New research by leading Australian marketing services business, Salmat, reveals while half of (51 per cent) Australian small companies (1-24 employees) said they would increase their marketing spend 2017, most of them lack the time and resources to invest properly in marketing, limiting their ability to reach and convert customers against the better resourced mid-tier businesses (25-200 employees).
Among their pain points, only 23 per cent can afford to have a dedicated person for marketing, which hinders their ability to effectively plan. Almost two thirds of respondents (62 per cent) said they were planning their marketing strategy only three months in advance, and nine out of 10 (88 per cent) six months in advance.
Their ability to measure their marketing campaigns is also a challenge that many are facing. Only 52 per cent of small businesses say they measure their campaigns often, versus 75 per cent for mid-tier businesses. Their two main barriers for measurement is the lack of time (44 per cent) or lack of knowledge (18 per cent). When they do assess their campaigns, small businesses fail to use the insights as much as mid-tier companies to improve their campaigns (58 per cent vs 67 per cent).
Accessing proper training is also proving to be a major challenge for small businesses. More than one in five respondents said they will not be doing anything to improve their marketing skills this year (22 per cent). A third said (33 per cent) they don’t have enough time, with a fifth not knowing how (21 per cent), and another fifth not having budget (19 per cent).
As a result, mid-tier companies have a significant advantage over small businesses. In 2016, 60 per cent of mid-tier companies increased their marketing budget, twice as many as small businesses in the same period (32 per cent). And while 51 per cent of small companies are planning to increase their budget this year, it is generally because they need to increase sales (30 per cent) and grow the business (26 per cent), whereas mid-tier businesses are increasing budgets because revenue has increased (32 per cent).
Salmat Head of Marketing, Ben Hillman said: “Time and resources are the biggest challenges small companies face, meaning that marketing activities sometimes fall by the wayside. It’s impossible to do everything, so small businesses should focus their energies on planning and evaluating their current marketing activities so they know what is and working. They can also increase their skills and knowledge without paying a fortune by reading trade media, attending online webinars and subscribing to online self-training platform.”
Looking at the channels small businesses plan to invest in for the first time this year, letterbox drops comes out on top (13.9 per cent), followed by events/trade shows (12.7 per cent) and their websites (12.3 per cent).
“It is not surprising to see small businesses turning to letterbox as a new channel, as most small businesses rely on the local community for sales. Letterbox is an effective way of engaging a highly targeted local audience through the use of targeting tools that enable granular targeting based on more than 50 variables ,” said Hillman.
The survey also reveals a gap between investments in websites and Search Engine Marketing or Optimisation. While small companies spent most of their budget on their website in 2016 (57.5 per cent), only 7.1 per cent and 2.4per cent respectively invested in SEO and SEM.
“SEO and SEM is often viewed as complex by small businesses, which stops them from using these tools. However, small investments in search can translate into a competitive edge. You don’t need to be an expert, you just need to be better than your competition.
“To get the most out of their marketing, small businesses must understand their target audiences to craft relevant campaigns. When planning a campaign, be sure to consider what your competitors are doing, and what data you can access about your customers and potential customers. There are plenty of online tools such as Google Analytics and Swiftplan that are accessible to small businesses, allowing them to collect and use an increasing amount of data to improve their marketing efforts.” said Hillman.