What type of marketing does your small business need?
Maybe the most common question when starting or growing a small business is this: what type of marketing do I need?
Right off the bat, the average person - or a marketer trying to sell you something - will start spouting things like “social media,” “search ads,” “SEO,” etc.
This type of thinking is backward, and often causes companies to waste time on activities that make almost no difference. These are tools in the toolbox, but you first need to identify what job you’re trying to do before you start picking your tools.
A better answer stems from defining a few basic characteristics about your business:
Demand: Are people already looking for the product or service you’re selling, or is it something new they need to be made aware of? This informs whether you need to capture existing demand, or create new demand.
Trust: What’s the level of risk someone is taking to buy what you’re selling, in terms of time, money, safety, reputation, or emotion? This informs how much you need to invest in gaining someone’s trust to make a sale.
Relationship: Is this something someone buys once, occasionally, or repeatedly? This informs how much you focus on gaining new customers vs. keeping existing ones.
Competition: How many other options do people have and how aggressive are competitors? This informs the scope and differentiation needed in your marketing.
Source: Where could you reliably find good customers? This informs where to focus your efforts - and whether the traditional list of marketing tactics even makes sense for your business, or if there are better sources of customers for growth.
If you can clearly answer these questions first, then you can figure out which efforts and investments to make, based on their ability to accomplish what your business actually needs.
You might not know the answers at first, but that’s OK - it highlights areas where you need to do more thinking and research, which will inherently improve your business strategy.
An experienced marketer can also help steer you in the right direction toward the things that will actually work for your business. They can identify proven and creative ways to address all these factors, from helping form the look and voice of your company, to setting up the right technology and systems, and to executing it all effectively.
AI can be useful as well, but keep in mind that it’s garbage in, garbage out. If it’s trained on thousands of blog posts from SEO agencies (there could easily be millions of them), it’s going to have a natural bias to favor SEO as a tactic. There’s a lot of bad, misleading, or severely outdated advice on the internet, so just keep that in mind when reviewing the output of an LLM.
To help explain how to think about answering these questions and what they mean, here’s an example applied to a real business.
An example of how this works in practice
Let’s say you’re a mobile IV therapy service. Some people are aware this is a thing and will be searching for it. Other people aren’t aware or wouldn’t think of it, and therefore need to be made aware of what it is and that it’s available in their area. You’ll want to capture existing demand, but if you want to grow further there’s an opportunity to generate new demand.
Some potential customers will have objections. Is it worth the time and money? How do I know it’s safe? Who am I letting into my house? You have to present clear evidence in your communications to earn this trust, e.g. details on who you are and your credentials, customer testimonials, explanations of the science and the process, etc.
Someone might decide to get this service once - say, the day after their wedding - but others could be interested in getting it regularly, especially if they have a great experience the first time. That means it’s worth more to acquire a new customer if you can form an ongoing relationship with them, focusing on providing great service, and following up with them consistently in the future.
Competition could be other mobile services, physical IV therapy facilities, or even doctor’s offices. If there aren’t a lot of other options, just making people aware and making it easy for them to find you may be enough to get customers. If there are a lot of other competitors, you’ll have to find ways to differentiate yourself. In some cases, competition can be so intense that you have to totally rule out certain marketing tactics, like Google search ads with extremely high costs-per-click due to auction pressure, i.e. lots of businesses bidding on the same searches increases the costs.
Meanwhile, there may be a myriad of ways to find customers for your particular business that aren’t the standard approaches marketers try to sell you. You could partner with hotels or wedding planners, pitch to companies as a perk on corporate retreats, offer mutual referrals with other medical or aesthetic practices, etc. Customers could come from a lot of different sources, and it’s important to map out the pros and cons of as many as possible before you decide where to invest. (And note that these could all be channels for customers that competitors don’t utilize.)
How to apply this to your business
We’re not the first to propose a method like this for planning how to promote a business. I’ve read plenty of them in books, blogs, magazine articles, whitepapers, academic journals, etc. The problems I’ve found are:
Almost all of them are either intended for large corporations or only specific types of businesses, e.g. consumer tech startups.
