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Financial constraints are forcing Australian small businesses to push marketing spend down in their list of priorities, despite many seeing it as valuable for growth in customers, leads and sales.
New research commissioned by the QuickBooks cloud accounting software provider, Intuit Australia, reveals that, despite eighty per cent of small businesses seeing the value in marketing their business, only thirty-four per cent are prioritising funds in their budget for marketing.
The study, conducted by Lightspeed Research, surveyed just over 500 small business owners in Australia and found that the vast majority of small business operators see marketing as a valuable tool. Those small businesses who value marketing saw it as a way to grow their customer database (39 per cent), bring in new business leads (42 per cent) and achieve direct sales (38 per cent). However, almost half of small businesses (46 per cent) face budgetary constraints that force them to focus their spend on other areas of their business. Instead, many operators rely on word of mouth to raise their business’s profile.
“It’s concerning that so many small business owners in Australia are sacrificing opportunities to grow their business profile as a consequence of having to spend on other priorities,” said Natira Drayton, Country Manager, Intuit Australia. “This is a classic trap for small businesses. While day-to-day operational demands can make finding the time and money to invest in marketing difficult, it’s hard to keep cash flow healthy and achieve your business’s potential without it.”
These findings follow research conducted by Intuit Australia late last year that showed that insufficient cash flow has resulted in Australian small businesses losing out on opportunities, with sixty-three per cent of small business owners surveyed reporting that they had experienced cash flow issues more than once during the past financial year[ii].
Drayton noted, “Our research highlights the importance of business owners reviewing cash flow on a regular basis in order to ensure their finances are healthy and that they can budget for investments (like marketing spend) that can help to grow their business.”
Almost half of SMEs (45 per cent) indicated they need support with marketing their business. SMEs pointed to opportunities to attend networking and self-development events (27 per cent), free advertising space on a local billboard (27 per cent) and toolkits for creating marketing materials (26 per cent) as areas of marketing support they would take up if offered.
The Intuit Australia commissioned Lightspeed Research study also found:
The top three reasons SMEs don’t prioritise marketing include: relying on word of mouth to market their business, feeling like they don’t have enough budget to spend on marketing, and believing there are other things they need to spend money on before marketing
58 per cent of those ages 25-44 see the value in marketing
31 per cent of those aged 55-64 place less value on marketing
Website (47 per cent), social media (42 per cent), email marketing (25 per cent), and digital marketing (24 per cent) are considered the most important marketing channels by Australian SMEs.