How can they compete? Small Businesses playing in the Major Leagues
Kenneth Wisnefski, October 18, 2012
There are more than 23 million small businesses in the United States, representing 54 percent of all U.S. revenue. While the majority of these firms oftentimes have smaller marketing budgets versus larger firms, competing against the majors becomes an integral component to any small business marketing strategy and thus a major focus for sustainable growth.
Key statistics gathered from the Small Business Administration indicate that since 1990, as big business eliminated approximately 4 million jobs, small businesses actually added 8 million new jobs. While small businesses are essential components to the overall economy, it is becoming more challenging to compete in a global climate dominated by higher leveraged organizations; until now.
Lesser expensive and highly efficient marketing tools have entered the marketplace and such tools including social media, mobile marketing, and even paid search components now find their way in to small business strategic planning sessions. While these tools have proven to be extremely effective for the small business sector, there remains a significant percentage of small business owners who have been hesitant to accept the change. Given the fact that the median age of the U.S. based small business owner is 49.25 years, this generation is historically hesitant to change their marketing methods and incorporate modern-era marketing including using smartphones versus television and billboard advertising.
There are presently 116 million U.S. smartphone users, a representation of 37 percent of the overall population, according to eMarketer. While mobile marketing has become a larger piece of the pie, a recent study indicates that only 20 percent of local businesses said they are implementing mobile marketing. Simply put, businesses that focus the majority of their operations within a defined geographic radius are missing out on potential consumers, while larger competing firms are scooping up the opportunity. Take, for example, a local coffee shop losing business to Starbucks or Dunkin Donuts.
Leveraging social media is cost-effective and can dramatically increase the efficiency of a small business marketing strategy. Consumers are on social media. They are no longer tuned in to the TV and radio through the workday as much as they are checking in on Facebook, Twitter, and Google Plus. In fact, Facebook just crossed the 1 billion user mark and Twitter has an average of 6.9 million daily active users. Creating brand awareness and enhancing visibility through the use of social media has become a major asset to small business.
With the increase in small business advertising through the use of social media, mobile, and paid search, these firms are able to effectively reach their customers directly, using less resources than big business. Lesser advertising and marketing expenses can help a small business compete on price against the larger firms which can ultimately improve their bottom line and create sustained growth even in a recovering economy.