Small business owners often think that offering a good product or service is enough for effective promotion. But even the highest quality product won’t sell just because it exists. Making the sales wheel turn is a serious and laborious marketing process. Many entrepreneurs try to work without basic marketing knowledge and make mistakes that hinder business growth.
Here are just some marketing mistakes made by entrepreneurs and small businesses.
Not Tracking Results
To understand the current state of a business, you need to track promotion results and keep records. The key metrics are:
ROI (Return on Investment) – the investment return rate. It shows which direction the investment went – brought profit or losses. ROI helps develop business strategies, forecast the budget, and assess the effectiveness of financial investments.
This is a dynamic indicator, so you need to track it regularly (during or immediately after the next promotional campaign). Common entrepreneur mistakes are not monitoring dynamics, rarely calculating ROI, or not calculating it at all. This is largely due to businesses lacking time for tedious data aggregation and manual calculations. Although ROI can be determined automatically. This will speed up the process and save time.
KPI (Key Performance Indicators) – numerical indicators that help assess promotion results and understand how effectively a business achieves its goals. These can be assessments of employee, department, online promotion performance, etc. KPI gives an idea of marketing investment return and allows planning sales volumes and rates. For unsatisfactory employee performance, additional incentives can be developed to motivate staff to be more productive.
LTV (Lifetime Value) – the profit that a business has received over the entire period of cooperation with one client. Helps understand how much money one customer brings. That is, LTV shows which audience generates the highest income. Based on this, you can identify the most loyal customer categories and focus sales on them, as well as develop an effective customer retention strategy and create individual offers for each target audience segment.
Even if a business is developing successfully, it is still important to know exactly which actions have a positive effect. Without tracking promotion metrics, you cannot understand which tools work and which need to be optimized. Only through regular monitoring can you identify the optimal promotion methods. The entrepreneur may be wasting the budget unknowingly.
Cutting Marketing Budgets
Many entrepreneurs see marketing as an expense rather than an investment, so they seek to reduce promotion costs. Meanwhile, marketing allows you to build a product line, analyze all the figures, calculate margins, create an effective advertising campaign. This tool is essential for finding customers and making sales happen. An experienced marketer will help save much more money instead of wasting the budget on experiments. A skilled specialist will immediately identify the most effective promotion methods.
Working Only With New Customers
Small business owners often focus only on attracting new customers and forget about consumers who have already purchased a product or used a service. But it is much easier to sell a product to those who have already bought it from you. If a customer is already familiar with the product/service and was satisfied with the purchase, they will be ready to continue cooperating with the business.
Ignoring Importance of Sales Funnel
Regardless of the type of commercial activity, product type and business strategy, all consumers go through a sales funnel. This is the customer’s step-by-step path from getting acquainted with the brand to making a purchase. For some, this path consists of two steps (for example, the customer saw a product on the shelf and immediately bought it). And for other businesses, the funnel may include many steps: a potential consumer saw an ad – called the company manager – received a commercial offer – visited the office – bought the product.
Why Businesses Need a Marketer
The task of entrepreneurs is not only to develop a funnel and guide clients through it, but also to monitor this movement. Many entrepreneurs do not look at exactly what stage a person stopped and did not make it to the purchase. Regular monitoring helps understand which tools better promote customers to the next stage, and which work inefficiently.
A well-built marketing process is the key to a successful business. Every entrepreneur should be familiar with the basics of marketing, understand basic terms and metrics, and not skimp on specialist services. Joint work of businessmen with marketers will help find optimal promotion tools, attract the target audience and increase business profitability.