Marketing and advertising providers have often struggled to scale the SMB market due to the limited budgets of these advertisers and a large population of DIY marketers. However, a new Belly survey of 429 small business owners found that only about a third feel that they can’t afford to hire a marketing provider.
According to the survey, only 30% of SMBs said they don’t have enough budget to hire someone to run their marketing. The finding appears to challenge the notion that SMBs aren’t willing or aren’t able to invest in a marketing partner.
While it may be reassuring for providers to know that two thirds of SMBs may have the budget to work with a partner, the fact that the majority (71%) are DIY marketers creates more questions. If these businesses have the budget, why wouldn’t they work with an expert? After all, DIY marketing can often produce weak results, causing SMBs to draw the wrong conclusions about a marketing method or channel.
Whatever the case, the SMB market remains elusive. The study went on to say that lower revenue SMBs felt budget constraints hindered their marketing effectiveness while higher revenue SMBs said marketing success was directly correlated to time and knowledge, or lack thereof. Overall, the study found that SMBs plan to spend more on marketing in 2016, with 42% expecting to spend between $1k and $5k.
The survey had a balanced cross section of SMB respondents based on annual revenue. As the breakdown of marketing spending above shows, 78% of SMBs will spend between $1K and $10K this year, with the majority planning to spend between $1K and $3K.
The other interesting point from the study was that SMBs are putting more emphasis on acquiring new customers vs. retaining them. Only 28% said they plan to allocate the majority of their budget to retention though over 70% of their revenue came from loyal (repeat) customers. This suggests that SMB marketing priorities may emphasize acquisition more than it should.
Other studies have pointed to similar conclusions as Belly’s study, such as increased budgets for 2016, emphasis on acquiring new customers, and the time, knowledge and budget challenges faced by SMBs. However, the 30% from the study who said they don’t have enough to spend on a marketing partner suggests that it is actually DIY that may be the larger roadblock for marketing providers.
