An article written for the Chartered Institute of Marketing’s Small Business Group Newsletter
Small companies have to create products and services that fit the market and go on to build a sustainable customer base.
Owner managers are often characterised as having a bias for action over planning and confusing sales with marketing. Partly that’s because they’re too busy creating and keeping customers (sorry – isn’t that the definition of marketing?) to do much strategic planning and partly because much of the advice they get is over complicated.
What they do is develop informal methods of achieving the same results as corporate marketers. Instead of formal market research they talk to their customers. Instead of segmenting the market they set their stall out on a broad front and evolve and develop their product offerings by following the money. Instead of planning their business process up-front they develop them to suit the customers they have.
They are naturally customer centric in a way that their corporate colleagues are not. They might look at the 8 Ps of marketing and think “where’s the P for Punter?”
What they do need is more system in generating leads. They need to analyse how many customers buying what range of products would deliver the revenue they need for sustainable growth and what communication processes they need to keep their existing customers.
It means working out how many sales they need, how many prospects they need to close to make those sales, how many enquiries they need to build the prospect bank and how much promotional activity of what type they need for these enquiries.
Developing simple and robust systems is the key to growth for SMEs. Advisers can add a lot of value to small businesses by helping them learn to systematise these processes of communication, closing and follow up – but we need to put the Punter back squarely into the centre of our attention the way the small business does.