You can't blame Small Business Owners being a bit paranoid about the upbeat statements delivered by government spokespeople, headline figures, improving unemployment numbers and constant bombardment of positive news such as 12% house price growth being just around the corner. There is a lot of conflicting data out there in circulation - such as small businesses experiencing a 7.6% drop in sales over the 2018-2019 financial year 1. These figures are more reflective of economic uncertainty and probably resonate a little more with the typical small business owner. The question is what to do to get through the uncertain economic period?
Don't fall victim to Inertia
"Corporate Inertia" is a well known business term. It refers to a situation where an established company becomes too rigid in its thinking and actions over time. This causes the company to be vulnerable to disruptive events such as economic downturns and industry-specific developments and change.
Inertia is built into larger businesses. It is common sense that it is difficult for a large firm to announce mass redundancies, completely change direction and rejig operations after they have been set in stone for the last couple of decades.
A complacent top-heavy firm with large scale operations and a small profit margin can become a dinosaur overnight. Failure to ignore market trends and adapt can lead to disastrous consequences - "The Kodak Moment" is a popular term for a reason.
For a small business, however, falling victim to inertia is inexcusable. Small business owners have both the technical and financial ability to change their direction on a whim. Herein lies the question... are small business owners affected by the complacency bug, just as much as the corporate world? The answer is a resounding "Yes" - it is common to see small business owners operating dead-end business models with high overheads and no growth potential. They continue to do so just because it is what they know and what they have always done.
For example, just because a particular retail store was successful 20 years ago it does not mean that the numbers will add up today. The entire B2C sector has drastically changed due to a multitude of factors:
- Australia experienced a fall in disposable income between 2009 and 2017. 2
- GDP per capita is shrinking. 3
- The proliferation of online shopping is not the panacea business owners thought it would be - all it has done is concentrate market power in the hands of the few that can compete on a high level in terms of brand exposure, quality of service and low price. The digital space is a brutal and fiercely competitive market place - it is actually far more difficult to crack than It appears at first glance.
The current economic period in Australia should be a wake up call for business owners to look around, diligently assess what they are doing and take the right steps. The final destination of a complacent business is insolvency and every business needs to constantly evolve to avoid this fate.
How does this relate to Marketing and Sales?
The time when you could stick some signage on a window and get all the work you could handle is long gone. The marketing and sales process is far more sophisticated nowadays.
An additional issue is that marketing and advertising budgets tend to be the first in line to get cut during an economic downturn. Businesses need to market more and sell harder, but are actually doing less during the current environment.
Cutting marketing spend during tough times isn't the wisest of decisions. Indeed there is a saying "When times are good, you should advertise. When times are bad, you must advertise."
The real effect of cutting your marketing and advertising budget during a difficult economic period is that it frees up space for competitors to enter, creates a Catch-22 situation with a cycle of falling revenue (that eventually leads to an even tighter budget and lower marketing spend) and causes your business to miss out on growth when economic activity restarts.
On the topic of sales, this is where some small business owners are at a complete loss. While big companies have trained sales teams that work full-time chasing up leads and converting them into paying customers, small business owners that traditionally relied on referrals and passive ways of acquiring customers lack the skills to drum up business once the conditions worsen.
The solution is to get out there: start networking and make drastic presentational improvements to your business. The scope for things to review is large: ranging from your corporate branding, sales aids such as booklets that stand out above your competitors, all the way to personal presentation and sales skills.
Avoid the Marketing and Sales Fads
Do not make the mistake of falling into marketing fads!
If your business has done little or no marketing over the course of its existence, and you are looking to start a comprehensive marketing campaign, you are a prime candidate to falling prey to poor advice.
Here is a quick list of marketing fads that will likely yield no benefit:
1. DIY / Cheap Websites and SEO. Web Development and SEO are much more complicated fields than they are made out to be and require a lot of technical expertise to execute properly. You will not be able to compete against competitors that engaged real professionals in this field. Stay away from DIY website platforms and avoid cheap and amateur website developers that produce websites based on templates - this path will doom your digital presence to mediocrity in the best case scenario. Websites got exponentially more complicated as technology became more sophisticated. The time to fiddle with web development on your own is in the past when things were much simpler, search engines did not have sophisticated algorithms and your competitors were still at the stage of installing their first office PC.
