MoneySherpa’s Mark Coan outlines three SME marketing methods to super-scale your business in Ireland sustainably.
You are a successful SME owner, with great products and services and happy customers. Yet, that initial growth spurt has flatlined and you want to bring your product to more people.
Here are three proven SME marketing methods to build the scale you are seeking.
“If your unit acquisition cost pushes your variable cost over your price point, you are simply spending money to lose money faster. Never a good idea”
As someone who has scaled SME businesses from 100 to hundreds of thousands of customers multiple times, I’ve hit upon some proven SME marketing methods that will help your SME scale sustainably.
You’re not alone. More than two-thirds of Ireland’s workforce are employed in SMEs of less than 100 people, but with untapped potential to scale further.
1. Is there a gap in the market?
You have proven there is a gap in the market by getting to where you are today. There is a customer need for your service which you have been able to meet.
This is a priceless proof point. Most businesses don’t get that far and it’s a great platform to scale up.
The real question now is much more of a gap in the market is there? If you could remove the training wheels and take a look at it, how much market demand is there for what you can offer?
The good news getting a handle on this no longer requires expensive market research. In the age where every passing whim is typed directly into Google, all SMEs have access to an unbelievably rich seam of customer demand data.
Simply go to Google Trends or sign up to one of the online SEO tools. Some are free and all have free trials. Use it to see how many people in your town, county, country or world have Googled for services like your own last month.
I can’t stress enough how much of a game changer this is for SME marketing. This allows you to work out your potential demand in minutes, at zero cost, whilst you are still in your pajamas.
2. Is there a market in the gap?
So now you know. Hopefully you now have solid data showing untapped demand if you can only find the SME marketing method to reach it. This might involve, for example, going online to expand your geographical reach or pivoting your product to appeal to a different customer segment.
Whichever market gap Google has pointed you to, before hitting super-size you need to check one critical thing. Will I make any money in this gap?
To check this you just need to know two key things:
- The sweet spot price that maximises your revenue
- How low you can go on unit cost
Finding the sweet spot pricing
The sweet spot is the Goldilocks price point, not too high to drive volume away, but not too low to leave revenue on the table.
Don’t assume people will pay a premium over the market price for your product unless you have hard proof, it’s more likely you have lost revenue by over pricing. The more common mistake I see with SMEs is actually underpricing, not charging what the market is already primed to pay.
Being over or under priced can be fatal for scaling, pre-Google finding the right sweet spot used to be tricky, but again simply Googling competitors in your market will give you a great idea about the price the market will bear.
The important question for your business is how much profit will you make at that new price point. To know that you simply need to know how much headroom it gives you over your variable costs.
How low can you go?
Tracking and being on top of your unit variable cost gets a whole lot more critical at scale. The bigger the gap between it and your unit price the quicker you hit breakeven and the quicker your growth curve (as long as you don’t cut corners on quality).
So you need to level up on variable cost management to scale sustainably.
You probably have a good handle on your cost of goods (COGS) already, but a rookie mistake is not accounting properly for the Cost of Acquiring the Customer (CAC) in the total variable cost.
In my experience letting the CAC spiral out of control is the single biggest mistake made in SME marketing.
3. Can you market to that gap?
So great, you know there is a gap in the market and you also know you can be profitable in that gap.
But you also know this is only if you can keep your customer acquisition cost under a certain number. Take it from me, this is where it is really easy to get tempted by a shiny marketing and PR campaign that pumps the ego or worse carried away with phrases like “spend money to make money” ringing in your ears.
Remember, if your unit acquisition cost pushes your variable cost over your price point, you are simply spending money to lose money faster. Never a good idea.
The good news is that there are lots of ways to acquire customers at a sustainable cost. Smart digital marketing using content, Adwords and Facebook ads combined with digital conversion tools such as automated emails can halve your customer acquisition costs over traditional methods and work really well for SMEs.
In a nutshell …
Scaling using SME marketing isn’t as hard as you think. With these 3 tactics you can level up your SME marketing skills and scale up your SME sustainably.
- Tactic 1: Size the gap in the market by using free SEO tools
- Tactic 2: Assess the market in the gap by using simple unit profit calculations
- Tactic 3: Market to the gap using straightforward low cost digital marketing
Founder of Moneysherpa.ie, Mark Coan heads a team of experienced finance and technology experts, helping consumers make smarter personal finance choices. Prior to founding Moneysherpa, Coan founded the business consultancy firm Bothworlds and led the growth teams at Virginmedia, Permanent TSB and Independent News & Media