With everything 2020 threw at us, small businesses can apply those lessons to their marketing strategy in 2021.
Although business as a whole suffered in 2020, no one felt the pinch more than the startup community, which lacks the well-lined purses and substantial credit lines that established corporations can rely on in times of economic uncertainty. The pandemic has had a much deeper impact on small and midsize businesses (SMBs), on the supply as well as the demand side.
On the supply side, increased public health restrictions have led to vast labor shortages and reduced worker capacity, while the flow of goods has been severely disrupted by supply chain shocks. On the demand side, the sudden loss of demand due to social distancing and government lockdowns has increased liquidity shortages for already-vulnerable SMBs, resulting in mass layoffs and reduced consumer confidence.
Though public release of the COVID-19 vaccines is around the corner, entrepreneurs are not out of the woods yet, since the logistical limitations of distributing vaccines, combined with public apprehension about taking them, are likely to prolong the ongoing uncertainty well into 2021.
So how can SMBs overcome the challenges of marketing in the current crisis and prepare for a stronger start this year? Here are some key strategies to market your startup effectively in 2021.
1. Don't immediately chop your marketing budget.
Although many say that advertising is the first expense to go in a crisis, resist the urge to immediately take a sledgehammer to your marketing budget. Cutting your ad spend is likely to offer a short-term boost to your bottom line that will have harmful effects in the long term.
According to research from Adweek, companies that cut their ad spend during a recession typically observed a reduction in sales and income of 20% to 30% over the next two years as a result.
Cutting your ad spend affects other aspects of your business in addition to sales. For example, without advertising support, it becomes more challenging to maintain distribution, which increases the temptation to cut your prices. The ensuing lower margins, combined with reduced sales, can be fatal to your business, especially if you are not alive on marketing channels.
2. Be smarter with your marketing spend.
Instead of cutting your marketing costs, consider how you can do more with less. Although you may not have the budget to market aggressively in the new year, analyze your marketing channels to identify those with a positive return on interest. Allocate the bulk of your marketing resources to these top-performing channels and cut out the underperforming ones instead of going cold turkey on marketing.
Another option for startups with little to no marketing budget is to partner with a noncompeting company in a complementary product category to share the cost of advertising to a similar audience segment. Check out this example of a successful brand partnership between Jars by Dani, a homegrown New York City dessert maker, and Talenti Gelato. A similar partnership with a startup in your same boat may be a win-win situation. [Read related article: 3 Steps to a Successful Small Business Partnership]
3. Focus on creating value for customers.
It's a well-known marketing adage that keeping an old customer is cheaper than acquiring a new one. In the time of COVID-19, though, startups have learned the hard way that customer loyalty is severely tested when money is tight.
In 2021, focus on building long-term customer value. The first step is listening and learning from your customers – not just as a one-time activity, but as a continuous feedback process that is well integrated with your marketing strategy. Use this feedback to create value for your existing customers. Value does not necessarily have to be in the form of discounts and promotions; rather, focus on making your customers' lives easier.
Canva's Design School is a great example of how this can be done. By providing valuable learning resources to customers on how to use the platform and hone their design skills, Canva was able to boost its user growth during 2020, leading to an increased company valuation.
4. Automate your marketing process.
The business mantra of 2020 was to "embrace digital transformation," but what does this mean for SMBs? In a nutshell, the best way for SMBs to leverage digital tools is to automate marketing processes.
Not all SMBs have extensive marketing teams to roll out campaigns at the drop of a hat or analyze vast amounts of customer data. And with customer journeys being as fluid as they are, with countless touchpoints both digital and traditional, marketing automation is the quickest way to calculate your marketing ROI and reallocate resources to your top-performing campaigns.
According to Salesforce, around 67% of companies already use some form of marketing automation. Your investment in an automated solution will help to relieve you of the effort of actively marketing, while still enabling you to access data that can inform your strategic decisions going forward. [For tips on choosing your solution, check out Business News Daily's Marketing Automation Buying Guide.]
5. Keep the content coming.
Let go of the myth that it is prohibitively expensive to develop new marketing content for your business. Content marketing is a must, and it doesn't have to break the bank. There are plenty of tools out there to help you create quality content at a fraction of the cost of hiring a professional agency.
Instagram Stories, for example, have been particularly effective for small businesses during the pandemic. Instagram has a host of new features such as polls, location tags, shopping, and GIFs to help make your content engaging and targeted to your audience, and all you need is a smartphone to get started!
Another way to save money is to repurpose old content. Consider turning your old blog post into a video or a carousel image on Facebook. Make a video into a slideshow. Repost content from one social channel on another one. The options for repurposing content are endless.
Most importantly, when producing content, don't be afraid that your marketing efforts will appear low-budget and poor-quality compared to larger brands' content. Even the biggest brands out there use social media and similar content channels to promote themselves while maintaining engagement, so give yourself a chance by constantly putting out new content.
6. Get your business online.
It cannot be said enough – if you're not already online, the time is now. SMBs and large businesses alike have faced various operational and logistical issues throughout the pandemic, resulting in financial losses and long periods of inactivity while stores remain closed. Since the uncertainty is unlikely to end anytime soon, you need to embrace new channels to reach customers and maintain some business continuity.
Examples abound of startups that have found creative ways to sustain themselves online during the pandemic, and your customers expect no different from you. With the number of tools and channels available to support small businesses today, you are actively harming yourself by not finding a way to keep business going online.
The simplest way is to build a website. This can be an online store if you sell products, or you could offer virtual consultations or sessions if you are a service-based business. Easy website builders like Wix and Shopify can help you with the latter, while video conferencing services like Zoom, Microsoft Teams, and even Instagram Live can help you with the latter.
Apart from allowing you to maintain your earnings, digital channels can help you learn more about your customers and their preferences. By setting up a digital presence and monitoring how people shop online, you can gain valuable insights that will allow you to improve your sales funnel, and possibly even implement these lessons in your physical store once the lockdowns are lifted.
7. Be authentic and personal in your messaging.
Authenticity is the key to connection with customers, especially when times are tough. Instead of depending on discounts and promotional offers to attract customers, focus on building a strong emotional bond with your audience. This is especially poignant in the case of small businesses that have been serving customers in their communities for a long time.
Although a lot of companies are trying to appeal to human empathy these days, it's very easy for customers to discern authenticity from PR. Customers who support your business want to hear your story and what you have to say, and see the face behind the brand. Being active and visible on social media and other channels helps to get your message seen and heard, which can go a long way in building true connections with your customers.
Though short-term measures to preserve liquidity are the most tempting, it is vital for SMBs to stay focused on the long term. An investment in building trust and emotional connections with your customers is likely to go a long way, helping you come out stronger in 2021.