The world of marketing is dominated by the big brands, with the big budgets and the glamorous careers. There appears to be an assumption that small businesses should use essentially the same marketing ‘rules’ as bigger brands, only on a smaller scale. The notion is that small brands are much like big companies, except that small brands have lower sales, fewer assets, and fewer staff.
The usual definition of a small- and medium-sized business (SME) is a one with fewer than 250 employees. Official UK government statistics say this is over 99% of all businesses. The numbers are the same in the rest of Europe and the US. Even accounting for anomalies, the fact is big brands are small fry when it comes to the actual number of businesses out there.
So, where do the tiny brands with even tinier budgets fit in? Big brands get the columns inches, the books and the case studies. But has all the talk of big brands closed our minds to the reality of the tiny brands with even tinier budgets?
Perhaps it is not surprising. Reliable research on big brands has a lot more objective data to fall back on. The size of a small brand creates a special condition referred to in the literature as ‘resource poverty’: lack of cash, lack of time, lack of staff, pretty much lack of everything!.
Of course, small brands have many of the same challenges as large brands: competitor activity, ecommerce, innovation and marketing spend. But the discipline of growing an SME is based on entrepreneurship and sales, not marketing strategy per se.
Indeed, in SMEs, the marketing discussion tends to be around communications spend, not strategy – or just doing what it takes to survive.
The growth stages of an SME
One way of thinking about the SME brand challenge is in terms of growth stages.
Harvard Business Review points out that small and growing brands have five stages of development: mere existence – just getting customers is challenge; survival – a workable business model, but with questions over cash; success – traction in the market with proven, profitable business model; take-off – concerned with how to make the firm grow rapidly; and maturity – the advantages of size, financial resources and management.
Yet all the books and articles on marketing appears to be about brands at the maturity stage. But is there a coherent blueprint for small brands, or has marketing given up on small businesses and small brands?
This has been on my mind for a while now. I’ve worked with 160-year-old brands with tens of thousands of employees, and I’ve worked with startups. I’ve had £20m marketing budgets, and I’ve had less than zero.
Smaller brands have unique features and challenges, which are totally different to big brands.
Today, I have my own skin in the game, having invested my own cold hard cash in an orthodox, everyday small business which runs itself, while keeping my own ‘day job’.small
The funny thing is that at the more sexy end of the SME spectrum, startups have a clearly defined roadmap, tools, checklists, technology and advice. Startups no longer have to invent the wheel every time time a new business is launched. There is even a word for it: ‘scaleup’.
However, even the startup world poses a trap. Startup founders often read blog posts and advice from Silicon Valley-based companies and believe it uniformly applies to them. For those of you not paying attention, the US, and, in particular Silicon Valley, is not like the rest of the world.
Survival is key for small brands
The major goal for a small brands is survival. The notion of brand building versus sales activation has no chance. Activation dominates, direct response matters.
All a small business should care about is encouraging consumers to ‘buy now’. And, yes, I am a hypocrite, given my career with big brands and knowledge of how brands grow.
However, even Professor Byron Sharp supports me on this topic: “Many small businesses are more worried about whether they will be still be in business next year,” he says.
Yes, I know it is important to think through Les Binet and Peter Field’s advice on the 60/40 split between brand and activation spend. Yes, brand building is ultimately more effective because the effects last longer and accumulate over time. Yes, we should stop doing short-term promotions and direct response campaigns as this is better for long-term growth.
However, try thinking through all that when you’re trying to make payroll.
Let’s admit it: smaller brands have unique features and challenges, which are totally different to big brands.
Every brand, every category and every customer is different. Every brand has its own attributes, its own strengths, its own weakness, its own competitor set and its own distribution challenges. And, every brand has only a certain amount of cash in the bank. When it’s your cash, the world of brands suddenly becomes a different place.
What guidance is there for the real world of small brands? Back to Byron Sharp: “A lot of small businesses think a large chunk of their job is to tell the world why they should buy from them. But the biggest battle for small businesses, especially those starting out, is that people don’t know who you are and they don’t know how to buy from you.”
His recommendation is that small brands should focus on being better known, and that small businesses fail to grow because they aren’t single-minded on this. “They’re much more about thinking about convincing a few people, rather than reaching many and doing it over and over and over,” he says.
Sounds like as a good place to start for any small brand.