Phil Friedman

5 years ago · 6 min. reading time · visibility 0 ·

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Small Businesses Need Marketing Strategies That Match Their Business Models



WHY FAD MARKETING ADVICE SMALL-BUSINESS OPERATORS USUALLY RECEIVE HAS LITTLE TO DO WITH THEIR REAL NEEDS


Preface: I do not pretend to be a marketing guru. I have, however, been a small-businessman for several decades, and have developed and run marketing campaigns for numerous small (and not so small) businesses through the years. Consequently, the following observations and suggestions are grounded in real world experience. They are, of course, presented for no more nor less than what they may be worth.


Have you noticed that virtually all of the marketing advice you read on social media sites fails to differentiate between the objectives and needs of small business versus those of big business? Yet, the differences between the marketing needs of small business and big business are radically different.

It’s about more than just the size of your… marketing budget

The differences between the marketing needs of small businesses and those of big businesses do not derive, as some might think, from the relative size of their respective marketing budgets. It is a function of fundamental differences in a) organizational structure, b) business goals and c) market segment.

Consider that, independent of annual gross revenues, small businesses generally exhibit a relatively flat organizational structure. Small business executives and managers are usually called upon to perform cross-functional duties. Rarely does a small business have a truly dedicated marketing executive, never mind a stand-alone marketing department. In the vast majority of small businesses, marketing functions are performed by executives, managers, and line employees who have concurrent responsibilities in areas outside of marketing.

Moreover, the goal of the majority of small businesses is operational profit. That is in significant contrast to the situation in big business, where market dominance (and exit strategy), or sales growth (and exit strategy), or increased stock share value (and exit strategy) are frequently the primary drivers in marketing campaigns.

Last but not least, small businesses do not generally serve broad markets, delineated either horizontally or vertically. But rather, by their very nature, small businesses frequently serve niche markets.

By definition ― at least, by my definition ― small businesses deal in niche markets...

There are, of course, different definitions of what constitutes a “niche market”. Some definitions are formulated in terms of concentration on a single product or service, or on a very small range of products and services within a broader market context. Others approaches define a niche market in terms of being a very small segment of a larger market, delineated geographically.

That said, I submit that the nature of niche markets is best defined by a combination of factors, in various permutations of these factors. For example, the market for large luxury yachts is a global market (wide geographical coverage), but still a niche market because the number of potential buyers is infinitesimally small compared to the number of potential buyers of luxury items in general ― notwithstanding that the gross revenue numbers involved can be as high or higher than many businesses with a broader market base.

You can also delineate a niche market in terms of restricted geographical reach, again even though gross sales revenue a firm generates in that niche market seriously exceed that which might be generated by many firms with much broader geographical market bases.

For example, a firm that markets skyscraper window cleaning services may not, as a practical matter, operate in a very large geographical area, and so would serve a niche market ― yet its annual gross sales revenues could be quite high, if that geographically constricted area included New York city.

Marketing tactics in niche markets are, of needs, different from marketing tactics in broader markets…

Some key points to keep in minds are:

― Niche markets are smaller, and therefore, marketing to them has to be a lot more targeted. You can’t just play the numbers in a niche market; you have to know clearly to whom you are speaking. And you have to tailor and deliver the message very directly to those potential customers.

― Niche markets are frequently, if not always comprised of enthusiasts or, at least, consumers with very specific interests and a higher than average level of relevant product knowledge. So you have to be careful to deliver a credible message, and to maintain a profile of competence and trustworthiness.

― What works in one niche market may not work in another. Each niche market exhibits its own idiosyncrasies, depending on its unique demographic makeup and the nature of the product or services sector involved.

From these points, other critical conclusions emerge:

― A one-size-fits-all approach doesn’t work.

― Marketing material has to be developed, and any campaign has to be managed by people with intimate knowledge of your product or service, and moreover, of the sector into which you are marketing.

The hard fact is that you cannot market, say, boats in the same way you might market toothpaste...

For example, pretty much everyone accepts the need for toothpaste, and selection comes down to which product to buy. But not everyone thinks he or she needs, or is even has the slightest interest in a boat. So marketing boats begins with convincing the recreational products consumer to spend his or her dollars on boats, as opposed to, say, motorcycles or bicycles or surf boards. And if your product can be afforded by millions of people, a successful approach to marketing will differ significantly from what it would be if your total market comprised only a couple hundred thousand potential customers.


Yet, as a small businessman you'll be presented with broad blanket statements such as, "You should be marketing to millennials, as they are today's dominant market."   Never mind that millennials aren't, for the most part, buying or even interested in buying yachts that cost hundreds of thousands, and even millions of dollars. So if you build or sell yachts, this is exactly the wrong marketing advice.

