There may be few certainties in life, but when it comes to the world of marketing, there are many hard truths as to why it can be so difficult to go from a small business to a large business.
Some of these issues are just a byproduct of how our economy works, while others have much more to do with human behavioral psychology and the sometimes mysterious way our brains work.
During my career, I have worked for some very large companies. I've also started my own fairly small business, so I've encountered these laws of marketing from both sides. So, what's holding small businesses back, and how can you “hack” the system if you're a small business looking to get bigger?
The problem of familiarity
The first and most important obstacle for small businesses is the human mind. We are programmed to pay attention to what is familiar, essentially preparing us to only notice things we already know. People who shop don't “see” unfamiliar brands in the same way they notice big brands, even when they're right in front of them. In this way, marketing from those big brands works more effectively than that from more obscure brands.
I experienced this myself at a conference we sponsored. Our logo was plastered in front of delegates all day, but when I asked an audience member over coffee if they'd ever heard of us, I received a rather empty 'no'.
So, while marketing from small brands needs to work harder to get noticed, those that are big and well-known constantly grab little slices of attention every time we see them, making them more familiar. There's a reason people still drink Coke.
Fear of getting it wrong
What further exacerbates the problem of interest is the issue of trust. We are emotional creatures, and there is no stronger emotion than the fear of failure or embarrassment. When it comes to larger, more expensive purchases — like those we see in the B2B space — the fear of making the wrong decision far outweighs the potential benefits being marketed to us.
The result is a tendency to buy from companies we consider “proven,” which tend to be — you guessed it — larger brands. The code for “proven” is often “I've heard of them.” Skimping on these tried-and-true brands (in theory) helps relieve us of a sense of personal responsibility if things go pear-shaped, after all, we bought from a brand that everyone knows can be trusted, so it's not our fault It didn't work out, right? like that?
This is a key point, especially in B2B marketing, as it's not just the brands the buyer knows, but the brands their boss knows as well, which provides more reason to play it safe and makes displacing familiar brands more difficult.
Economic scale
Not only do larger companies have a marketing advantage over small businesses in terms of customer psychology, but they also have budget efficiency on their part. There are thousands of ways in which large companies benefit from economies of scale. I recently attended an expo full of large companies. They attended a much larger number of their customers, which enabled them to purchase a larger booth, and enabled them to benefit from better placement, visibility, etc. This happens in multiple scenarios in B2B marketing of course, but also on the consumer side as well. Bigger brands can afford the most visible advertising space and displays, and this feeds into our original cause of interest and familiarity.
Likewise, large companies benefit from the workforce. Great marketing is hard work and requires careful attention to many small details. If you get any of these things wrong, it can be a devastating waste of money. In the SMB world, it's entirely possible to not have a dedicated marketing team with endless resources and deep pockets, making it difficult to put this detailed work into each campaign.
Double jeopardy
Finally we come to the law of double jeopardy. This is especially bad for small businesses. Not only does a small business have fewer customers, she says, but those customers are less loyal than customers of larger companies.
The concept of ammunition buying dictates that bigger brands get more customers and more revenue available from those customers to boot. Unfair, isn't it? This is closely related to the first point but converted to hard numbers.
Marketing as a small business not only has to work harder to attract the average consumer and actually convert them into a paying customer – it also has to work harder than larger brands to keep them coming back.
Why small is beautiful
Given the huge obstacles that seem to keep the little guy down, should small brands just give up and give up? The answer, of course, is no.
First of all, there is absolutely nothing wrong with being small. You can target a specific market or customer type and become known to those people. You simply may not be aiming to go “big.” Niche marketing works well. Become popular with a few.
As a small business, you also have a big weapon at your side – creativity. You can break the rules and attract attention in ways that marketers at big companies might be wary of doing. Being young gives you no excuse to be boring when it comes to marketing. Say something different. Be surprised. And do it in a new way. Small businesses are not usually run by committees, so it's better to be a little braver and take more risks on a great marketing idea. Creativity buys you attention. Whether from customers, the press, or these days, on social media.
Small businesses are also in a great position to take their small, great brand and connect it to a larger business that allows you to get that far. Larger companies often use smaller companies to add value and differentiate themselves from others – a win-win scenario.
Being smaller can in principle bring you much closer to your customers and allow you to understand them much better than a huge multinational company. Find new and engaging ways to reach them and better meet their needs. This is the core skill of marketing, and small businesses are often inherently closer to their customers to achieve this.
Keep save
It may seem like the odds are stacked against you as a small business, and although in many respects they are, small businesses are in a unique position to do things differently and make a real impact in their marketing.
As a small business, persistence is key. Most big companies expect marketing to work very quickly. If you are a small business owner, you may be willing to spend a significant amount of time working and growing one step at a time. Your patience, in the end, can be your point of difference.
Whatever you do, follow the golden rules: be consistent, be different, and know your customer. Someone has to be tomorrow's big company, right?
