How to Market Your Business on $1,000 or Less
OPERATE - NOVEMBER/DECEMBER 2013
Owners share how they market their businesses on a shoestring budget
Many small businesses overhauled their sales and marketing strategies to save money in the wake of the Great Recession. These days, it’s creativity—not cash—fueling their promotional campaigns.
Even so, marketing remains a major budget challenge for small businesses. “Small businesses often fail to acknowledge the difficulty that exists in attracting new customers,” says Ted Sindzinski, a digital marketing consultant in Orange, Calif. “Whether they bank on easy growth from word of mouth, their location or industry contacts, there’s a frequent build-it-and-they-will-come attitude.”
A Visa Small Business study released in November 2012 indicated that 27 percent of small businesses planned to increase their advertising/marketing spending, while 48 percent said they were unlikely to increase it. In addition, close to one-third of business owners reported that they would expend more effort, not money, on marketing.
These days, small business marketers are doing more with less through a range of carefully planned and executed strategies.
Here’s the good news: Success doesn’t have to mean big spending. We spoke with four small business owners who are flourishing on marketing budgets of less than $1,000 a year. While their tactics vary, they all show the willingness to experiment and pivot quickly when a strategy isn’t working.
Find Your Inner Stealth Marketer
When I Love Cupcakes LLC owner Sherry Sheppard was reviewing her finances last winter, she quickly realized her marketing campaign wasn’t working.
The Clearwater, Fla.-based bakery owner had spent $1,500 on marketing throughout the year, mostly on print ads in local publications and vendor events where the company “wasted a bunch of free product.” She’d increased her spending 50 percent over 2011—without any real payoff. “We thought if we spent more, maybe we would increase our sales,” Sheppard says. But sales stagnated. “It totally backfired,” she says.
Sheppard did an about-face, slashing her 2013 marketing budget to $500 and adopting new tactics. With the help of her husband, who runs a grocery store, she brainstormed some budget-friendly methods, opting to spend small chunks of money on more targeted campaigns.
By mid-summer, she had spent about half of her budget but was bringing in roughly 10 to 15 percent additional revenue over the previous year. Here’s a breakdown of how she’s grown her business so far:
• Cross-promotional postcards: Sheppard’s wedding-event business doubled after she cross-promoted her business with a florist, photographer, hair salon and other wedding-related services. Each business hands out postcards listing everyone’s contact information, and the owners refer customers to one another. Budget: $50
• Fliers: Sheppard bought 1,000 fliers through discount printing service Vistaprint to distribute in stores and other locations throughout her area. Budget: $80
• Contest entry: Always on the lookout for deals, Sheppard entered a contest in a local newspaper, which included a mention in an online banner ad. A bonus: I Love Cupcakes won Best Bakery and Best Kept Secret in her county. Budget: $70
• Coupons: Sheppard had 1,000 coupons printed that offered a 10 percent discount, and she distributed them along with the fliers. In July, the coupons hadn’t run out and had already brought in a $3,150 return on investment. This tactic also lured new customers into her bakery, some of whom are now repeat customers. Budget: $60
With the remaining $240 in this year’s budget, Sheppard plans to distribute more coupons and create a promotional car wrap for the back window of her personal vehicle. “You just have to look at the big picture,” she says. “As long as you’re smart about what you’re doing, you don’t have to spend a lot of money to get the return you want.”
Take Cues from Your Competitors
When Money Crashers CEOs Andrew Schrage and Gyutae Park launched their financial advice website in 2010, they had the right tools in hand to market their business—but it took some elbow grease to determine the best way to use them.
At first, co-owners Schrage and Park tried to engage their audience by writing and posting personal finance articles on free social media channels such as Facebook and Twitter. To promote their efforts, they spent about $100 on Amazon gift cards, which they offered to readers, followers and others who interacted with them online. However, that initial push proved insufficient. The company was stuck at 5,000 subscribers. (Although subscriptions are free, subscription numbers attract the advertising dollars necessary to build the business.)
“In the beginning, we simply failed to realize the true potential of social media marketing,” says Schrage, an NFIB member.
After taking a closer look at the competition, the team changed course. “We noticed that blogs that were highly involved in social media were doing a great job of increasing website subscriptions,” Schrage says.
Because the majority of Money Crashers’ revenue is based on subscriptions and website page views, the owners set a new goal: boost page views by improving their social media strategy.
Their most successful marketing tactic stemmed from reader comments expressing interest in a TweetChat. Soon, Schrage and Park were moderating weekly discussions on Twitter, covering topics such as taking advantage of frequent flier miles and avoiding credit card debt. At the end of each session, they would remind participants to refer their friends and family to Money Crashers.
After each chat, they noticed two key performance indicators: a significant bump in the number of visitors to their site and a dramatic rise in Twitter followers. More followers translated into more subscribers. In 2010, subscriptions doubled to about 10,000, enabling the company to charge twice as much for advertisements on its site. Not a bad return for something Schrage says took only a few hours a week.
Schrage also cultivated relationships with reporters, appearing on MSNBC’s Business War Chest and earning mentions on ABC’s Good Morning America and CBS News—something that only cost him time.
Subscriptions at Money Crashers are now tracking at more than 26,000. The additional revenue allowed the business to hire a social media expert to handle marketing. In addition to interacting with potential subscribers on Facebook and Google Hangouts, a social media chat service, the marketing manager researches money-saving strategies and other personal finance topics for the Friday TweetChats started by the owners. TweetChats remain one of the company’s most successful means of attracting new subscribers.
Schrage and Park learned a valuable lesson along the way: It’s not the size of the investment, but the strategy and effort behind it that will make marketing efforts pay off.
Offer Services for Free
To make a name for itself among movers and shakers in the local arts scene, public relations and event-planning agency Flock and Rally in Columbia, S.C., did the unthinkable: It gave away its services for free.
It seems counterintuitive, but pro bono work can be one of the best ways to promote a small business. It’s particularly effective for companies in a competitive niche that are not yet recognized by the local market, says Crystal Kendrick, a marketing consultant in Cincinnati.
“You have to be strategic about the work you do and the time commitments that you allocate,” Kendrick says. “You also have to be mindful that you’re running a [for-profit] business.”
For the pro bono approach to deliver results for NFIB-member business Flock and Rally, owners Tracie Broom and Debi Schadel focused on several elements:
• Establish a niche
• Target organizations with similar missions
• Connect with decision-makers
• Monitor output
When they launched in late 2010, the pair took turns doing volunteer work such as monitoring and event planning for a nonprofit art gallery as a stepping stone to becoming a leading agency for arts events. They traded event and public relations consulting for sponsor recognition, building a clientele through referrals. The gallery’s board comprised civic leaders, executives and other local influencers. Broom did event planning for the organization and eventually held the volunteer title of hospitality coordinator.
The strategy paid off. Flock and Rally has received a five-figure contract for the art organization’s signature event, in addition to referrals for other big contracts. Since launching, the company has grown its client list from three to more than a dozen.
But Broom reached a tipping point when she realized her agency had volunteered 200 hours in a period of six months—time that would cost paying clients up to $125 per hour. She started tracking her pro bono hours and started saying “no” to all but a few of the most time-consuming events.
Though still small, Flock and Rally has gained a reputation as one of the go-to local agencies for arts and philanthropic promotion in the region.