2024 hasn’t been easy so far, for SMEs. The cost-of-living crisis is continuing to bite into budgets, making managing customer acquisition tough. Consumers still have limited funds, making them more careful about where they spend their cash, and businesses are in a similar situation, driving the need to both minimise marketing expense and maximise marketing return. For many, this will mean moving away from established marketing channels and towards alternative approaches.
What are the marketing challenges faced by SMEs this year?
The ‘perfect storm’ has become a cliché, but it’s the term most appropriate for the current scenario faced by SMEs. Confronting increased overheads during reduced consumer spending, they have limited budgets to invest in marketing. And yet, lead generation is becoming increasingly difficult. Despite greater access to customer communication and market analysis, the established marketing channels – social media, banner advertising, pay per click, and affiliate marketing – aren’t providing the leads they once did, thanks in part to increasing customer awareness of marketing tactics and algorithmic targeting.
Consumer behaviour is also changing. Living in a world saturated with marketing materials, consumers are not only developing ‘ad blindness’ but are also becoming more cynical about what brands promise and choosier about who they share their contact details with. It now takes a lot more effort to engage a consumer’s attention, let alone keep it. This means that SMEs need to work harder simply for their marketing efforts to generate interest and achieve visibility in a landscape of increased competition. Differentiation remains key, but grasping the points of differentiation that will drive custom can be difficult in a progressively competitive global business space. All of this means that SMEs need to change their approach to marketing.
How can SMEs approach the marketing challenges of 2024?
With budgets unavoidably squeezed, there will be very few SMEs able to increase their marketing spending this year. But if their established advertising norms are failing to deliver the results they need, alternative lead generation strategies will have to be considered and there are a few options that are still working well.
Offers – Special offers remain a favourite among consumers, but they have to be targeted properly. Whether it’s discounts, promotions, freebies, ebooks, webinar access, free tools, or loyalty programmes, special offers can be used to deliver extra value to consumers. The priority should be in finding an offer that can deliver tangible value to the targeted consumer without taking too much from the business’ budget.
Personalisation – Personalisation can be a difficult thing to balance. While it holds the potential to increase the value of a business’ marketing efforts by as much as 40%, when used inappropriately, it can easily alienate your target customers. But when used to deliver personalised content to an established customer base, it can be an effective tool.
Referrals – Consumer trust is low right now. In fact, only 30% of consumers trust the companies they do business with. On the other hand, 84% of consumers say that they trust recommendations from friends and family above all other sources of advertising, and when you have 76% of customers willing to refer a friend if they have had a good experience with a business, it opens up a lot of opportunity for SMEs. Small businesses have traditionally shied away from referral programmes, wary of the expense and complicated setup. However, with easy-to-use and affordable referral software platforms available, the process is a lot simpler and cheaper than many business owners imagine. Referred customers also have a 37% higher retention rate and a 16% higher lifetime value than customers sourced from alternative avenues, making the effort and investment more worthwhile.
Content marketing – Content marketing remains a vital tool for SMEs, and is still a great source of organic traffic. It can help with lead generation and build brand reputation and awareness. But businesses need to invest in research and targeting, as well as meeting the new criteria released by Google (and other search platforms) in order to gain the most potential benefit.
Brand ambassadors—There has been a move away from using brand ambassadors in the last year or so, primarily due to the furore around influencer scandals and fake reviews. But when you use your genuine customers to become brand ambassadors—as many high-profile businesses are now doing—you gain the benefit of honesty, trust, and accurate targeting. A customer referral programme built around your existing happy clientele will mean these genuine brand ambassadors are incentivised to tell demographically similar people about your products and services, generating highly targeted leads.
It’s not an easy landscape for SMEs right now, there are so many pressures and challenges to contend with. But with the right marketing techniques, some of those challenges can be overcome, enabling brands to improve performance, reach more customers, and better manage their resources. Making finding a new lead generation strategy all the more pressing.
Kirsty Sharman is a referral marketing expert and founder of Referral Factory, which provides easy-to-use, plug-and-play referral software to help businesses of all kinds build, launch, and manage referral programs.
