As we near the end of 2021, the discussion about the COVID-19 pandemic is waning – which means business is finally getting back to normal, right?
Not so fast.
Although we can all agree that 2020 was a detrimental year for business owners and consumers alike, adapting to a post-pandemic business landscape in 2021 has proven to be even more challenging for some. In fact, according to Neilsen’s Annual Marketing Report, 88% of the country’s small businesses have not yet returned to pre-crisis levels.
It may be years before the economy gets back to some level of “normal,” but what can businesses do in the meantime to encourage growth and reinvest in their success?
Back to Basics
Marketing is critical for businesses of all sizes to raise awareness, sell goods and services, and compete in their industries. Yet, despite the wealth of data available to show how critical marketing is to fostering growth, marketing budgets are typically the first thing to be cut when money gets tight – even before the onset of the pandemic.
But why? According to Nielsen’s report, one contributing factor could be that less than 20% of marketers feel confident in their ability to measure their ROI – leading them to pull back marketing investments, setting themselves up for potential long-term ramifications.
As we prepare to venture into 2022, it’s time for businesses to get back to the basics of marketing – which means looking at data and leveraging it to develop new strategies to start competing once again.
Think Like a Consumer
As important as data is to build a strategy, consumer behavior plays an equally important role.
Consumers use digital channels for far more than just making purchases. They use it to socialize, share opinions, research, and an abundance of other behaviors – all of which play a part in the buyer journey. Pulling marketing can reduce a brand’s top-of-mind awareness for those consumers and lead to long-term revenue declines.
What does that data say? According to Nielsen, businesses that pulled marketing in 2020 have seen an average revenue decrease of 11% in 2021. These cuts not only affect growth in new business, but they also contribute to waning consumer loyalty and higher attrition rates – which is often even more costly than dips in new business.
Though large companies may not see a significant dent in revenue on the heels of those high attrition rates, small businesses must place retention at the top of their priority lists, as retention increases a customer’s lifetime value. The probability of selling to an existing customer is about 40% more likely than converting a new customer, which comes with a probability of less than 20%.
Where To Focus Marketing Dollars Right Now
In a time where every dollar counts, digital advertising is one of the most cost-effective marketing mediums a business can add to its toolkit. In the next 12 months, marketers are expected to increase spending on digital platforms, with the highest anticipated increases occurring on social media and search engine marketing.
As we’ve already mentioned, consumers spend more time on digital platforms to look for new products and services and rely on content to tell them which products they should purchase. However, that’s only one reason businesses should make digital marketing a priority.
Whether a business needs to engage and retain existing customers, raise brand awareness, or generate new business leads, there is a digital solution out there ready to be deployed. What’s more, major digital platforms marketing analytics are chock-full of critical marketing behavior data that can help even the most novice marketers develop an effective marketing strategy to spark much-needed growth.
Where to Start
As a small business, LSM understands that it is critical to practice what we preach. This year, we’ve been able to help our clients refocus their marketing efforts and generate positive results while also reinvesting in ourselves with new services and a brand new podcast. It is possible to grow and thrive – even now.
Not sure where to start? We’re here to help. Let’s get to work.