5 Reasons to Spend Your Financing on Small Business Advertising
Whether you know it or not, you have at least two core businesses. First, is the business of what you do—maybe you run a retail store, or you own a salon. Second, is the business of getting business. And it’s the second one that most small businesses owners fail at. That’s why we’re strong believers in advertising for small business.
If you’re not sure formulating business advertising ideas is worth the time or money, we’ve got five reasons to convince you otherwise.
Advertising for Small Business is Affordable
In the old days, you had to buy space for your ad in a magazine or newspaper. You could get on the radio or TV, but that was even more expensive. And even if you did that, it wasn’t particularly easy for interested customers to get in contact with you.
Online ads like Google AdWords have revolutionized small business advertising, making it cheaper and easier for small businesses to execute. It’s called PPC advertising, or pay-per-click, so you only pay when someone clicks on your ad.
A study on the averages of cost-per-acquisition (CPA), a measure which shows how much it costs to obtain a customer with PPC, put the average CPA at $51.74 for finance and insurance, $41.14 for real estate, and $63.57 for B2B.
The cost varies by industry, but when you figure out the lifetime value of your customers, it becomes quite easy to see whether paid search advertising is worth it. Plus, you can test it out with very little risk. Google AdWords gives you the flexibility to run campaigns on budgets as little as $50.
The Return on Investment Grows over Time
Building on the Google AdWords example: a huge benefit of this new age of small business advertising is the ability to track performance. There are all sorts of programs, Google Analytics being the standard, that compile more data than you could ever want detailing how your customers behave.
That means, as you advertise more and more, you get better and better. Every business and its customer base have nuances. The more you learn about those nuances, the better you’ll get at turning your insights into revenue.
To give you an idea of how that works, we’ll use an example. Let’s say you own an Italian restaurant in Chicago and you’re running a Google AdWords campaign. The way you set the campaign up, you bid $5 every time someone searches for “Italian restaurant in Chicago.” For illustrative purposes, let’s say your ad shows up every time someone in Chicago makes this search.
After a month of this, you look at your analytics and realize that the people who made the search within 5 miles of your restaurant almost always came in. What’s more, you find out that the people who made the search outside of a 10-mile radius almost never visited your restaurant.
Now you can adjust your bidding strategy so you spend more on the searchers within a 5-mile radius and less for the searchers outside the 10-mile radius. Bottom line, you get lower costs and more customers.
Build your Brand
Ray Kroc took McDonald’s from a single store to a multi-billion-dollar corporation. And a lot of that had to do with how he built the brand, particularly, the symbol of the Golden Arches.
The Golden Arches became a symbol of McDonald’s promise to customers. They could come in, order a burger, and be out in minutes. Or, they could sit down and enjoy clean facilities and friendly service. Once a customer saw the Golden Arches, they knew they’d be taken care of. They didn’t scrutinize the staff or their food because the symbol of the arches became synonymous with McDonald’s service.
It’s human nature to trust the things we’re familiar with. Building a familiarity with your brand should never be undervalued.
Advertising Boosts Word of Mouth
You may find yourself wondering why you should spend money on business advertising ideas when your products or services are so good it already generates buzz on its own. That’s fair enough, and if you do good work, you will get plenty of free advertising. But why stop at word of mouth? Why not keep pushing and growing?
Good advertising will increase that word of mouth into exponential growth and even more free advertising. When you build enough of a presence and reputation, you’ll earn high spots on popular review sites where people can read about your customers’ great experiences. In addition, you might even get featured by a local media outlet. Think of your advertising not as a replacement to word of mouth, but as an extra boost.
It’s What Successful Businesses Do
You might not have the budget to reach the advertising heights of the big companies, but that shouldn’t stop you from doing a scaled down version. In 2014, the top 200 advertisers in the U.S. spent $137.8 billion in advertising. Do you think they’d be spending that kind of cash consistently if they weren’t seeing real returns on their investment?
Small business advertising is an exciting field with many opportunities for increased efficiency in building your customer base. The more innovative you are, the more affordable and effective you can be with your advertising, so give it a try.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.