Microbusinesses are really small businesses that employ nine or fewer people, including the owner. The owner does everything.
There are 3.8 million employer microbusinesses in the United States comprising 74.8% of private sector employers and employing 10.3% of private sector jobs. Microbusinesses are key components of local economies and provide employment opportunities.
A research study was conducted that explored the theme of microbusiness marketing with no time, no money and no expertise. The microbusiness operators perceived marketing to be important to success but struggled with limited time, money and expertise.
The research confirmed that microbusinesses struggle with marketing and identified seven key themes that microbusinesses can explore to improve marketing results.
Successful Marketing for Microbusinesses
The first theme was that microbusinesses often defined marketing as advertising and promotion that was paid for out-of-pocket. This means that marketing was not being used as a strategic tool for business success. It was a common theme that the terms “marketing” and “promotion” were used interchangeably. Marketing with a focus on the customer should be an operating principle throughout the entire business operation. There is an opportunity for microbusinesses to be more successful in marketing by integrating marketing throughout the business.
Microbusiness owners tended to focus on daily operations. They are close to the customer and can act on opportunities quickly. The alignment of marketing with daily operations can create opportunities to use time, money and expertise resources efficiently for the microbusiness owner.
A key improvement that was identified was to expand the promotion mix from a focus on short-term direct customer promotions, mass advertising, and digital to include personal selling and public relations. The respondents tended to focus on short-term, price-oriented promotions, advertising and digital tools. There is opportunity to improve marketing results by expanding the use of cost-effective promotion tools.
Lack of time was identified in this study as the most significant barrier of the three barriers of lack of time, lack of money and lack of marketing expertise. Participants in this research study considered the challenges of running a microbusiness to be significant and marketing took a back seat to daily business operations. Microbusiness operators expressed frustration with the lack of time they spent on marketing.
Focusing on daily operations with an emphasis on customer service as a marketing strategy is effective and time efficient. The daily operational activities of a business that include personal selling, handling customer inquiries and customer service create an opportunity to integrate promotion activities into the daily activities. A more focused effort on integrating marketing in daily operations has the potential to increase efficiently the time spent on marketing to improve marketing results.
Word-of-mouth, building relationships and networking are time efficient. A marketing strategy that focuses on word-of-mouth, relationship building and networking has the potential to be successful and provide a positive return on the time investment.
Spending Money Wisely on Marketing
Microbusinesses often have limited money for marketing. When asked about their marketing budgeting method, 56% of microbusiness operators set marketing budgets using the affordability method, which focused on intuition and judgment. And, 11% did not have a budgeting method but rather used cost minimization. Improving the ability of the microbusiness operators to implement a data-driven marketing budgeting process is an opportunity to improve marketing operations.
Low cost marketing is one strategy to address the issue of limited financial resources. Microbusiness owners interact with the customers directly which can create a competitive advantage of customer knowledge, quick reaction to customer needs and speed of responsiveness. In addition to being low cost, the themes support a customer-orientation strategy in daily operations further increasing the efficiency of the marketing spend.
Measuring Return-On-Investment (ROI)
The respondents had issues with measuring the return-on-investment of the marketing spend. Microbusiness operators were neutral when asked to evaluate the effectiveness of their measurement of return-on-investment of the marketing spend. In addition, 67% of the respondents identified lack of return-on-investment as a barrier to their marketing effectiveness. A theme arose that microbusiness operators would spend more resources on marketing if they were confident of a positive return on investment for both the money and time invested.
There is an opportunity to improve marketing operations through measuring return on investment of the marketing spend.
Improve Marketing Expertise
Improving the marketing expertise of microbusiness operators is a strategy that has potential to improve marketing performance. Limited marketing expertise exacerbates the issue of limited time and money resources for microbusinesses. Microbusiness owners with limited marketing expertise might make suboptimal marketing decisions leading to poor return on investment on the time and money that is invested in marketing.
There is opportunity for community and economic development organizations to facilitate the improvement of microbusiness marketing expertise.
Microbusiness operators in this study were interested in improving their marketing expertise. When asked to rate their level of interest in improving their marketing expertise, the response was positive. This creates the opportunity for small-business support organizations to offer educational opportunities such as seminars, classes and individual business support.
Improve Digital Marketing Expertise
The digital marketing environment is dynamic. The researcher observed that the respondents were interested in improving their digital marketing expertise but were concerned about the time and money needed to implement digital strategies.
Digital marketing can be an effective promotion tool for microbusinesses due to the focus on the customer, relevance, social media and analytics. Microbusinesses can pursue marketing strategies of networking, relationships, word of mouth and promotion using content marketing, social media, search engine marketing, digital advertising, websites, forums, blogs and email. Microbusiness operators should seek out opportunities to improve digital marketing expertise.
Traditional Marketing Strategies Are Effective
One of the central themes of this research study was to explore traditional small-business marketing strategies. Relationship building, word-of-mouth, networking and branding strategies were used extensively by the respondents. The respondents interconnected the practices and used them interchangeably.
The theme emerged that traditional marketing strategies were effective for microbusinesses.
These strategies can create opportunities marketing activities to increase return on investment on money and time spent on marketing. In addition, traditional marketing strategies can be integrated into daily operations, which can create time and money efficiencies.