The small business marketing guide

First published 18 December 2018 • Updated 02 October 2019

Market sign

Virtually every business needs to carry out marketing. Whether through advertising, social media, events, word of mouth or any other method, you must somehow make your potential customers aware of your products and/ or services and – most importantly – want to buy them.

Big companies can spend millions on marketing. Your small business probably doesn’t have that luxury, so you’ll need to think carefully about how you get maximum marketing impact from every pound you spend. This guide should help you begin. You can also consult your accountant about the best way to budget for marketing.

Here's what you can expect from this small business marketing guide:

What is marketing?

Identifying your market

How to use market research

What are the main kinds of marketing?

Four types of marketing for small businesses

Word of mouth marketing

Creating your marketing strategy

Writing a marketing plan

Marketing on a budget

What is marketing?

Marketing is the process of finding your market and connecting with it. This makes it quite distinct from selling, which is pushing your products or services to a market that is already lined up waiting.  You can think of marketing as the process of ‘matchmaking’ what you have to sell with the ideal customers to buy it.

Marketing is also about generally raising awareness of your business offering, in the hope that this will filter through to your target market. You might also use it simply to maintain your current position in the face of competition, to remind people that you’re there (this is known as ‘defensive’ marketing).

Identifying your market

The first step in marketing is identifying your market. In many cases this might seem obvious, but it isn’t always. For instance, if you sell your own style of baby sling, you could say that your market is new parents – but is your target just mums, or mums and dads? Or perhaps it’s designed specifically to appeal to dads most of all? It is the fine details and USPs of your product or service that will help to identify your core market (the people most likely to be customers, accounting for around 80 per cent of sales) and your peripheral market (a broader demographic, from which a significant 20 per cent of sales may come).

The surest way to zero in on your core and peripheral markets is with some market research.

How to use market research

Market research is an essential marketing tool. It can help you to:

  • test your assumptions about your target market
  • understand your customers better
  • explore other potential markets
  • identify areas for improvement in your marketing plan
  • fine-tune your brand
  • highlight new marketing opportunities
  • find the most efficient and effective marketing strategy
  • improve your product

You can conduct simple, low-cost market research yourself using tools like online surveys, though this may be of limited value. Professional services are available for more in-depth market research such as product testing and UX (user experience) research. Before going down a particular route, identify what questions you want to answer and why, so you can justify the cost. Also be sure to keep an open mind, and take notice of the findings even if they aren’t what you hoped for.

Now you can think about what kind of marketing you need to do.

What are the main kinds of marketing?

Marketing may take dozens if not hundreds of different forms, but most falls within one (or more) of the following four categories:

  • Above-the-line (ATL)
  • Below-the-line (BTL)
  • Direct
  • Digital

Here’s a quick introduction to each category.

Above-the-line marketing

ATL marketing is the most obvious and visible kind. Essentially ATL involves mass media – e.g. TV, cinema, radio, billboards, the press and high-profile internet sites. Its message is typically broad, aimed at a wide range of consumers instead of targeting a few. For a small business, ATL marketing will usually be restricted to radio and the press (perhaps local in both cases), billboards and the internet.

Below-the-line marketing

BTL marketing targets smaller audiences that are more carefully defined. Instead of mass media it relies on a combination of online and offline communications, tailored specifically to those consumers. Types of BTL marketing include online adverts, search engine campaigns, social media, PR and content marketing (i.e. producing interesting articles that link to your business). BTL marketing may also take the form of events (e.g. product parties, festival stall), free samples and word-of-mouth. The impact of BTL is generally easier to measure than that of ATL.

Direct marketing

Direct marketing is a form of BTL marketing that involves contacting potential customers directly (as opposed to letting them find you). This can be through emails, telephone calls, physical mail (e.g. letters, catalogues), text messages and so on. The challenge is to target those customers most likely to respond favourably, otherwise you can easily damage your brand by being seen as a nuisance. For this reason, direct marketing should be accompanied by thorough ongoing market research.

Digital marketing

Digital marketing can be BTL or ATL, and simply means any form of marketing that uses the internet or email. Examples include web ads, pay-per-click links, smartphone ads, social media, email and content marketing. Digital marketing can be low cost, but requires considerable expertise to achieve value for money.

Four types of marketing for small businesses

Within the main categories of marketing there are dozens, if not hundreds, of specific marketing types and strategies, with more being innovated every year. However, the following four types can be seen as the key ‘four wheels’ of a new growing company. They should complement one another, each one feeding into the rest to make them more effective.

Four types of marketing

1. Email marketing

One of the simplest ways to reach customers is directly via email. This of course means you must acquire their email address – but you also need their goodwill. There is no point buying a database of email addresses of disinterested people who will delete or junk your messages. What you need to do is gather the addresses of people likely to show an interest in your product. This means attracting their attention somehow, such as with

  • free gifts
  • exclusive content
  • competitions
  • discount vouchers
  • events etc.

In this way you can build up a mailing list of people already engaged with your brand. Once you have this valuable resource, nurture it and don’t sweat it too hard. Avoid sending marketing messages without further incentives to stay subscribed, such as

  • exclusive discount codes
  • early news about new products
  • product tips
  • interactive features (e.g. more competitions)
  • other useful, interesting or entertaining content

You can then piggyback your marketing messages on these incentives, so that your potential customers gain something whether they choose to buy from you or not. A good rule of thumb with email marketing is ‘Give – and hope to get back.’

The other three forms of marketing below can be excellent opportunities to get hold of potential customers' email addresses, allowing the whole process to begin over again.

