Why do small businesses struggle with digital marketing?

You could have the greatest startup idea in the world, but it’s not enough to grow without the right marketing strategy. According to IBM Institute for Business Value, 80% of small businesses in India fail within the first five years.

Most small businesses fail at digital marketing because either they do not understand its importance or they make mistakes while implementing marketing strategies across various channels.

Large enterprises spend around 9.1% of their budgets on marketing, but it’s a different ballgame for small businesses, as per a Gartner report. The path to success for SMBs lies in achieving rapid growth to demonstrate their viability.

One of the key factors in small business failure is the recognition that the company is failing to grow quickly. This recognition creates a downward spiral where investors cut their losses, leaving small businesses in a situation where they can no longer pay their bills—even if there is a reasonable demand for the product or service.

This is perhaps why small businesses spend a large amount of their resources on marketing and sales in order to break out of the high-risk phase. The writing is on the wall: marketing, when done right, can help SMBs reap rewards and modern marketing begins with the digital. However, it would benefit small businesses owners to recognise common pitfalls and craft strategies to overcome them. Here’s how. 

Target audience and empathy

When small businesses embark on a digital marketing journey, they often do so without fully understanding their target audience. In the age of digital marketing, target demographic groups based on age, gender, location, interests and which websites they visit are a piece of cake to analyse customer preferences.

SMBs need more than just the basics, though. They also need a deeper understanding of how their key target audiences use the web. There will always be debates within the digital marketing industry about which tactics and channels are the most effective.

However, the trust lies with the target audience, not tried and tested marketing strategies. Most customers on social media are already part of online communities like social media groups, where they discuss various products or services being offered, to compare and contrast.

Perhaps they are made up of customers who are using specific keywords late at night to find a product or service like yours. Such behavioural information is invaluable to small businesses, as it broadens the demographic understanding and will form the basis of the most effective digital marketing strategy for any small business.

It benefits SMBs to conduct thorough market research to understand target customers, preferences, and behaviours. Using tools like Google Analytics, social media insights, and customer surveys is a great place to start creating detailed buyer personas that guide marketing efforts.

Don’t broadcast, engage

While having an online presence is indispensable to modern digital businesses, merely posting content is not enough to qualify as effective digital marketing. According to the 2023 B2B Content Marketing Report by the Content Marketing Institute and MarketingProfs, one of the key challenges faced by B2B marketers is creating content that resonates with their audience. Specifically, 57% of B2B marketers cite creating the right content for their audience as a significant challenge.

Engaging with your audience is crucial for building relationships and fostering loyalty. Most small businesses wait for the perfect website, the perfect social media ad, or simply wait to get their ducks in a row before they begin having conversations with customers on digital channels.

However, for SMBs that need to grow quickly, this approach isn’t enough. Small businesses must view digital marketing as an opportunity to engage with people (potential customers), who can help them fine tune all aspects of the business. SMBs can use digital marketing to start conversations and gather feedback on how the business can improve and evolve.

It isn’t enough to broadcast ads and expect results. It’s brands that engage with customers and build an online community that thrive. SMBs can start by actively engaging with customers on digital platforms, responding to comments and messages promptly, participating in conversations, and using social media analysis tools to monitor brand mentions.

Interactive content is the path to success because, when customers are engaged, a business has already solved two of the four steps in the marketing funnel.

Take a data-driven approach to digital marketing

Nearly 60% SMBs lack a pertinent digital marketing strategy and are not able to effectively monitor progress of their campaigns, making it difficult to understand what works and what doesn’t. This can lead to wasted or mismanaged resources and, more importantly, missed opportunities to connect and engage with customers.

There’s no end to the data that can be collected using the right tools, like Google Analytics, social media analytics, or even specialised martech applications. SMBs with the bandwidth, will certainly benefit from engaging a good digital marketing agency that can perform the analysis and crunch the numbers that are important for growth.

It is also important for SMBs to track the performance of digital marketing campaigns, review metrics such as website traffic, conversion rates, and social media engagement regularly. Using this data to make informed decisions can solve a vast number of problems for SMBs.

Consistency is king

Consistency is key in digital marketing. Most small businesses fail to understand the importance of being consistent in posting content on digital marketing channels. Irregular posting, sporadic campaigns, and inconsistent messaging can confuse potential and existing customers, and weaken the brand’s presence.

SMBs must develop a content calendar to plan and schedule marketing activities. It ensures that the messaging is consistent across all channels and aligns with the brand’s voice and values. Consistency builds trust and recognition among customers.

Digital marketing holds immense potential for small businesses. It requires careful planning, execution, and flexible optimisation. Understanding common pitfalls in digital marketing can help SMBs improve their efforts, reach their target audience more effectively, and ultimately achieve their business goals.

Vishal Rajani, founder and chief executive officer, Synergos