It's crunch time for small businesses
With a turbulent economic climate in which even
banks are too afraid to lend to each other, small businesses are finding it
harder to secure credit. The first instinct of businesses is to cut spend
wherever possible, but this strategy only has an artificial effect on the bottom
line.
By Richard Sheppard, general manager
EMEA, Coremetrics
Marketing is often one of the first victims of
recession. However, cutting marketing and advertising activity might
reduce outgoings initially, but will inhibit the long-term health of your
business, leaving the competition room to infringe upon your messaging
space.
Findings from PIMS, one of the largest management databases
in the world which gathers information from 4,000 companies, shows that cutting
marketing during a recession leads to reduced profitability in recovery, while
increasing it leads to a 300 per cent faster market share gain during better
times.
As more businesses compete for fewer consumer pounds, it is
crucial to really understand your customers. Small businesses that aren't
aware of their customer motivations, needs and wants during one of the most
difficult economic periods of recent times will be left by the
wayside.
Consumers' buying habits are changing. With limited
budgets and greater expectations, consumers are trading down, looking for value
and switching providers where possible. Customer acquisition and retention
is more crucial than ever.
Knowing your
customer
Marketing your product or service online creates
opportunities that are unavailable in traditional offline media.
Advertising in print and on television is expensive, and although it can reach
mass audiences, this blanked approach means that your message isn't always
targeted towards the right people.
Online has firmly secured its
position as the marketing method of choice for small businesses. It is
cost effective, and also enables you to hand pick your audience, and target them
quickly and efficiently.
This ability to unlock the potential of
your existing customers and prospects can only be fully realised with a tool
like web analytics. Web analytics allows you to measure your digital
marketing campaigns, so that you know where your customers come from and how
they behave.
It takes the guesswork out of marketing, and allows you to
invest in the right online marketing and advertising channels to reach your
customers. Online activity leaves a digital trail that gives small
businesses the opportunity to accurately measure the behaviour of their
customers.
This crucial insight provides information detailing how the
customer was drawn to your site, which pages they viewed, how long they spent
there, the search terms they used and whether and how often they
return.
For example, if you were advertising online on a
number of sites, running an affiliate program and Pay Per Click search programme
- web analytics allows you to measure which channels are most profitable and
which you can cut back and save money on.
Using this knowledge, you
can improve your marketing and advertising campaign by correlating it with real
consumer behaviour. Web analytics also allows small businesses to identify
exactly how consumer behaviour is changing in reaction to the credit
crunch.
Using web analytics in this way will enable you to effectively
communicate with prospects throughout the purchase cycle, capitalise on cross
and up-selling opportunities and create a relationship with your customers in
response to changing needs.
As the credit crunch changes the way
consumers spend, changing buying habits can be tracked and analytics can also
help small businesses evaluate which advertising messages appeal to most money
conscious customers.
How to get the edge
A number of small businesses use
free web analytics packages to receive weekly updates on the number of visitors
their site receives and pages viewed. However, counting the number of
people that visit your website is not enough, and most free web analytics tools
are severely limited in the data they can offer.
These packages do not
allow you to deliver targeted experiences or identify sales opportunities based
on customer behaviour. Nor can you integrate them with your website to
automate responses such as cross and up-selling
opportunities.
A more sophisticated analytics service
allows you to capture every click of every visitor over
time and create custom reports on the fly, negating the need to consult an IT
department.
This means that you are saving costs internally, and reacting
quickly to external customer demands. In the online arena, where
communication occurs in real time, speed and timing is crucial to digital
marketing success.
The very purpose of marketing is to identify,
anticipate and satisfy customer requirements profitably. A small business
can optimise the media mix by understanding end-users' research process, from
where they searched, to the search terms they used, to the online advertising
messages they have been exposed to along the way.
Savvy
Spending
Knowing your customer through web analytics provides
marketers with a less risky approach to marketing and advertising, ensuring that
performance and response can be closely monitored. What's more, customer
experience is improved by ensuring that their needs are being met, without you
wasting your advertising budget on a scattergun
approach.
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