Marketing – like many other important activities – often doesn’t get the attention it deserves at many SMEs. Marketing resources are generally scarce and budgets are tight, making it impossible to cover off all bases.
According to the 2019 Salmat Marketing Report, the two biggest marketing challenges facing Australian SMEs are reaching new customers (45 per cent) and creating customer loyalty (40 per cent). To overcome these challenges, SMEs need to better understand changing consumer behaviours, the channels they use and how to foster brand loyalty.
Here are four key insights into consumer behaviour that will help you focus your marketing resources to deliver impact:
- Consumers value Search above all else
Our research found that Search Engine results are the top channel used by consumers to make purchase decisions, with half (49 per cent) of consumers using as their main channel. Surprisingly, Search is now more influential than recommendations from friends/family at 46 per cent, from last year’s 72 per cent. This swing highlights the importance of understanding how consumers change over time and aligning marketing activities accordingly. - Search outranks social
While Search is the number one channel for consumers, only one quarter (25 per cent) of SMEs invest in Search Engine Optimisation (SEO) and even less (20 per cent) invest in Search Engine Marketing (SEM). Interestingly most SMEs (44 per cent) are investing in social media despite only one in four consumers (25 per cent) saying they use social media as an information source for making purchase decisions. Therefore, SMEs can see more bang for their marketing buck if they shift some of their investment to SEO and SEM. - Discounts work, but demonstrating value for money is more sustainable
When we asked consumers why they continue to buy a specific brand, half (49 per cent) chose brands with special offers/promotions/sales. SMEs are already aware of this, with one third (32 per cent) of SMEs discounting their products monthly, and one quarter (24 per cent) doing so weekly.
Whilst discounting can be an effective tactic for getting your customers to return, it isn’t sustainable to do it frequently and isn’t a good way to differentiate yourself from the competition. SMEs should instead demonstrate why they deliver the best value for money. If your marketing messages communicate this effectively, you will have more customers that are willing to pay full price and you won’t have to discount as often. - Aussies love loyalty programs
Australian consumers are conditioned to expect something back when shopping with a brand. That is why nine out of 10 Australians have a loyalty card in their wallet. It’s no wonder why loyalty program points/rewards (36 per cent) rank in as the third driver for brand loyalty. Aussies love it so much that consumers are more likely to buy a specific brand to collect loyalty points over a brand’s ethics or CSR initiatives.
Customer loyalty programs are relatively easy and cheap to set up, yet this tactic only ranked seventh amongst SMEs. In fact, more SMEs choose to invest in sponsorships and special brand experiences. Therefore, you should explore how a loyalty program could work across your organisation.
Being wise about your use of resources is key to a successful SME, and this approach shouldn’t change when it comes to marketing. Invest in Search to reach more customers. Think beyond social. Be smart about discounting. And create a loyalty program to reward repeat customers. By following the behaviour of your customers, you can overcome your biggest marketing challenges and pave a way for short and long-term gains.
Karen Lewis, Head of Digital and ECommerce, Salmat
