As time goes on, many small businesses are investing more and more money in their marketing initiatives. According to research by business advisory service CEB, 41 percent of surveyed small business owners planned to increase their marketing budgets in 2016. But regardless of the size of your marketing budget, it's important to think about which customer outreach tactics are working best before allocating your funds. To help ensure that you are investing your money in the right places, ask yourself the following questions when you're developing your budget.
1. Which marketing channels do most small businesses prioritize?
Over the years, an increasing number of consumers have been relying on digital channels to interact with brands and get their desired information. CEB's research found that four out of the top five channels that marketers prioritized in 2015 were digital: SEO, email marketing, corporate website/blog and paid search. The only non-digital channel in the top five was telemarketing. Understanding the channels that other small businesses are prioritizing can help you ensure that you are developing your budget in such a way that you can remain competitive in your space.
2. Which marketing channels tend to be the most effective?
This question is a bit complex, as the answer depends on your particular marketing goals, which could range from raising awareness to converting a prospect into a customer. Surprisingly, depending on your customer, the most effective marketing channels may not be the most popular ones among marketers. The CEB survey explored how likely small business owners were to recall and follow up on marketing information sent by suppliers through a variety of channels and found that non-digital channels can be very effective. While email marketing proved to be the most effective marketing channel, other effective outlets in the top five included word-of-mouth, direct mail and print newspapers. Once you determine which channels will likely be the most effective when it comes to reaching your specific marketing goals, you can allocate your budget accordingly.
3. Which marketing channels tend to be the least effective?
The least effective channels in the CEB report — those with the lowest recall and follow-up rates among small business owners — include a mix of digital and non-digital outlets: billboards/outdoor advertising, mobile app ads, telemarketing, branded white papers and third-party blogs. It's important to note that several of these channels are clearly disruptive to the customer as they interrupt what he or she is trying to do at a given time. On the other hand, the more effective channels give the customer more control. For example, customers can choose if and when they want to open up an email marketing message. As you develop your budget, you should keep this trend in mind, as you don't want your marketing messages to become a nuisance or disturbance to your potential customers.
Obviously, there are a lot of different factors that should go into determining the size and allocation of your marketing budget. By following the trends and insights discussed above, you can be one step closer to determining how to distribute your funds so that you can engage and convert your target customers in the most effective way.
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