything else.
New strategies deserve their own, separate budgets and therefore shouldn’t be put into action unless you have figured out how to pay for them while maintaining the current campaign. The hope for larger profits is not a sensible excuse for killing a pipeline of incoming cash.
3. Be Realistic About Costs
Business owners are often shocked when they are advised to spend more money on marketing. But this is simply the way marketing works: You have to spend an increasing amount of money, regardless of whether the campaign is working or not. The cost of getting a new patient into your medical practice could easily go from $175 to $300, much like the way a monthly marketing budget with a goal of 50 new customers per month could go from $3,000 to $13,000.
The shock would wear off, however, if more business owners were aware of unsecured business loans designed for marketing campaigns. Certain types of working capital loans and credit card processing loans can give you the funding to outsource a digital marketing company or hire a social engagement specialist without having to make regular payments as the new campaign is first taking off. Your amount would be based on projected credit card sales, and digital marketing teams don’t gain good reputations by failing to achieve their goals.
4. When Sales Are Slow, Do More Marketing
A common mistake for small businesses is getting so distracted by the rush of the busy season that they don’t plan for the slow season. This is the time when businesses have to do even more marketing to make up for the revenue they lose when employees go on vacation and customers turn their attention elsewhere. A merchant cash advance is the perfect small business funding program for this situation because you could get funded in just one or two business days (even with bad credit), allowing you to launch your marketing campaign at the most opportune moment. If you time the campaign correctly, your payments would increase in size and/or frequency as the slow season comes to a close.
It’s understandable for you, the business owner, to want to take some time off during the slow season. You can do this when you have the funding to outsource a digital marketing company because they will maintain the same level of productivity when you are taking it easy.
Don’t Cut Yourself Off
At United Capital Source, we are aware that some small businesses must invest more, not less, in marketing when times get rough. They need to concentrate on making more sales and not letting leads disappear. This is why we offer numerous unsecured business loans that make sure businesses do not have to cut off revenue-generating activities, even though their industry’s financial cycle demands the opposite. While it might be tempting to cancel marketing to free up cash for one month, you’ll be in even deeper trouble the following month when no new customers are coming through your door.