As a small business owner, do you sometimes find marketing to be overwhelming? Do you often question the wisdom of investing capital in approaches that are hard to track and whose results are hard to nail down? More importantly, have you relegated your marketing strategies to nothing more than periodically updating your catalog and brochures, attending a couple of trade-shows and conferences every now and then, and hoping that a onetime revamping of your website will suffice? If you’ve answered yes to these aforementioned questions then perhaps it’s time to understand inbound marketing vs. outbound marketing.
The Inbound Versus Outbound Marketing Argument
For decades it seemed as if marketing would forever be dominated by the large corporation, ones with vast marketing resources and the manpower to dominate markets by segmenting their customer base into their likes, dislikes, their ages, their gender, ethnicity, education levels and marital statuses. These corporations had the ability to manage their market in ways their smaller competitors couldn’t. It allowed them to time their product introductions to near perfection. Small businesses lacked this ability and were forced to become market followers, ones limited by their knowledge of the market and forever at the mercy of their larger competitors. However, that has changed.
Thanks to inbound marketing, small businesses can now segment their customer base for a fraction of the cost when compared to outbound strategies. However, does that necessarily mean that there aren't any costs to inbound marketing? Unfortunately, it doesn't. In fact, as is so often the case in business, time is money and it's exactly the same thing with inbound marketing. It takes time to make inbound marketing strategies work. However, for the most part, the costs of inbound marketing are often a fraction of the costs of outbound marketing.
The Accuracy of Inbound Marketing
You’re probably wondering how anyone could track their customer segments without incurring high costs. After all, if that were possible, then those marketing departments within those large corporations would be a thing of the past, right? Well, they pretty much are. Except, now their focus is on using SEO (search engine optimization) strategies to attain the number one position on internet searches and increase their website's PageRank for keyword-focused content.
For small businesses, this means taking advantage of the free economy and following the doctrine of the “long tail of the demand curve”. This doctrine is forcing brick and mortar businesses, built on outbound marketing approaches, to lose vast amounts of market share to smaller enterprises focusing on inbound strategies. In some cases, it’s forced enterprises like Blockbuster to lose out to an online entity like Netflix, an enterprise that has grown market share by capitalizing on their lower overhead and larger online reach. So, as a small business owner, can you take advantage of the free economy? You can.
You can read about the five marketing strategies described in this video by going to: 5 Simple Approaches to Maximize Small Marketing Budgets
How Can You Segment Your Customer Base Online?
Within this blog is an embedded widget, one that tracks visitors to the site and provides me with instant feedback into those aforementioned customer segments. I have access to information concerning the age demographic of my visitors, their gender, their education level, their ethnicity, what country they live in, their salary range and whether they are married with children, or single and living alone. All of this is free.
Now, If I wanted to, I could further expand on my customer segments by opting for additional services, ones that do cost extra, but ones that are a fraction of the total cost of a full time marketing department. In this case, my total expenditures for further segmenting my visitors would likely cost me less than $300.00 a year. This blog is set up for my customers and for those who want to visit and read about best business practices. I am not selling any products and therefore wouldn’t use these demographics to their fullest. However, you could – especially if your small business needed to increase its market share by selling more products online.
The High Costs of Outbound Marketing
The biggest issue with outbound marketing is the difficulty in tracking leads. When thinking of outbound marketing, think of radio, TV, magazine, print and billboard advertisements. Think of the capital needed to make these approaches work and how they are ultimately predicated on searching for customers, rather than being search by customers. Why are these approaches so difficult to track? Consider the following example:
Let’s assume someone opens up the newspaper in the morning and glances by your print advertisement. Next, they get into their car and hear your radio advertisement. On their way to work, they see your billboard advertisement and finally, when they come home, they see your TV commercial. When that customer decides to move forward with a purchase, you’re probably looking to find out what marketing strategy pushed them to make that decision – and so are they! In fact, if you were to ask them how they came to hear of your enterprise, they’d likely just pick one of the above, not really sure of which one had the biggest impact, or which one make them decide to act.
Unless you had that huge marketing department, you wouldn’t be able to determine what worked best either. That means you’ll forever be employing a “shot-gun” method to outbound marketing, hoping one method sticks, but never certain which one works best. Is this a waste of money? It is. Does it help to lower expenditures and increase marketing ROI? Unfortunately, it doesn’t. Can online marketing produce better results for your small enterprise? It can, provided you've done your homework, and this here is the caveat that most companies ignore. First, for the most part, outbound marketing is more expensive. However, it is a more recognized form of marketing, one where a company advertising on TV is able to gain instant recognition amongst its customers and its market. So, while the costs are high, there are some advantages to using outbound strategies.
Few companies take the time to investigate the benefits of online marketing and even fewer measure inbound marketing vs. outbound marketing strategies. By all means, use outbound marketing. It can and does work. Identify which outbound marketing approach works best for your small business by focusing on how and when your customers come together. Trade shows, conferences and exhibits are excellent examples of outbound approaches that put your small business front and center in your market. However, to be successful means you must accentuate your outbound approaches with a solid online platform. That comes from having a company blog and website with continuously updated content and coupling that excellent content with inexpensive online PPC (pay-per-click) campaigns.
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