Often, the authors don’t explicitly mention that this is either their bias or focus - they may even be unaware if they only work with certain types of businesses - which causes confusion for business owners who try to apply those lessons to their own company, even though their own situation may be completely different.
Even ones that could be applied to any business often require extensive research or analysis - something that someone starting a new small business usually doesn’t have the skills, tools, or even the base data to perform.
This framework’s intended to be something that any small business owners could answer pretty thoroughly in an hour. You should always be modifying it, of course, but this is an easy baseline to set immediately that will save you a lot of time, money and frustration down the road.
Of course, you might not have all the right answers right off the bat, and that’s OK. What’s important is documenting what you can, then continue to think about them and refine them as you learn more, or as the situation changes.
So, here’s how to approach each question, and then what to do about it.
Demand
Are people already looking for the product or service you’re selling, or do you need to create demand? Answering this helps identify where to focus your marketing efforts, or, more importantly, where to not spend your limited time and money.
Demand exists on a spectrum, with demand capture on one end, demand creation on the other.
Consider a gas station. It sits on the roadside, waiting for people who need fuel. It’s pure demand capture; a big sign is all the marketing needed.
Locksmiths and windshield repair companies are similar. Unless you're stealing keys or throwing rocks through windows, you're almost entirely trying to capture demand, not create it.
On the other side of the spectrum, you’ve got new and unusual business types, from board game cafes and zero-proof bars, to rage rooms and sensory deprivation float tanks. When these first came around - by definition - no one was searching for them. Awareness had to be created, and there are still plenty of people who would be interested if they knew about them.
Many businesses land somewhere in the middle, which might require a mix of both efforts, and it can vary by product or service. An HVAC company needs to capture demand for emergencies, but create demand for preventative maintenance.
Thinking about where you fall doesn't tell you exactly what to do, but it can help you confidently deprioritize other things.
If few people are searching for your service, SEO’s not going to make much of a difference. If people only buy when they have a sudden need, social media’s going to have limited impact.
It might sound obvious, but I’ve seen roofers who think they need to post daily on Instagram, and professional organizers writing blog posts purely to boost search rankings.
It’s not that these things are totally worthless - it’s that your business demands you focus elsewhere.
Trust
One of the most fundamental and least discussed factors in marketing is trust.
Trust is a simple concept. Do customers believe you’ll do what you say you’ll do? What’s the risk if you don’t deliver?
It’s critical to either answer these questions, or reduce the need to question.
For simple, low-dollar items, this is a low bar to clear. If someone’s buying coffee, worst case it’s terrible and they’re out a few bucks.
As products and services get more complex and expensive, earning trust should be more of a priority.
This is often a blind spot for business owners. They’re too close to their businesses to imagine being untrusted.
But when you’re able to take the customer’s perspective, it can open your eyes to new possibilities.
First imagine the risks people might perceive if they knew nothing about you. It’ll vary by business, for instance:
Plastic surgery: How do I know it’ll be done right? Will it be awkward?
Fitness class: Will I be embarrassed? Will I like the people there?
Wedding DJ: How do I know I’ll like the music? Will they talk too much?
Cleaner: Will they steal or break things?
Once you have those concerns in mind, consider all options to make it easy for people to move forward.
Some might be typical marketing considerations:
Professional-looking branding.
Case studies and testimonials.
Detailed instructions and documentation.
Videos, photos, FAQs, etc.
But don’t stop there. Find other ways to lower the perceived risk, such as offering:
Free consultations or meet-and-greets.
Free trials or estimates.
Generous return, warranty or cancellation policies.
Responsive (human) customer service.
Too often, these types of things are considered costs, or at least big time sucks.
But they may actually be much cheaper and faster than throwing more money at advertising. Trust me 😁.
Relationship
Do people typically buy from you once in their lifetime? Can they buy often? Somewhere in between?
Like with demand and trust, customer relationships exist on a spectrum.
Wedding venues, estate attorneys, moving companies, etc., rarely sell to the same person twice. Gyms, salons, landscapers, etc., rely on recurring sales.
