If you're a marketer or owner of small to medium business, it's likely you've had to manage a small marketing budget at some point in the business's lifetime. Perhaps you're navigating this right now. While you might not have the kind of budget like others in your category, there are ways to run effective marketing campaigns that are smart in their use of money and deliver ROI that grows your business.
SME marketing challenges to overcome
A big challenge for small and medium-sized businesses today is using the budget and resources of a small company to achieve the impact and presence of a large brand. Knowing where to place limited resources for maximum effectiveness is a common conundrum for SMEs.
SMEs often have to choose between search engine optimisation (SEO), search engine marketing (SEM), content marketing, blogger outreach, social advertising, and a whole host of other options and combinations. Knowing which channel(s) will be effective is the key to success but is often out of reach for most SMEs.
This is where market segmentation can become a key tactic in defining your targeting—and it's not an effective process to attempt on your own.
Market segmentation on a budget
Market segmentation is about understanding who your key customers are in your market—who are they and what are their needs, believes, attitudes and behaviours? While research agencies can do this work in-depth for larger companies, this is something SMEs can do too—just on a smaller scale.
Starting is easy: simply talk to your customers. Conduct some interviews or run a survey. The key aim of the exercise is to get a better idea of who your customers are and how they are using your product or service.
It is important to go into this research with an open mind. Sometimes who you think your customers are not that same as who they actually are. With these insights to guide you, you can more effectively tailor your marketing and message to speak to the type of people your key customers are. As time goes on and your business grows, you can seek out an agency to delve more deeply into your customer understanding—from who you most profitable segments are to untapped opportunities—but for now, this is a great starting point.
Read more: Building Your SaaS Brand—while this content is geared towards SaaS providers, it's information is highly relevant to start ups and SMEs.
SME marketing pitfalls to avoid
SMEs or new start-ups often make the mistake of trying to do it all themselves, which can land them in hot water when their efforts are not successful.
Companies make the mistake of paying for expensive marketing agencies that aren’t able to use cost-effective, low-budget marketing. It requires a highly efficient, specific frame of mind and previous experience to understand how to get the most out of a smaller amount of capital.
Similarly, if your marketing efforts are taking a mass market approach (i.e. target everyone), this may not be the more effective use of your budget. While mass market advertising has its place in the advertising and marketing world, it can burn through a small budget quickly. Instead, use your market segmentation and customer understanding to narrow your advertising to the most relevant audiences.
Read more: The difference between market segmentation, customer segmentation, target audience and personas