2. SEO marketing

SEO, or search engine optimisation, has seen a huge surge in influence in recent years. Essentially, it is the process of designing web pages in the way most likely to get picked up and ranked highly by the major search engines, such as Google and Bing. It’s as much an art as a science, since search engines are constantly evolving and updating their criteria, and the changes are not always explained to the public. But by putting significant effort into SEO, you can increase the chances that people searching for a product or service like yours will come across you sooner rather than later. You should also be able to increase traffic, which in turn will improve your SEO, in a snowball effect.

Be aware that SEO doesn’t stand still. Like a garden, you need to tend it regularly if you want it to bear fruit and not deteriorate.

3. Social media marketing

A social media presence is now more or less essential for a small business – but just ‘being there’ isn’t enough. Your social media channels (Facebook, Twitter, Instagram etc) are the easiest and most efficient way to project your business’s personality and ‘make friends’ with your potential customers.

Social media novices often make the mistake of launching straight into marketing, which may only alienate your audience. The first step is simply to make your presence known, engage with people on their terms, project a friendly personality, be interesting, and make people aware of what you do. Once you have built up enough followers this way, you can start introducing more overt marketing.

One such form of social media marketing is sponsored posts. Facebook in particular can be very effective for this, and far more economical than traditional media advertising. Take time to develop an appealing campaign, make it engaging in its own right, and then experiment with paid posts, gradually increasing the spend as you identify the most effective strategies.

4. Event marketing

In the good old days, tradespeople who wished to sell their wares would simply head off to market. And really, not much has changed. You can make big strides into building your customer base by appearing at events such as festivals, fairs and any other big occasion where your typical customers might be present in large numbers. For example, if your business makes cakes, a wedding fair would be ideal; if you sell sports equipment, then you might target sports tournaments. At these events, engage people with your brand via things like free gifts, snacks or activities, and gather their email addresses. You can then proceed to email marketing.

So far, so obvious – but of course this kind of marketing comes at a cost. Pitches at the most popular events are highly sought-after (and therefore costly), so a bit of lateral thinking never goes amiss. Think about the less-obvious places where your ideal customer might go, and consider targeting those. A little market research can pay off here.

Word of mouth marketing

A final type of marketing that is essential to any size of business is word of mouth. This can be one of the most effective forms of all – but there’s a catch. Word of mouth is out of your direct control, since it depends on what other people say and do. Therefore, the way to shape your word of mouth marketing is to optimise the conditions for it, while working hard on all other aspects of marketing and customer relations.

Here are some top tips for great word of mouth marketing:

1. Have an awesome customer complaints service

Treasure every customer who complains. A dissatisfied customer will tell between eight and 19 people about their experience. Which is good for you – if you have dealt with their complaint by that time. Every unhappy customer is therefore a potential advocate, even more so than a satisfied one. Listen to them and do your best to delight them.

2. Maintain a strong social media presence

Make sure you can be found on the social media channels most used by your core customers (see above). If this is where people will talk about you, it’s vital to be able to join the conversation and keep tabs on what people are saying.

3. Use customer reviews

Encourage customers to review your offering and link to a suitable review service such as Trustpilot. Using such a service demonstrates confidence in your product and a willingness to listen to customers. If someone posts an unfair review, don’t immediately slam it – engage politely and show other users how reasonable and understanding you are.

4. Focus on excellence

Ultimately, no-one will say nice things about you unless you genuinely impress them. So don’t just put all your efforts into marketing – save most of your energies for providing the best products or services you can.

Creating your marketing strategy

Your marketing strategy should form part of your business plan. It will clearly define the following elements: What, Who, Why, Where, How, and How Much?

  • What are you selling?
  • Who you are selling to?
  • Why do they want it?
  • Where will you sell it?
  • How you will sell it?
  • How much will you sell it for?

‘What’ should be the easiest part to answer. ‘Who’ may seem obvious, but by doing your market research you can identify both your core customers and your peripheral market. Work hard on the question ‘Why’ they want your products, as this will help you refine your USPs.

‘Where’ you will sell your product is a key question. Online, offline or both? By post or in person? Fixed or mobile? But the core of your marketing strategy is the question ‘How’ you will sell your products. How will you let your market know, and what promotion methods will you use? It will be easier to answer this question once you know the other elements: the ‘What’, ‘Who’, ‘Why’ and ‘Where’.

Now you are ready to create your marketing plan.

Writing a marketing plan

Your marketing plan is a practical document: it is the list of activities you will carry out in order to market your business. Your starting point is the ‘How’ section of your marketing strategy (see above). This contains only the broad types of activities you mean you use, so in your plan you need to refine these to definite actions and create a budget for them.

As you develop and implement this practical plan, you may encounter problems with your original marketing strategy – e.g. is it too costly, is it using the wrong marketing channels, is it focusing on the wrong audience or USPs? Feed back your findings into your strategy and update it, so it is constantly being refined. Keep both the strategy and the plan updated and aligned – don’t just deviate from them, as that will leave you with unstructured marketing.

Marketing on a budget

If you don’t have a huge budget to spend on marketing, here's a recap of some of the low-cost solutions that can work for small businesses - some of which are covered in more detail above.

  • Social networking – it gets your name out there
  • Low-cost merchandise (e.g. t-shirts or balloons with your logo)
  • Sponsoring local kids’ sports teams
  • Put an advert on your own car
  • Eye-catching business cards
  • Set up stalls at local events with free giveaways
  • Enter business awards
  • Customer referral programmes
  • Instructional videos – put something really useful on Youtube and the hits will roll in

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About the author
Nick Green
Nick Green
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.