We've been thinking a lot about the big brands vs. the little guys and the big marketing budgets vs. the little ones. This is a big challenge for small brands, one that faces a lot of our clients. Especially in this climate where spending is down and costs are up - the first thing to be cut is often the marketing budget - so what do you do to keep ahead and keep your business alive and selling? I have worked in marketing for over two decades and seen a lot of changes in marketing over that time, but nothing quite like the climate we are in now. First of all let me acknowledge how hard this really is for small business (I have done marketing in both large corporate and small business so understand the vast contrast and challenge).
However, there are ways to unlock explosive growth and you don't need big budgets to do it. Here are my tips on how to effectively reach your target audience, allocate your budget, and stand out in a crowded marketplace when you are a small brand.
1. Continuous customer conversations
- Embrace messy, imperfect, continuous change- Always talk to your customer and iterate your ideas as you go
- Don’t think your revolutionary product or brand idea is better that it is - ask your customers and let the market validate it
2. Turn the usual market research process on its head
- Rather than broad, expensive market research to hit the elusive ‘statistically significant’ number - talk to 5 customers, deeply. Interview them face to face for at least 30 minutes and let them do all the talking. No leading questions, your goal is to understand them and their experience.
- Your key insights here come from watching your customer engage with your product, their reactions, their face - so much insight and gold comes out of these interviews
3. Test small, learn big
- Don’t put all your money into one big opportunity that ‘may’ turn big, i.e. paying an influencer all your money for 1 post hoping you will go global.
- Test lots of things with small budgets and then scale the ones that work. You are looking for signs of life and product market fit in certain channels to certain audiences. Once you know the winning formula it is repeatable.
- Allocate your marketing budget with a mix of long horizon brand spend and short sales return. You need to be both growing the top of the funnel awareness of your brand while also regularly closing sales and converting new customers at the bottom of the funnel. Ideally the split should be around 30% brand, 70% tactical in the first few years growing to be more evenly spread in future years.
4. Don’t go too broad too early
- Ideally have 1 brand to focus all your time on
- Don’t make the mistake of creating a house of small brands and duplicating all your costs over multiple small brands too early
5. Find some coat-tails to ride
- Education is really expensive, if your product is really unique and different and requires a lot of information to explain how to use it - you are going to be up against it and potentially running at a loss for years
- Instead, find a bigger brand that has already spent the money and educated the market about your type of product, position yourself against it and let customers know why yours is better
- Sometimes being second to market is also an amazing opportunity (a great example of this is Apple)
6. Let the brand adapt and grow
- Hold on tightly to your brand vision but hold very loosely to the plan of how you will get there
- Brands go broke digging their heels into their original plan even when the market has decided they don’t want it
Written By Nicole Short
Director, Black Ops Consulting (Marketing & Product Development Specialist)
One more thing as a bonus. Let me challenge your thinking with this research piece. Researcher and economic guru Paul Dyson found that the number 1 factor driving advertising profitability is actually market size. This has nothing to do with your creative, your strategy or anything in your control. Mind Blown. So big tip…. make sure you pick a big market when you launch your next brand.
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