A common statistic that haunts many small businesses is that 50% of all small businesses will fail within five years. This is generally due to the high costs associated with acquiring new customers.
Many new small businesses break their marketing budget because they don’t know how to optimize their budget to increase profit margins. Instead, they continue to do the same things over and over again with no results.
Luckily, we have come up with five things you can do to maximize your return on your small business marketing budget.
Understand the Profit Value of a Customer
Getting a small business loan is a good way to get some capital for marketing. However, how do you know whether a marketing channel is worthy of your investment? Loans are not cheap, so you want to make sure you’re spending the money wisely.
For example, Yelp ad clicks cost between $50 and $70. However, this marketing channel provides you with customers that are ready to buy. So is this cost worth it? Well, that all depends on the profit value of your customer. If a customer is worth 1000s of dollars, then spending $70 to get that customer is worth it. However, if a customer is only worth $10, spending $70 to get $10 worth of business doesn’t make sense. Therefore, determining your customer’s profit value will help you get the most out of your small marketing budget.
Improve your Targeting
To optimize your marketing budget, you need to make sure you’re targeting the right people. A common mistake businesses make is spending time marketing to people who will never buy their product or service. Instead, you need to be looking for the people who don’t need much convincing because they’re already in the market for what you’re selling, and so they’ll likely buy from you. For example, if you were selling small business banking plans, you would want to target small business owners, not corporate CEOs. By targeting the right people, you can cut your customer acquisition costs by 13% while increasing the said customer’s lifetime value.
Benefit from Free
There’s no better way to maximize your small marketing budget than with free. A lot of people and businesses offer things for free. Some offer part of their service for free in the hope that as you grow, you’ll become a paid customer. Others provide free advice to demonstrate that they’re subject matter experts. Here is a list of marketing things you can get for free:
Optimize your Website
Your website is the home for all your marketing efforts. It contains your landing pages for your ad campaigns, and all your published content lives there. Furthermore, your product and/or service pages call it home. Therefore if it doesn’t offer a seamless experience, your brand and business will suffer. To optimize your website for growth, you should do the following:
Nurture Your Leads
Sometimes businesses spend a lot of money building awareness through marketing, and then when they get a lead, they forget to follow up on it. This is usually not intentional. It usually happens because you’ve overlooked the moment when a person has transitioned from a follower to a lead. A follower becomes a lead when they provide you with their contact information. The goal with your marketing should always be nurturing people towards becoming a lead. This can take many forms, such as call-to-actions, interacting on social media, and offering incentives for people to give their information.
You need to optimize your marketing strategy to get the most out of a small marketing budget. This means not wasting time targeting the wrong people and understanding the profit value of your customer. Furthermore, you should look for marketing tools you can get for free, and you should optimize your website for growth. Lastly, make sure to nurture people towards becoming leads by adding calls-to-actions to social media posts and ads, engaging with followers on social media, and offering incentives to people to get them to give you their information.