Identifying where you are - or where you want to be - helps clarify many strategic questions.
For one: what should you spend on marketing?
If you’re offering a recurring service, the relationship can last much longer than the first transaction. A gym member at $60 a month for three years is worth more than $2,000. Even if you spend $120 to get a new member, their lifetime value greatly outweighs the upfront cost.
It also helps answer how much to focus on acquisition vs. retention.
Many businesses that could get repeat customers spend on advertising to acquire new customers, but don’t invest in basics like email marketing to keep people coming back.
On the flip side, lots of one-time businesses waste time on retention tactics, often just copying another business they like, not realizing they have a completely different relationship model.
Furthermore, viewing this relationship as a marketing dimension helps you think about important activities that aren’t typically defined as marketing.
For instance, the HVAC company whose technicians show up on time, looking professional, wearing shoe covers, being patient, not being pitchy, thoroughly cleaning afterward, then performing a courtesy follow-up. We call this customer service, but if it leads to a referral or review that gets another customer, it should be part of the marketing plan.
Even further, it can get you thinking creatively about ways to form a tighter bond with customers. Adding new products or services - custom merch, loyalty programs, etc. - can be a key to unlocking more lucrative relationships.
Competition
Competition is the marketing dimension that sounds the most self-explanatory. Everyone understands the concept of other businesses affecting your marketing.
However, the way most businesses respond to competitors is by copying them, which is partly OK, and partly problematic.
The more competition, the more you have to match the alternatives, and the more you need to stand out.
Some small businesses hyper-fixate on their competition, but are afraid to be different. That just makes it difficult for a customer to choose on anything other than price.
Some try to be different, but don’t meet the same standards as similar companies. Better branding usually doesn’t override an inferior customer experience.
Competition also functions like a volume knob. The more the competition is talking, the more loudly you have to talk.
I’ve seen lots of business owners underestimate how difficult it is to get their customers’ attention. This just leads to underestimating the amount of time and money they need to invest in marketing to meet their goals.
In this way, competition informs both the quantity and quality required across all the other dimensions:
The more you need to compete to capture or create demand.
The more you need to demonstrate trustworthiness.
The more you need to fight to earn and keep customers.
The more creative you need to get with finding new customer sources.
Of course, figuring this out also requires you to measure and asses your competition, which is yet another planning step that many businesses don’t do in detail. It’s one thing to have an idea in your head - it’s another to have a detailed list comparing pricing, offerings, advertising, etc., that can help clearly identify your strengths and weaknesses.
So, the idea of competition may be intuitive, but it’s responding to it in these non-intuitive ways that allows you to compete.
Source
The final piece is building a list of customer sources to prioritize.
Where you’re going to get customers is usually the first place people start, which is why so many marketing plans are convoluted and ineffective. Leaders either jump to something they’re familiar with - i.e. social media, billboards, etc. - or they go along with whatever someone pitches them - i.e. SEO, local magazine ads, etc.
But you should only make those decisions after you’ve thought about all the other questions above, regarding demand, trust, relationships, and competition.
Did you determine that few people are searching for what you’re selling? Capturing people while they’re searching, like with search optimization or search ads, should be less of a focus than getting in front of people where they spend time, like with social media posting and ads.
Does your business lend itself to repeat purchases? You should make sure you’re re-engaging with your audience, such as through email marketing or text messaging.
Do you really need to earn people’s trust to close a sale? Case studies, testimonials, certifications, awards, press coverage, and excellent customer service should all be options to focus on.
Is the competition fierce? Then you should look at how they’re marketing, aim to match what they’re doing well, and consider other sources of customers that can help you circumvent their activities. For instance, if Google Ads are particularly expensive in your industry due to intense competition, you may have to consider other sources, such as networking, direct outreach, social communities, etc.
This is where you should be creative and willing to experiment with lots of different sources if it isn’t clear at the onset where to concentrate. There are usually many more ways to find customers than the normal list of services marketers try to sell you.
We hope this was helpful in planning for your own business! If you have questions, drop us a comment below, or book a meeting to discuss!