2. Social Media for B2B. If your business is in the B2B sector, it may be a wise move to forgo social media altogether. Social Media platforms are notoriously poor at converting traffic into paying customers - the science and psychology behind this is quite complex, but overall it is the result of the platforms being primarily designed and oriented for social interaction rather than business transactions. Save your time and don't waste money on these tools if your business sells B2B products and services. There are, however, some cases where a social media campaign may be applicable to a business in the B2C sector.
3. Videos. There is nothing essentially wrong with corporate videos per se, it's just that for a video be effective it needs to be delivered to the right audience through the right channels. A small business that invests into a typical company profile video often finds themselves in the same dilemma as a business that printed too many flyers. You need to have a sound strategy for delivery of your content. How will your video get to your potential customers? Will it become a sales aid and form a critical part of your sales strategy? Will you have the opportunity to show this video to potential clients on a tablet when you visit them? If you can't answer these questions with certainty, forgo investment into producing a custom video.
4. Book Writing. There are service providers out there that write books that you are supposed to gift to your potential clients with the intention of raising your credibility. These books tend to be of very specific size format and feature large font spacing. They are commonly handed out by business coaches, life coaches and leadership consultants. Please avoid this strategy if you are a professional service provider with legitimate services - invest your marketing budget into a professional presentation for your business instead.
5. SEM. Search Engine Marketing involves targeted paid campaigns through search engines and can be an effective strategy for some businesses, however the costs associated with this marketing strategy are quite high due to intense competition. If your business is in a saturated industry with low margins, it is wise to look to other methods as the cost of customer acquisition can often exceed the margin on the product or service. There are still opportunities in some sectors with higher margins or where the high price of client acquisition is justified by revenue from the client over a long term period.
An important point to remember.... "There ain't no such thing as a free lunch". If you come across a free marketing channel that requires no specialised technical expertise.... it's probably over-saturated with noise to the extent that your message will never get through. This principle is especially relevant to social media marketing. High quality marketing opportunities always carry a price tag.
Tried and Tested Methods
Make sure to use the methods below as a part of your marketing and sales strategy.
1. Business Networking. If you are in the B2B professional services sector, business networking is a must-do. In the time of what appears to be an age of digital interaction, people still do business with real people and the bulk of real contracts and agreements are made face-to-face. Business Networking is a long-term sales strategy - it's common for some businesses to choose to become your client after years of interaction. Pick your business networking events wisely - expensive networking events will generally attract a higher standard of attendees. Grade different networking organisations and see if their attendees fit the profile of your typical client.
2. EDM (Electronic Direct Mail). This marketing appliance is more commonly known as e-Newsletters. Email is the most corporate of all digital communications (compared to social media and similar platforms), which makes it the perfect tool to conduct business and close sales. You need to ensure your website is equipped with the capability to capture potential clients and their email addresses (i.e. a newsletter sign-up ability), and you need to find a way to subscribe your regular clients to your newsletters. The optimal time between sending out newsletter depends on the type of your business and industry - some businesses can get away with sending e-newsletters every day, while for others once a month is the most often that can be considered acceptable.
3. Traditional Marketing. Traditional marketing channels have the advantage of being direct, targeted and often having more presence in the marketplace than digital channels. It's easy to get lost in a sea of digital noise - after all, everyone and anyone can be online for free and that is the root of all problems with digital marketing. Traditional marketing channels require a monetary investment, which leads to a limited number of advertisers, which in turn results in a more effective and refined advertising medium. It's quite typical to find that print materials outperform a digital marketing campaign.
4. Websites and Organic SEO. You will need to invest in building a professional website specifically designed for lead capture. There are a lot of strategies that can be utilised to generate leads online - remember that there are thousands of potential customers looking for your service online at any given moment. You simply need a way to beat your competitors to getting to them. This is where you need a proper digital strategy and a real professional with experience in web development and organic SEO.