When did “clicks” become currency?

According to the U.S. Small Business Administration (SBA) a company with fewer than 500 employees is categorized as a “small business”. Yet when most of us think small business, we probably picture a much smaller employee count than 500. I picture a storefront of some kind with just a few people inside to help customers, stock shelves, sweep floors, etc.

Of course, the real landscape of small business is much larger and includes clothing stores, restaurants, dry cleaners, car washes, yoga studios, doctors, dentists, attorney’s and so many more.

How could all of these different small business categories share similar marketing needs?

Here’s how. All small business owners share a common goal:

To make strong personal connections with desirable customers in order to compete with big business (and others) despite inherent disadvantages in price, selection, convenience and in some cases, service.

How do I achieve this personal connection with my desired customer?

First things, first. Get them to walk in your door.

In order for that to happen (in most cases) you’re going to need… big surprise… marketing.

As small business owners, it’s our job to stretch every dollar to accomplish our businesses marketing goals. I learned first hand this is no easy task, especially when there are so many other challenges owners are faced with. Every business owner knows that marketing is needed but…

what kind, when, how much, and when do I have time to make these decisions?

When push comes to shove and bills begin to stack, many of us choose marketing as the first place to cut.

What if there was a solution that answered all the questions, solved all the problems that marketing poses AND substantially moved the revenue dial?

To tackle this billion dollar question, let’s start by looking at today’s small business marketing landscape. I compared traditional marketing with digital marketing (for small business) and graded the value propositions they offer.

As technology further pushes the evolution of marketing, the level of expected value of the marketer should run in-parallel. A major problem with the landscape is this value proposition has always been skewed towards the marketer and away from the small business owner — they win even if we do not.

As hard working small business owners, it’s time that we demand more from our marketing providers. To help clarify, I’m going to break down what I consider 3 levels of value for Small Business Marketing, and how they stack up in 4 categories: pay-first, quantifying campaign results, reaching your target customer, and learning about them.


#1 Low Value Marketing (LVM)

“Traditional” marketing: newspaper/print, radio, television, billboards, fliers and similar mediums.

Pay-First | Rating: F

Traditional marketing is a pay-first and hope-for-later proposition. This is rarely a winning formula for small business.

Quantifying Campaign Results | Rating: D

Its extremely challenging for small business owners to quantify the results of this type of marketing, which often leaves more questions than answers.

Was I busy today because of the new ad I put in the school directory or was it the beautiful weather we had?

Which marketing do I continue and which should be discontinued?

All of this is enough to make someone crazy. (I know, because many times I’ve been that someone.)

Reaching Your Target Customers | Rating: C-

While LVM casts a big net, it fails to consistently reach the desired target. Communication is often lost in a sea of diluted messages using LVM and results are mixed at best.

Very seldom does traditional marketing make an impact with people, thus rarely will it lead to a personal connection with your most desired potential customers.

Learning About Your Customers | Rating: D

When LVM marketing does work, it leaves many questions about your new/returning customers in its wake. From the basics (name & email address) to the more intimate sought after information like birth date, children’s names/ages and purchasing habits.

It’s great to get a new customer through your doors, but how do you bring them back if you don’t know who they are or their core interests?

Low Value Marketing | Overall Rating: D

Traditional marketing (as described) is LVM for small business because, simply, it leads to a higher net customer acquisition cost. Over time, using it excessively will put your business at risk. For this vital reason and because traditional marketing rarely assists in making a sound personal connection, it gets a failing grade when used by small businesses.

#2 Medium Value Marketing (MVM):

According to Data Giant SAS, “Digital marketing; is the promotion of products or brands via one or more forms of electronic media and differs from traditional marketing. It involves the use of channels and methods that enable an organization to analyze marketing campaigns and understand what is working and what isn’t — typically in real time.”

Over the last decade, mainstream online or digital marketing has outpaced all other forms of marketing, by far. From the tried and (sometimes) true email marketing, to the various forms of paid online ads, there’s little doubt that these options will only continue to evolve and expand. But how much is enough, or too much? Let’s see how digital marketing stacks up against traditional mediums in the 4 categories:

Pay-First | Rating: C-

Digital marketing has a leg up on traditional marketing in this category. Online ads are a perfect example of the evolution of marketing. Business owners pay for clicks rather than just views, as in traditional marketing. While certainly an improvement, it lacks a solid answer to an important question any small business owner has- how many of these clicks lead to a sale? In effect, a small business owner is still just paying for clicks. Only after you factor in a conversion rate can you establish your true customer acquisition cost. While pay-per-click methods work well for online businesses, this model is not effective for brick and mortar business. From my perspective, this method needs improvement.

Quantifying Campaign Results | Rating: B+

The science of understanding the ROI on marketing efforts can be traced back hundreds of years. Back in the late 1800’s, marketing pioneer, John Wannemaker was famously quoted,

“Half the money I spend on advertising is wasted, the trouble is I don’t know which half.”

