Profile: Jeremy Gilley

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Small business digs deep into marketing mix

Small and medium-sized enterprises are bucking the austerity trend and investing an increasing amount of cash in a wide range of marketing activity, according to research seen exclusively by Marketing Week.

Many small to medium-sized businesses (SMEs) are improving their chances of survival in these testing economic times by increasing their overall use of marketing channels, according to research commissioned by SME marketing specialists B2 Group.

The survey, which was carried out by fast.MAP in May 2010, demonstrates a good level of business confidence among SMEs. Many are exploring different marketing methods in a bid to boost business, with 44.2% using web advertising as part of their marketing activity, according to the fourth wave of the monthly tracking study exploring SME attitudes. However, other online and offline channels are also proving popular with outbound email being used by 38.2% of SMEs surveyed.

The businesses are developing sophisticated integrated strategies, says Paul Seabrook director at fast.MAP. “It’s not just about ticking a few boxes – ‘we’ve got a good website, we send out lots of emails every month’. They’re thinking more strategically about where else they need to grow, how to increase their networking and their level of competitor intelligence.”

As a result, the use of conferences and exhibitions as a marketing tool has increased the most when compared to other promotional methods, with 29.7% of respondents saying they use conferences and exhibitions, an increase of 7.4% since the tracking study launched in February. The popularity of PR has also increased by 7.2%, with 16.9% of SMEs using this service. Customer acquisition DM has also increased by 4.9% to 25.7%.

These marketing disciplines have all increased ahead of web advertising, showing that despite the mounting popularity of online channels, traditional platforms remain extremely relevant for this sector.

“It’s about getting competitive advantage,” says Seabrook. “SMEs know that their competitors are likely to have a very good website and run outbound email campaigns, so you’ve got to be looking at what will differentiate you. It’s relatively easy for small businesses to get good presence on the web and on digital channels, so SMEs are probably a bit limited as to how they can grow that.”

Direct mail, for example, now gets very good cut-through, adds Seabrook. “It is more expensive to use than digital channels, but you are likely to achieve greater stand-out than email because fewer people are using DM.”

Although SMEs are keen to take advantage of the communication mix available and understand the benefits of an integrated approach, there are some channels that have decreased in popularity, most notably those related to print media.

The use of directories among the SMEs polled has decreased by 4% since February to 28.5%, for example. “Offline directories are facing a hard time because business people searching for services are generally going to look online. People may be thinking that they can make their budgets work harder in the digital channels,” says Seabrook.

Search was the only non-print media channel to decrease in popularity going from 16.8% in February to 13.3% in May, a decline of 3.5%.

Seabrook notes: “Search has done exceptionally well, so the decrease may be down to SMEs being reluctant to over-rely on search. They may want to make sure that they have other channels supporting search.”

Looking to the future, web advertising is by far the most popular with 40.4% of SMEs surveyed expecting to increase their spend in this channel. Similarly, 25.2% expect to spend more on outbound email in the months ahead, 16.6% on DM, 15.2% on conferences and exhibitions and 13.9% on pay per click.

“The SME community is a very hard working and time-pressured group, but it is still thinking strategically about what’s right for their business,” says Seabrook. “There’s an appetite to learn and SMEs want to make sure they are not missing out on the increase in market demand that should be coming through as we come out of recession.”

Although the economic climate has yet to stabilise, SMEs believe that investing in marketing will secure their future, argues Andrew Colwell, marketing director at B2 Group. “Because a lot of people have been battening down the hatches for such a long time, it’s a very positive statement that SMEs are looking to increase spend on going out and winning new business,” he says.

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WE ASK MARKETERS ON THE FRONTLINE WHETHER OUR ’TRENDS’ RESEARCH MATCHES THEIR EXPERIENCE ON THE GROUND

Amy Faulkner, supporter recruitment team manager, WaterAid

We don’t use conferences or directories. The biggest spend for WaterAid is TV and inserts. We do spend on online activity, but web advertising and email are both things that we’re looking to invest in further. We haven’t previously had the time or the knowledge to invest in either properly. You can get some very good media rates, so it’s about being able to take advantage of them quickly.