Or you will be told that, "Content marketing is your perfect solution."  Never mind that the consumers in your niche market have no affinity for the generic content you will next be offered by that same marketing guru. And so, if you follow that advice, you will expend time, dollars, and energy on trying to pump content marketing to people who couldn't care less about the vehicle you're using to try to build your market profile and brand.

Only the best marketing people will advise small businesses to adjust their marketing specifically to their respective niche markets...

The reason for this is actually pretty simple. In order to tailor a marketing campaign or program to a particular niche market, you have first to know, or at least learn about that niche ― its demographics, its history, its culture and idiosyncratic social conventions, and so on. You have also to familiarize yourself intimately with the product or service being sold into that niche. For most of the time, in a niche market, if you don't demonstrate you know what you're talking about, that you understand and are willing to connect with your target customers, and that you are worthy of their confidence and loyalty... your marketing efforts will fall upon deaf ears and glazed over eyes.

All of this takes a lot of effort and time, and may not appear profitable for a marketer, in the context of providing services to many small business. Moreover, it often appears that a better ROI (for the marketer) can be attained by using established, more generic approaches ― which are actually more suited to broader, more general markets.

The irony of small-business marketing is that effective solutions can be more difficult to attain than in the case of big business. Which is why the marketing advice often received by small-business operators is devoid of real connection to their needs. ―  Phil Friedman


Author's Notes: If you found this article of value, you may want to take a look at some of my other writing about small business operations, management, and marketing:


"Small Businessman's Primer to Inbound Marketing"

"Selling Bull Chips in a Bag"

"Maximizing Throughput on Fixed Assets and Overheads"

"Small Businesses Need to Keep a Close Eye on Gross Profit"


And if you would like to discuss marketing or other issues you face in your small business, email or message me to arrange for a free, no-obligation 1/2-hour initial consult.


To receive notifications of my writings on a regular basis, click the [FOLLOW] button on my beBee profile. As a writer-friend of mine says, you can always change your mind later.

Feel free to "like" and "share" this post and my other LinkedIn articles — whether on LinkedIn, Twitter, Facebook, or Google+. I ask only that you credit me properly as the author, and include a live link to the original work.

If you are interested in yachts, are allied with the yacht building industry, or operating a small business in another sector, you should consider joining my beBee Hive,

THE PORT ROYAL GROUP for Yacht Builders, Buyers and Owners

where you will find experienced industry professionals discussing a wide range of topics. The ongoing conversation is always interesting, informative, and 100% industry insider.


About me, Phil Friedman: With 30 some years background in the marine industry, I've worn numerous hats — as a yacht designer, boat builder, marine operations and business manager, marine industry consultant, marine marketing and communications specialist, yachting magazine writer and editor, yacht surveyor, and marine industry educator. I am also trained and experienced in interest-based negotiation and mediation. In a previous life, I taught logic and philosophy at university.


The (optional to read) pitch: At www.learn2engage.org, we help you improve your reasoning skills and thinking abilities, and as a matter of course, thereby help you improve the quality of your writing. Instruction is handled directly by yours truly, both over the internet and in person, both one-on-one and in small supportive groups. For more information and to arrange for a free 1/2-hour consult, call or email info@learn2engage.org.


Text Copyright © 2016 by Phil Friedman — All Rights Reserved
Images: Stuart Miles, FreeDigitalPhotos.com, GoogleImages.com, and Port Royal Group





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Comments

Phil Friedman

5 years ago #4

#1
Thanks, Dean Owen, for reading and commenting, As to identifying a niche in the TAM, I'd suggest using some of the factors mentioned as initial filters. For example, can you reach a global market (in the beginning)? If no, then determine what your geographical reach might reasonably be. Is your product or service sufficiently complex to present obstacles to marketing in foreign languages? Or is it inconsistent with some foreign cultural values? If yes, these answers would further limit you perceived niche -- at least, initially. And so on. Good luck and cheers!

Phil Friedman

5 years ago #3

#2
@Gert Scholtz - To my mind the selection of channels is very dependent on the nature of the business sector. For example, if you manufactured a specialty item for sports cars, you might make use of a marketing initiative that targeted auto clubs with information, free talks at meetings, presence at club events, etc. But if you're selling small business accounting services, you would choose a different approach.. Thanks for reading and commenting, and for the kind words. Cheers!

Gert Scholtz

5 years ago #2

Phil Friedman Interesting and pragmatic post. What marketing channels would you recommend for small business? Or is that in itself very dependent on the nature of the business?

Dean Owen

5 years ago #1

This is really useful Phil Friedman, especially for a novice to the new world of marketing (me). I am finding identifying a niche within the TAM to focus advertising dollars on to be a bit of a challenge.

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