It was only until the digital marketing age that small business could get instant results on their marketing campaigns. This has made marketing much more efficient and dramatically improved the ROI for small business owners.

Reaching Your Target Customer | Rating: C-

For all the technology advancements designed to improve efficiencies, the customer acquisition and retention challenges facing today’s small business environment seem, for many of us, as daunting as ever. Knowing precisely who to market and how far (or near) we are to reaching our target is no longer helpful, it’s critical.

Yet, between Facebook, LinkedIn, Email and all the other current and emerging digital mediums, deciding which strategies to pursue, and determining the exact how’s & and when’s, can be overwhelming, leading many small business owners to paralysis by analysis.

For online businesses, targeted marketing is not as crucial. Product or services sold through E-commerce transactions are easily shipped across the country or world. There is a clear distinction between E-commerce and Brick and Mortar business. Many local small business owners don’t aspire to build customer channels to the other side of the country (or world) and would prefer not to pay for their clicks.

Facebook certainly raised the bar with targeted digital marketing when they enabled small business owners the ability to filter location, gender, age and interests (among others). This was a huge step forward for targeted marketing progression and certainly made MANY small business owners take notice.

Despite a few flaws with their model, this helped propel Facebook to the lead in the trek to the small business marketing summit.

Learning About Your Customer | Rating: C+

As a small business owner, I have repeatedly encountered two huge obstacles with digital marketing. Time and money.

There’s no doubt that an aggressive digital campaign can move the revenue dial. Information about our customers can push sales to our doors. A savvy business owner or digital marketer can get almost as much information as needed regarding current and prospective customers. A select few small business owners have developed systems to sort and analyze this information; and for good reason … it works!

Regardless of the improved options digital marketing has provided small business owners, it still takes substantial Time/Money to process the information and drive revenue.

Medium Value Marketing | Overall Rating: C+

Unfortunately, so many small business owners are too busy working IN their business that they can’t spend enough time working ON them. This common circumstance leads to challenges with their digital marketing strategy.

In my case, I didn’t know how to efficiently plan and execute a digital strategy so the answer was always outsourcing. And outsource we did, in many cases to the tune of thousands of dollars a month with mixed results. No wonder, when you consider the many components of an effective digital strategy:

Design, Content, Email, SEO, Blogs, Social Media (Instagram, Facebook, Snapchat, Twitter, Foursquare, Pinterest, Yelp, Google +) its all enough to make ya dizzy, right?

Over the years, we have worked with some fantastic people that were able to help us with our online presence. Most were a good value per industry standard. While there were certainly positive results from these campaigns, the struggle was always two-fold and exists to this day.

Can we afford to do this?

Can we afford not to do this?

#3 High Value Marketing (HVM):

84% of consumers reported always or sometimes taking action based on personal recommendations. -Neilson Report

Everyone knows that the best form of marketing is Word of Mouth. Personal referrals are the result of consistently connecting with your customer(s). It takes time and ONLY occurs once business owners remove themselves from a predominantly day-to-day role. Designing, constructing and implementing the vital core training, operational and cultural systems is essential, for word-of-mouth marketing to take root.


The Future of Small Business Marketing

To improve our future we must learn from our past.

No question, technology must be a component of the equation we run while plotting our future marketing course.

There has been much discussion at Koha headquarters about our mission: To create the ultimate sustainable small business revenue engine. The buzz that continues to circulate among the team is this:

While digital technology is part of the key to unlock the future of small business sustainability, the people within the system are our primary focus. If we, as a society, continue to see Technology as our sole solution, we can’t see People as our primary asset.

Whichever technology resource we incorporate into our marketing arsenal, if we fail to appreciate the importance of connecting with our customer, we’ll never attain true sustainability.

If you want to know where you stand with your customers without intruding on their time, try this. Ask your vendors, neighbors and team the Ultimate Question:

How likely would you be to recommend a friend or family member to our business? An anonymous survey will ensure the most accurate feedback.

What’s Next?

At Koha, we’re hard at work in our effort to create a small business system that drives more loyal customers and healthier revenue to local small business.

We’ll be doing a soft-launch sometime in 2017 (in suburban Chicago) in order to test all of our systems. We’ve got a lot of work ahead of us but if this post resonated with you, we think you’ll love the finished product.

Until then, I want to pose this question to all the small business owners out there:

What if there was a solution that solved the above marketing problems and moved the revenue dial in a substantial way?

If you really think about it….

Can you imagine what it might look like?

What impact would it make on the success of your business?

Remember this, unless you are committed to the success of your customers, suppliers and your community, then no digital solution is going to make a material difference — not even the best one… coming 2017.

When in doubt… add more value,

Shaun