To grow a business, you need customers. To acquire customers, you need to market. That’s the sticking point for most business owners.
Marketing costs money. Usually, quite a lot of it. And there’s no way to be sure that any given approach will work. Spend too much on the wrong thing, and the business is dead in the water before it hits on a viable path. Spend too little, and growth doesn’t happen.
The businesses that are able to grow have found ways to get the most bang for their buck.
It’s not about trying to spend less than competitors. It’s about spending wisely, knowing that not all channels and approaches yield the same results. And that a lot of the vanity metrics that do look impressive don’t feed the business.
The Budgeting Trap Most Businesses Fall Into
One of the mistakes many new business owners make when it comes to budgeting is to get interested in what the big guys do, and then try to replicate their efforts on a shoestring. Businesses like Coke or Apple can invest a lot into brand awareness campaigns with long lead times. Most small to medium sized businesses can’t.
And so they try to do a bit of everything.
They allocate a small budget to social media. They set up an SEO program. They dabble in content marketing. They do a little bit of everything—none of it gets enough of the budget to actually work, so nothing does. The business ends up bleeding money without gaining a single customer.
It’s better to choose a few channels and fund them properly than it is to spread yourself so thin that none of your efforts have a chance of succeeding. It takes guts to make those choices—but it’s also more effective in the long run than avoiding them in favor of mistake budgeting that seems ‘safer’.
Choosing Channels That Suit Budgeting Reality
Not all marketing channels are effective to the same degree in connection with the business’s actual budgeting reality. The effectiveness of expensive channels can be cancelled out by the basic reality of the actual budget. If it doesn’t fit, it doesn’t work. Many businesses find advertising with push ads a surprisingly fruitful channel because it’s not an expensive format, and they can get decent results from the outlay by using the format effectively to target consumers.
When choosing channels, it’s better to go with those that suit reality rather than wishful thinking on how businesses should spend their marketing budget.
Email marketing still wins hands down as one of the most effective channels for businesses—if they have a list. It costs almost nothing relative to what it can deliver over time.
Content marketing has a great return on investment. But it takes time or money; it won’t deliver instant results, which makes it ideal for businesses who have some time or runway to play with, but not for those who needed customers yesterday.
The Testing Framework That Avoids Wasting Marketing Spend
The best marketing tests aren’t arbitrary; they aren’t the marketing equivalent of throwing spaghetti at the wall and hoping something sticks. Testing also requires spending. This isn’t a budgeting mistake-solving approach that spends $100 on an ad buy and expects to derive useful insights from the results. Something like $500-1000 for a channel they might abandon after these kinds of outlays should provide enough signal to noise ratio to see if it’s viable.
What testing looks at also matters. Even channels that generate impressive clicks and impressions may not be as helpful as thinking of spending and results in terms of the eventual acquisition of customers.
Even channels that have high customer acquisition costs may deliver decent results if the right customers are acquired; if they convert well and become loyal, they are worth acquiring as customers.
Making Existing Customers Do More Work
The best approaches to marketing don’t focus on acquiring new customers at every turn; they also consider how existing customers can be incentivized to do more for the business. Getting existing customers to work harder for the business costs next to nothing in comparison with trying to acquire new customers all over again.
The customers know what they value about your service or product, and with the right incentives, they’ll tell other people on your behalf—assuming that they are designed with mutual benefit for the referrer and recipient in mind.
A token gift that your referrer would have bought for themselves is not going to drive referrals. In this case, think harder about how you can benefit both parties rather than just throwing in pocket change.
The time it takes for people to refer to other people can’t be replaced by pocket change, though. Marketing that encourages retention also works wonders for existing customers who can be kept engaged with the business between purchases through the use of emails, retargeting ads or even good old-fashioned outreach without spending too much in the process.
What Scales For Business Growth?
Looking for the one magic bullet channel for acquiring customers—at least from an acquisition perspective—will not get you far in achieving sustainable business growth.
The average successful business uses a mix of channels rather than looking for one holy grail that will deliver all its new customers. Multiple small channels can each deliver between 10-20% of a new customer total. Collectively, they can each be responsible for 100%. A diversified acquisition strategy protects businesses from the sole-channel syndrome that prevents them from scaling when anything goes wrong with a channel they rely on.
The businesses that grow without wasting their marketing budget understand that marketing is an investment instead of a cost. They analyze how much money they have to spend without wasting their budget, while ensuring that every expenditure delivers value not just in activity levels, but in generating actual customers. That careful, considered approach is often what makes this type of growth manageable—rather than messy failure.
