Higher Growth Businesses Spend More on Marketing and Shift Marketing Online

Earlier this year we partnered with research firm Hurwitz & Associates on an online survey of small businesses with 1 to 20 employees. (You may remember taking the survey here on this site, back in July.)

As one of the survey partners we were able to get access to the survey results — and I thought you might find some of the key points to be interesting.  The subject of the survey was the recession and online marketing efforts by small businesses.  Here are three key points from the survey:

First of all, let’s look at the revenue levels by size of small business — it’s an eye-opening benchmark for your business.  The median revenue by employee size is $50,000 for one employee.  (Remember, median means half were above and half below.)  If you are wondering how small businesses compare with large corporations, I know from my corporate days that the revenue-per-employee target in large corporations is often $100,000 to $200,000 per employee — or higher — depending on the industry.  Here is the chart from the survey:hurwitz-employee-revenues

Second key point: 46% of those of you surveyed said you expected revenue growth even during the recession.  Those of you expecting to grow revenues are much more likely to invest in marketing – 65% are spending or planning to spend more. I find it encouraging that even though expense budgets may be tight, still — one area that growing small businesses are spending on is marketing. You recognize that marketing = opportunity to grow.

Third key point: how are growing small businesses doing their marketing?  Answer: many of you are shifting marketing online to take advantage of new business opportunities — from traditional media to Web-based tools such as social media (blogs, social networking, online communities/forums) and email marketing.  Now, for many of you it’s a no-brainer that marketing dollars have shifted online.  Here’s the interesting part — from the survey you get to see exactly what others are doing.  Social media, email newsletters and search engine marketing are the top 3 approaches in that order, as this chart shows:

hurwitz-marketing“The survey clearly reveals that the use of low-cost Web-based marketing tools is playing a strategic role in helping businesses succeed,” said Laurie McCabe, partner, Hurwitz & Associates. “Making a few changes to incorporate more online tools into the marketing mix seems to be a key ingredient to small business success.”

The survey also revealed that small businesses anticipating growth are more likely to be using or planning to use email marketing.

  • 82 percent of small businesses that currently use/plan to use email marketing expect revenue growth
  • 18 percent of small businesses that do not use/have no plans to use email marketing expect revenue growth

“Email marketing is one of the best ways for small businesses to attract and retain customers while also growing revenue, which were two of the top business challenges identified by small businesses in the survey,” said Steve Adams, vice president of marketing for Protus, the provider of Campaigner.  “The survey also showed the growing importance of email marketing and other Web-based tools in driving business growth.”

Campaigner sponsored the Hurwitz survey and there were a number of questions in it about email marketing.  But I think one of the reasons that email newsletters stand out is that it’s a cost-effective technique for small businesses. Plus, a newsletter serves a number of purposes (among them:  develops customer loyalty, is a vehicle for communicating  sales promotions, and can be used hand-in-hand with social media such as blogs).  And with today’s tools, an email newsletter is relatively easy for a small business to pull off.

The entire survey results include much more than the flavor I gave in this article — so read the entire thing.

Download the full report: “Small Business Marketing Health Check”.

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Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.