Marketing is the most sustainable and effective way to achieve an exponential, organic growth for SMEs. How? By gradually lowering your customer acquisition cost and increasing the customer lifetime value.
Marketing is one of many investment areas for a B2B SME's CEO to consider. Notice that I said "investment" rather than "cost"? Marketing is an investment and should be considered as such if you were to make the right decisions along the way and generate a substantial ROI.
Not all businesses decide to invest in marketing. And certainly, not all businesses invest the same amount of money in marketing. Some have close to zero marketing budget. Some invest 5% of their revenue. Some invest over 20% of their revenue. It all depends on the business objectives they are trying to achieve.
Among various reasons for an SME to start investing in marketing, an exponential growth is definitely one of the major reasons. Here is a scenario. Your business has been around for over a decade. You experienced growth first few years. The business has not seen the rate of growth for the last few years and you are ready to make some changes. And you would like to achieve an organic growth, not through merger and acquisition.
The most sustainable way to achieve an exponential organic growth of your business is through marketing. Many SMEs, especially B2B service organizations, hesitate to invest in marketing because the potential return on marketing investment is not as straightforward and not as immediate as, for example, hiring another sales representative.
Hiring another sales representative brings you the similar (or slightly better return if that new hire is an exceptional talent) return as before. You can't efficiently scale by adding another staff to your sales team. The cost per lead and your overall customer acquisition cost will remain rather same.
In contrast, investing in marketing will gradually lower the cost per lead and the overall customer acquisition cost by expanding the top of your funnel way more efficiently and by increasing your customer lifetime value.
Marketing expands the top of your funnel most efficiently.
It is impossible to achieve 1 to many communications without marketing. The type of demand generation activities a sales person can perform (such as cold calling and emailing, attending events, etc.) is simply not as scalable and therefore, is costly. Furthermore, consumer behaviour has been changing rapidly. They shop (and go through the education and evaluation stages of their buying journey before making the purchase decision) online, both in their professional life and personal life.
When you invest in marketing, your website attracts the people you want to talk to. They come to you. Some example marketing activities you can invest in to achieve the 1 to many communications is to publish blogs, host webinars, refresh your website, and send email newsletters.
Marketing increases your customer lifetime value.
Marketing is effective to not only attract net new prospects but also to grow your returning customers and referrals from them. According to HBR, customers who are fully connected to a brand is 52% more valuable on average than those who are simply satisfied. Humans are emotional being. Our subconscious mind has a lot more to do with our decision making than our conscious mind does. In fact, our subconscious mind is responsible for 95% of the decisions we make. Branding, which is and should be part of your marketing plan, is all about creating the positive, desirable perception about your business. And when done right, you can effectively and efficiently increase your customer lifetime value which leads to a higher return on your marketing investment.
So, where to start?
The crawl-walk-run concept certainly applies to marketing. When the previous investment in marketing is minimal, instead of trying to do too much at once, start small. To know where to start and where to focus your resources on, the 6PM (6-pillar marketing) Framework is an ideal tool to use.
The 6PM Framework visualizes six aspects of a marketing plan as you see in the image above. Starting small doesn't mean that you should focus only one or two aspects of marketing. No matter how small your starting point is and starting budget is, it is important to have a balanced marketing plan if you were to establish a solid foundation for your future marketing effort and generate results. The 6PM Framework is really handy to create a balanced marketing plan.
Using the house analogy, your marketing plan should have a foundation and a roof. The foundation in marketing is branding and the roof is marketing data analytics . The main living area of your marketing house is your marketing strategy which is divided into four rooms: attract, engage, delight, and grow.
The number of elements in each of the six pillars and the level of complexity within each pillar vary based on where you are on your marketing journey. But not leaving any of the six pillars completely empty is a key to lay a solid foundation.
To learn more about the 6PM Framework, watch the introductory workshop below or watch the 5-minute summary here.