We don’t do cold direct marketing but we do send mailings out to our current database. We ask some people to give one-off gifts, while other times we’ll mail people to ask them to upgrade their regular gift and we’re still seeing a good return on that. What works really well is phoning people to ask them to upgrade their gift. That’s the same with all charities. 

We are a member of the Direct Marketing In Fundraising Group, a free network that gets together every two months. There is a representative there from the direct marketing teams of various charities, of all shapes and sizes. We exchange ideas and find out which DM methods are working for other charities and what good ideas are out there. If response rates in one medium are dropping for us, it’s good to find out if other charities are having the same issues or whether it’s just that our creative isn’t working.

There is another group that looks more at the digital side of things but that’s quite new. In both groups there’s an opportunity for a supplier or suppliers to come in, sell their wares and explain any new technology.

Paul Harris, marketing director, UKFast

Ninety per cent of our clients are SMEs. We know they are using a lot more web advertising. They may have been on page four of the Google search rankings a year ago and they would’ve been much less likely to pump money into pay per click. Now, appearing on page one or two of Google search has actually encouraged them to pump a lot more into the web [as Google rewards fast websites with better rankings].

There is a fairly shortsighted approach to non-measurable marketing. Part of the reason why people favour digital media is its measurability.

I’m a strong believer in a joined-up approach. I think that it definitely works. We know from our own activity that if we take press out, we see a dip [in people calling to enquire about our products]. If we put press back, even though you can’t directly attribute it, things go back up again. It all works together, and I think the more traditional media are as valid as they’ve ever been.

Wayne Brown, deputy managing director, Glue Isobar

Our strategy for acquiring new clients is based on word of mouth, which is driven by our profile. PR is where we make the most external investment. We make sure that our stuff is easy to find and we’ve got a big emphasis on ensuring that the content we produce is distributed across a number of channels.

Externally, we employ a PR agency that we use to extend our publicity footprint. We’re very good at talking to one or two titles, but we are looking to get into more mainstream media and break through into TV. Our PR agency helps us do that. There’s a strong correlation between the fact that we’ve invested in and got really good results PR-wise in the first six months of the year and the amount of inbound direct enquiries that have been brought about by no particular piece of activity.

Another investment for us is intermediary networks. These are third parties that act on behalf of clients and find suitable agencies for them. They’re a cross between a directory and a network. We join, post our profile and then when they’re putting together shortlists, they can put us forward for pitches.

We’ve just rebranded too. As a result of that, we will redevelop our website and integrate it more closely with the social activity that we’re already doing.

Readers' comments (3)

  • An excellent well balanced and positive article.

    It’s really encouraging to see that the SME sector is seeking to take advantage of a range of communication channels.
    We do, of course, live in a truly integrated world of marketing and it is those organisations that embrace this that are likely to succeed in a post recession environment.

    Here at ONEPOST we work with a range of Customers – small, medium and large corporates – and we’ve certainly detected an uplift for Direct Mail, especially as part of a well targeted campaign. As Paul Seabrook says “… it is more expensive to use than digital channels, but you are likely to achieve greater stand-out than e-mail because fewer people are using DM.”

    Makes you wonder if Direct Mail will become more of a niche offering, where less is more, doesn’t it?

    Luan Wise
    Marketing Manager, ONEPOST

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  • I guess as an update we wanted to say that this is an excellent time for small businesses to get their marketing head on and start to manoeuvre themselves for the recovery.

    We have seen these types of businesses from all sectors start to look at their collateral to see if it’s fit for purpose, but also to request copy and content for literature, sales letters, web sites etc.

    We are surprised that many more businesses aren’t taking advantage of the economies of scale and cost effectiveness that digital offers, but sure it’s just a matter of time.

    If they do little else right now, we advise all small businesses that we come into contact with to take a fresh look at what will work for them when the economy improves and to start to get their ducks in a row; that way they should be in a better position when it comes to making the push later down the line.
    The window of opportunity for taking advantage over their competitors is small.

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  • Thanks for a great article. We're also finding that our SME clients are taking digital marketing much more seriously. We're getting more involved in content development and content optimisation for clients across all of their digital channels.

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