Marketing problems for SME's: A system issue

Marketing struggles within Smaller and Medium sized businesses is a common theme. From confusion around strategy, a constant revolving door of marketing staff, a confusion around what to spend, and activity that barely moves the needle in terms of actual sales & profit.

Yes, Marketing activity exists, but nobody is really convinced it’s driving growth. Not even the Marketing Manager.

Here what the typical marketing function looks like in an SME:

• A marketing manager who is always busy but overwhelmed. The data in this research by MarketingWeek, with nearly 60% of marketers overwhelmed and undervalued in their roles.
  

• Agencies producing activity without clear commercial impact. The agency trap, with SME's usually handed over to junior agency staff as they can't spend as much as larger brands.

• Sales questioning the value marketing is adding. A pipeline that is slowing and unpredictable with conversions increasingly difficult.
  

• Growth ambitions that marketing doesn’t seem equipped to support. Failure to execute with the right quality and quantity can cause the best strategy to fail.
  

• A strange feeling that £35-55K in wages and a marketing spend of £150 - 200k is not enough to grow and also at the same time not value for money. What is the real cost of hiring a marketer?

None of these situations appear overnight. They tend to develop gradually as marketing evolves without the structure needed to support the business’s goals. The default is simply fire fighting. And SMEs get stuck in a vicious cycle to try and fix this problem. Seesawing between hiring junior and senior marketers to try and get the desired output, quality and cost balance within this system.

Paying agencies to fix issues without looking at the core problems. Research by Constant Contact featured in a Marketingprofs article, highlights results from SME business owners on the top marketing challenges for SME's.

What are the main marketing problems for SMEs (according to small & mid sized business owners)

Business owners highlighted 8 key challenges for SME in marketing. With some overlap between the problems and common issues that cause the problem. 1) Finding new customers; Is the biggest challenge according to business owners. Which isn't surprising but a number of other problems feed into this. 2) Determining whats working / Measuring performance; Businesses don't know what marketing activity is working and delivering results and they struggle to accurately measure this.

3) Lack of Resources; This could be staff, spend and tools or a combination of these elements which are all restricted at SMEs. 4) Retaining current customers; Is this a problem where there is a mismatch between marketing and product? With a hyper focus on 1 of the 4 P's of marketing (promotion) product & price get neglected from marketers. 5) Creating a strategy / plan; Only 1 in 4 marketers in the UK have a formal qualification, creating a genuine marketing strategy that works is difficult for marketers. 6) Sending the right messages; This could be a problem with understanding the product and the customer or a mixture of both of these factors - which creates a messaging problem.

7) Using multiple platforms; Platforms that help execute and measure marketing can be expensive and are something SME's avoid. Platforms could also be multiple channels which SMBs struggle to manage (with less resource).

8) Motivation; This reflects busy business owners not marketers, SMB owners with no internal marketers, who take it on themselves would struggle with motivation and consistency.

Why the system is root cause for SME marketing? The reason SMEs have failed to find a robust solution to the Marketing problems highlighted in the research is the 'system' itself. It's a striped out version of something that works really well within larger businesses. Lead by an experienced marketing leader at the top, and an internal team of at least 6 - 20 professionals. Supported by a snazzy agency. This system is designed around the Marketing workflow which starts from analysis and strategy, goes through consistent execution and implementation, and finally measurement and reporting. Delivering true multi-channel marketing.

This modern marketing workflow doesn't change much based on the size of your business, it becomes slightly smaller and more condensed.

In medium-sized and small businesses this workflow lands on a one or two person team, with limited support from an agency - that specialises often on only one channel. Add to that the sheer number of marketing channels, the system collapses. Internally, this system directly contributes to over half of the key issues highlighted in the report with a few key themes; Lack of time, Lack of expertise, Lack of resource (spend & tools). 33% - Determining whats working: Lack of experience and time contributes to a failure in assessing performance and marketing results. What is a good result for your industry? Has the agency produced something valuable? Time challenges and deadline pressure often causes your marketer to skip putting in proper marketing measurement features. 32% - Lack of resources: This is a self explanatory and direct consequence, the single hire marketer doesn't give enough capacity to execute modern marketing with all its channels. Executing across different channels also requires expertise and often tools that support better delivery. 25% - Creating a strategy: Business owners realise the importance of it, many agencies and marketers 'pretend' to be strategic. Less than 1 in 4 Marketers in the UK have formal training in marketing, which means knowledge around a proper marketing strategy that works is lacking. 24% - Using multiple platforms: Marketing is multi-channel and multi-platform. From creating material, to distributing it across channels and measurement. SME can't afford or justify spending on all of these platforms. Secondly again the capacity restriction of a small team means reducing the number of channels you can consistently show up on and picking and choosing. All of these combine to create a system that becomes undeliverable. This is part of the reason why business owners and marketers both often find that marketing is barely moving the needle and costing too much. A poor marketing system will fails to get you more customers. What is the solution for SMEs looking for better marketing?

The solution is to look outside this current system of the single marketing hire and going for something better suited for SMEs. There are a number of options that are proven to be successful, but they're not considered 'mainstream' which means they get overlooked, and are not even considered.

The default seems to be to hire in house or an agency, often the decision is driven by cost and what the business can afford or commit towards marketing. Here are 3 alternative marketing options for SMEs. 1) Fractional Marketing Leaders: Fractional Marketers are experienced, senior marketers that work a couple of days a week or month, between multiple businesses. This is great as it gets you access to proper expertise for a lower price. They can often provide strategic guidance and accountability without the cost. 2) Freelancers Marketing Freelancers often work for multiple businesses and are a cheaper option to execute . This is great as it gets you access to proper expertise for a lower price. They can often provide strategic guidance and accountability without the cost. 3) Managed Marketing providers Using Managed Marketing providers like OutpostX Marketing can help with strategic knowledge, and more capacity to execute across channels. By either augementing your internal marketing manager or outsourcing strategy and execution. All of these options provide help tackle the challenges in Marketing faced by SME's with more flexible resource, better cost balance, improved speed and proper strategic guidance. Some or all of the above are missing in existing models.