Five Reasons Why Small Businesses Need Marketing

 

Do you do any Marketing? Most small business owner’s response is “I have referrals thus marketing is not needed at all!” Well let’s look at this position a little closer.

First, some background about small businesses. There are about 24 million small businesses * (with less than 500 employees) in the United States and approximately 600,000 small businesses in the state of Massachusetts.  There are about 6,500,000 people and 2,700,000 homes in the state of Massachusetts.  So, as an example, if 1% of the small businesses in Massachusetts are electricians that would mean 6,000 electrical firms are vying for 2,700,000 home owners, or about 450 homes per company. On the plus side one needs to allow for repeat business and, but not all 2.7 million homes are looking for an electrician. The point this leads to is reason number one why marketing is needed.

1-      If small businesses rely on just referrals (word-of-mouth) the “well” will eventually go dry!  Unfortunately if small businesses do not realize ahead of time it will be too late. Referrals alone will not maintain a small business.

2-      The business model has changed. The consumer is looking for more than a company name. They want to know as much as possible about the potential company. Things like case studies or testimonials are now required.  Small businesses need to document these and find a way to communicate those via media like web sites and/or blogs.

3-      Consumers prefer to do their research on their own and then narrow the list of potential companies down to a few before they contact the companies. People are keying in the word “electrician” in their browser and looking at what comes up. If your company does not appear on the first page there is a good possibility you have already been eliminated. Thus a web site is becoming critical as another tool of marketing (maybe the most important tool) if small companies want to increase and maintain their business.

4-      Consumers “talk” to other consumers or read about other consumers via Facebook or Tweet about their experiences with companies thus small business need, at a minimum, to monitor what people are saying about them in social media (Facebook, Twitter, Yelp, Alison’s List, etc.).

5-      Small businesses need to differentiate themselves from competitors in order to gain mind share among the consumers. One way is to create value and/or creditability is by periodically sending mailings or emails to targeted audiences to “nurture” them and have your name/brand top of mind.

There are other reasons why small businesses need to do Marketing, but the key point is that the world of selling has changed and to get customers one must make them know you are out there. Today there is a mix of both old and new marketing tools that can do this in the most effective and optimal way.

So what are your marketing plans for 2011? Is it to let your competitors grow at your expense or will you grow revenues because you have a marketing plan?

RHL 10/19/10

*Small Business Notes – Federal data information

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