Small and medium business enterprises better known as SMEs are the largest contributors to the economy of any country. In India, they constitute the most crucial sector of the economy for their huge employment potential.
We all know that the heart of any business is in the successful and effective promotion of its products and services to its customers, basically in its strategy of advertising and marketing. But how do these small companies that allocate not more than 2 to 5% as their marketing budget, keep at par with the brick and mortar companies that have dominated the traditional marketing arena with their giant marketing budgets? Where are the SMEs spending their advertising money for maximum growth and revenue?
Digital marketing
46% of the marketing budget of SMEs is allocated to digital marketing on an average.
There is a paradigm and rapid shift of the world from analogue to digital. With the evolving modern technologies, the SMEs are beefing up their marketing efforts, by tapping into the enormous potential of the online market which is now growing to be most lucrative because studies establish that 70%-80% of people research a company online before visiting any small businesses.
The top 5 channels used by owners in digital marketing are
1)Mobile or internet marketing- 78% of the small business owners feel that mobile/internet marketing is a very important marketing channel and 18% are already using it for their businesses while the remaining 60% believe that this channel will be important for their growth in future and are planning to increase their budget in the next 12 months.
2)Email marketing-26% of the SMEs are putting their money in email marketing through regular emailers
3)Social media-96% of the SMEs state that they explore social media in their marketing strategy. 43% of the small business owners say that building customer relationships which is facilitated by social media, is their top marketing strategy.
Facebook has 25 million small businesses with active company pages. By spending just one dollar on a Facebook ad, SMEs make their ad visible to around 4000 customers.
4)WoM- 27% of the small business owners agree that WoM (word of mouth) is the most effective way of marketing which is backed by relevant and credible content online.
5)SEO- Sufficient authority and visibility on search engines is important as 98% of the searchers do not look beyond the top 10 results before zeroing on which vendor. Google Ad Words, Google Analytics, PPC models are the tools.
However, some owners have also expressed their negativity towards digital marketing due to the dynamic incarnations of rules and interfaces. That explains why 30 % of the small business owners hire experts and agencies to manage their digital presence.
Traditional Marketing
Also known as the print and visual media, this includes advertising on televisions, radios, through hoardings and through offline directories like yellow pages and newsletters. Unlike digital media where owners assign specific amounts to specific targets for desired results, and level out the gaming field with the big boys to attract their fair share of clients, traditional marketing appears to have taken a back seat with marketing budgets of the SMEs. Blame it on the enormous costs, that include agency fees and the dominance of the larger organisations, only 8% of the small business owners spend their advertising money on this channel of marketing as studies reveal that this medium is only a 3% lead generator and ROI is low.
To summarize,
A good reputation, a solid SEO base, great online presence on the social media through quality content, website, authority on quality online directories, regular updates through e mailers and newsletters is where the SMEs believe their survival and thriving is.
Author- Alefiyah Kapasi
Statistical sources- http://searchengineland.com/smbs-spend-an-average-46-of-marketing-budget-on-digital-177502
https://www.bluecorona.com/blog/29-small-business-digital-marketing-statistics
Disclaimer-Images are taken from images.google.com and are for illustrative purposes only
