How to manage a small marketing budget - Advice from Seth Godin, Rand Fishkin, and Louis Grenie
For small businesses, the concept of a marketing budget is very flexible. Half of all small businesses (in the US) do all their marketing in-house. And one-fifth of them don't even have dedicated marketing teams. Clearly, marketing & advertising are not their first priority.So with the small amount set aside for marketing activities, what is the best way a small business can spend it to get the most mileage out of it?As a small business serving other small businesses, it has become an existential question for us, so I posed this question to the experts: Seth Godin, Rand Fishkin, and Louis Grenier.
For small businesses, the concept of a marketing budget is very flexible. Half of all small businesses (in the US) do all their marketing in-house. And one-fifth of them don't even have dedicated marketing teams. Clearly, marketing & advertising are not their first priority.
So with the small amount set aside for marketing activities, what is the best way a small business can spend it to get the most mileage out of it?
As a small business serving other small businesses, it has become an existential question for us, so I posed this question to the experts: Seth Godin, Rand Fishkin, and Louis Grenier.
To be frank I wasn't expecting to hear back from them but they graciously responded with some incredible no-nonsense advice.
Important note: I'm afraid if you're expecting this article to be just another list of tactics like 1) Tiktok ads, 2) Quora, 3) Creative agency, you're going to be really disappointed.
That said, here's what they had to say about it.
Start with the why
"...Throwing money or time+effort at marketing tactics because they've worked in the past or because they're popular, without first establishing who you're targeting, why, and what you want them to do is a recipe for waste." - Rand Fishkin
Before addressing where to spend, Rand Fishkin, in his response, stressed upon thinking long and hard: "Why are you doing marketing? Is it to turn a certain set of your audience into paying customers? To reach a new audience with your brand? To nudge folks who already know and like you to become newsletter subscribers so you have their email and can convert them in the future?"
These big questions which are inextricably linked to what you're doing as a business are your North star. Answering these first, Fishkin says, can make a marketing campaign vastly more successful.
"Once you know what you're trying to accomplish (and why)," says Fishkin, "you can assign dollars to experiments in the right channels."
Here's a cliché: There's no one size fits all. What might be a great way to spend the big bucks for one business might not make sense for another.
That's why it's necessary to experiment. And to set aside some of your marketing budget to figure out what channel or tactic works and what does not.
There's no limit to the experiments you can run. Some examples are:
- the copy eg. the tone, length, vocabulary
- the visuals eg. pictures of people, bright colors
- the platform eg. the audience on Facebook vs the audience on Linkedin
- the characteristics of your target audience. eg. a corporate accounting firm might not find its customers on Instagram because they couldn't care less for it.
So there's really no limit to the type of experiments you can run. Thankfully, there's a way you can narrow it down: involve your customers in coming up with them.
Make your product or service more remarkable
"Spend your budget, all of it, on one thing: making your product or service more remarkable." - Seth Godin
In his response, Seth Godin had only this powerful thing to state.
A good product sells itself. So, you should use the budget you have to make it so amazing that people won't be able to shut up about it. They'll tell their friends, and their friends will tell their friends.
It's no surprise that word of mouth is still the strongest form of marketing. It is compounded by online networks on social media, Whatsapp groups, and other forums.
If people have a great experience they'll tweet about you, or tell their colleague about it. If it's bad, they'll go further and make sure everyone knows about it.
So then the question is, how do you go about creating that remarkable product or service? How do you build demand around it? And how do you become the go-to service in that category?
Involve your customers at every stage
In Louis Grenier's chat with marketing guru Seth Godin, Seth mentions that you should "market with, not at people."
Sounds nice, but what does that mean?
It means that you shouldn't just involve your customers when you're finally showing them ads, you should include them in every step before that too.
For example, find out the best way to get in touch with them. Just that small bit of information coming from your future customers can allow you to create better hypotheses for the experiments you run. And that might save you a lot of guesswork (and money).
To involve them, you can do qualitative and quantitative user research. Talk to your ideal customers face-to-face (over Zoom), or run a small survey and distribute it amongst your ideal customers. Use those insights to narrow your experiments down.
Focus your efforts on the smallest possible audience
You can't be everything to everyone. But you can be something to someone.
That's why you need to focus your limited resources on a small audience.
Californian families with young kids looking for the best place to stay in Paris for their holidays
See how it's suddenly so much easier to put yourselves in your customers' shoes?
The better you can empathize with them, the more personalized your solution for them would be.
The better you can understand them, the more dollars you'll save by not marketing to people who are not your target audience.
As it stands, businesses are wasting millions of dollars each year on badly targeted ads. And you can't afford to join that group.
Provide value for free
"Create an abundance of confidence and trust in you. Become indispensable" says Seth Godin.
Out-teach everyone else in the space you're in. Especially for a Professional Service provider like an accountant or a consultant, it's important that you provide a lot of value upfront.
This will allow your target audience to trust your opinion and expertise in that niche. But don't just stop there. Put some effort and resources into taking that piece of content from good to amazing. Ask for feedback from your target audience to do that.
Even better if this valuable content or service is created for that smallest possible audience we talked about previously. The more focused, the easier it is for you to become indispensable in the eyes of that audience.
This will probably be one of the best investments you make; it can keep bringing your target audience to you long after you've published that piece of content.
Of course, it's up to you what that looks like. At Contento, we've published an e-book that we think is an extremely valuable guide for Professional Service providers today. For you, it could be a podcast (like Louis Grenier's), or a blog like Simo Ahava's that packs a ton of insights and data for analytics geeks.
The focus is this: that value you provide for free should establish your expertise in that space. That's why your audience will respond to your Call-to-Action.
Stick to it
As Seth Godin puts it, "Make a spinner and spin the wheel."
It's easy to run after the next shiny thing, and it's easy to get distracted. But remember, good things take time. If you've made sure you're targeting a very specific audience, providing a personalized and remarkable product, and giving away incredibly valuable advice to them for free, people will start realizing your value, and turn to you for answers. It just might take some time.
That's why you gotta stick to your guns.
To summarize, if you want to manage a small marketing budget...
- Think about why you're doing marketing. What do you want to achieve.
- Focus on the smallest possible audience.
- Create truly valuable content for this small audience. Give it away for free. Become the indispensable middle-man.
- Involve this small target audience at every stage. eg. Product development, what message to communicate, what channels to target.
- Experiment with marketing tactics and channels with the inputs you got from your audience.
As Seth Godin says, take all your marketing budget, and spend it on making your product so remarkable, so valuable, that it becomes the talk of the town.
Simple enough? 😉