The goal of a commercial business is to increase sales, and retaining current customers is key to making this happen. But according to a new report from The Manifest, only 6% of small businesses are focused on retaining their customers. This is despite the fact their main digital marketing goal is to increase sales.
The data reveals most small businesses aren’t placing a priority in engaging existing customers. The report attributes this to a shortfall in their budget and resources to maximize their efforts. Additionally, they are relying on in-house teams to carry out these tasks.
While some businesses may have truly qualified in-house staff, it is not the case for most organizations. As Emily Clark, who wrote the report for The Manifest, says, “… small businesses do not always explore the benefits of different marketing strategies like SEO.”
Clark adds, “Small businesses realize the value of digital marketing but can improve their strategy with better resources and goals.” The report looks to give small businesses insight into choosing the best resources for their digital marketing efforts.
The data for the report comes from a survey of 529 small businesses across the U.S. about their marketing resources and annual budget. Although the participants include businesses with 1 and 500 employees, 54% only have 1 to 10 employees. So, the majority are really small businesses.
The survey respondents are male (52%) and female (48%), with millennials (29%), Generation Xers (45%), and baby boomers (27%).
Survey Findings
Businesses want to increase their sales, but there is a great disparity in how they go about doing it. If only 6% of small businesses are focusing on retaining their customers, it means 94% are not fully aware of the benefit of this effort.
The report says businesses are missing out on easier sales which come from engaging existing customers. Because compared to new customer acquisition, it is much cheaper.
The success rate of selling to a new customer is 5 to 20%. On the other hand, it is 60 to 70% for existing customers. So, the fact only 6% of small business are retaining their current customers offers huge opportunities.
As the report says, the lack of resources is one aspect. And it is not only financial, but it is also knowledge-based. While most small businesses (60%) use an in-house team to promote their digital marketing strategy, only 33% use marketing software. And because digital marketing is an essential component for retaining customers in today’s ecosystem, how it is applied plays a big role.
With marketing software employees can schedule content, organize projects, and track metrics. But it will take experts who can optimize the software and other technologies to deliver. In order to make this happen, 40% of businesses are hiring digital marketing agencies and 39% are using freelancers.
Clark says both the agencies and freelancers offer similar value. Adding they are usually more experience in a particular field of marketing than an in-house team. She goes on to say, “Hiring a noted expert in the community can ensure that businesses receive the best results on their projects.”
Marketing Budget
The marketing budget of any organization will dictate how far they can extend their reach. And for small businesses, the budget is almost always in a state of flux. But according to this survey, 36% spend less than $10K annually on digital marketing.
However, the report says the data also accounts for marketing employees’ salaries. So the 36% of businesses are paying a marketer $10,000 a year or they do not have marketing employees. And when it comes to the marketing, small businesses also have many different approaches.
Not everyone is looking to get $10K in ROI from direct sales. Some businesses create campaigns to spread the message of the company to increase interest with the goal of acquiring long-term customers.
Businesses launch campaigns for everything from brand awareness to lead generation, product launch, special promotions, sales and more. The key is to optimize today’s digital marketing solutions, talents, and opportunities to grow your business.
Clark ends the report by saying, “Small businesses realize the value of digital marketing but can improve their strategy with better resources and goals.”
You can read the full report here.
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