In this article, we shall discuss 25 free and low-cost marketing ideas for small businesses. To skip our detailed analysis on how to help SMEs (small and medium enterprises) thrive and compete in the current economic landscape, go directly and see 10 Free and Low-Cost Marketing Ideas for Small Businesses.
SMEs are a significant contributor to economies around the world. In OECD economies, SMEs make up for more than 99% of firms and nearly 70% of all employment. In other high-income countries, they account for more than 50% of the gross domestic product. However, according to an article by McKinsey, between February 2020 and April 2021, SMEs in more than 32 countries suffered losses ranging from 30 to 50 percent of their annual revenues. Recognizing the importance of SMEs to economies and societies, governments around the world are prioritizing the protection of SMEs through direct financial support, public guarantees of loans, and tax exemptions. Although essential, these measures do not set up small businesses to compete in the long-term and adapt to the changing landscape like the increasing pressure to decarbonize, internationalize, digitize, and employing the best talent. A report by the Business Development Bank of Canada found that the most significant way to support SMEs is to balance financial support with good advisory services and free and low-cost marketing ideas for small businesses. Some important companies which are increasingly optimizing their services to provide cost-effective marketing solutions for SMEs are Salesforce Inc. (NYSE:CRM), Klaviyo Inc. (NYSE:KVYO), and Alphabet Inc. (NASDAQ:GOOG). To read more on how these companies are investing in marketing capabilities geared towards small businesses, check out our article on the 15 Best Marketing Software For Small Businesses.
Areas of Potential for SMEs: An Analysis
Amid the digital age, companies are hurrying to adapt to the massive economic shift. A July 2020 survey by McKinsey demonstrates an accelerated transition towards using digital channels to engage with consumers, with adoption rates skyrocketing in recent years. This transition is significantly apparent in Asia-Pacific, where the number of digital consumer interactions has advance by more than five years, much greater than the global mean. Although such magnanimous growth is supplemented by countless benefits, these advantages normally skew in the favor of larger businesses. Some of the largest companies by size dominate the top decile of organizations in digital channels, capturing more than 95 percent of digital revenues. SMEs are lagging substantially behind in this global quest to expand digital capabilities. One of the reasons for this is the fact that digital solutions are more geared for larger enterprises and are difficult to scale down for SMEs, which are increasingly relying on free and low-cost marketing ideas. In Singapore, for instance, more than sixty percent of respondents claimed that digitization is too unaffordable for SMEs. In this vein, marketing software companies like Salesforce Inc. (NYSE:CRM), Klaviyo Inc. (NYSE:KVYO), and Alphabet Inc. (NASDAQ:GOOG) are spearheading the initiative in optimizing services for small and medium businesses as well. This problem is likely to be more significant in underrepresented segments of the world; in the United Kingdom for example, the report shed light on the fact that SME's headed by women are 20% more likely to opt out of digital solutions to enhance productivity and efficiency.
Furthermore, an increased number of studies are pointing towards the need for SMEs to internationalize in order to increase efficiency and generate growth. However, smaller businesses often find it difficult to expand outside their home market strategically. Unlike larger competitors, SMEs simply do not boast the same amount of resources to conduct extensive market research before expanding into new markets. Due to resource constraints, SMEs tend to rely on free and low-cost marketing ideas for small businesses to generate growth. Fluctuations pertaining to international markets which were initially brought on by the pandemic have made internationalization more tricky. According to McKinsey, more than 90 percent of small businesses claimed to delay their plans to penetrate foreign markets due to the pandemic and the different challenges it has posed. Furthermore, global supply chain turbulence have hit SMEs hard and have set back export growth. A June 2020 survey conducted in the United States shed light on the fact that more than 45 percent of SMEs had experienced supply chains turbulence.
Lastly, as the climate crisis exacerbates and countries across the world race to meet their decarbonization goals, more than 40 percent of SMEs in the United Kingdom have not made a sustainability plan and more than 30 percent don't intend to, according to a survey by YouGov. However, McKinsey points out that smaller businesses are much more well placed than their larger counterparts to achieve decarbonization targets effectively. However, it is also true that SMEs may not have the available resources at their disposal to undergo such a massive operational shift. And despite the fact that many small businesses are incentivized towards sustainability via various decarbonization programs, the up-front investments needed to engage with such programs are an enormous discouragement for SMEs.
Winning the Tech Market: An Overview
In the U.S, SMEs represent more than fifty percent of all tech spending, and in telecom and electronic device segments, SMEs are spending more than larger companies which providers have traditionally pursued. However, according to an analysis by McKinsey, despite the SME tech market being significantly lucrative, it contains substantial challenges in the shape of a highly competitive vendor landscape and a fragmented consumer environment. Tech suppliers are largely hesitant to apply their existing portfolio and channel strategy to the SME market without getting a robust understanding of the market's peculiar purchase preferences and unmet needs, and tailoring commercial strategies accordingly. The recent economic headwinds have adversely impacted the SME sector, with consumers now negotiating each purchase more carefully and relying on free and low-cost marketing ideas for small businesses. In a survey, McKinsey discovered that more than 35 percent of SME owners regard skyrocketing inflation as their starkest challenge - the highest percentage in more than four decades. One in five owners expect growth to substantially diminish and talent with expertise seem to be slim pickings in the midst of the current attrition. More than ninety percent of small businesses have cited recruitment concerns. You can read more about some of the challenges and potential facing SMEs in our coverage of 25 Most Successful Small Business Ideas.
In this incredibly turbulent economic climate, SMEs are focusing on investing in their purchase patterns. Companies with more than a hundred FTEs are cautioning more restraint with respect to their spending decisions. SMEs are achieving this by centralizing purchasing decisions, digitizing and building on procurement abilities, experimenting with usage-based consumption models, and trying out products and services before actually going ahead with procurement. Hence, SMEs are reducing reliance on marketing software companies like Salesforce Inc. (NYSE:CRM), Klaviyo Inc. (NYSE:KVYO), and Alphabet Inc. (NASDAQ:GOOG) and looking for free and low-cost marketing ideas for small businesses.
Free and Low-Cost Marketing Ideas for Small Businesses
To compile our list of 25 free and low-cost marketing ideas for small businesses, we decided to undertake a consensus-based approach using a diverse variety of credible sources (1, 2, 3, 4, 5, 6). After shortlisting more than 50 of the most repeated ideas, we evaluated each idea based on its cost effectiveness (20 points), ease of implementation (15 points), and proven success for businesses (10 points). We then proceeded to score each idea according to the aforementioned criteria and selected 25 ideas which scored the highest points. Subsequently, we ranked each entry based on the total points scored, from lowest to highest. Where there was a tie, we broke it based on cost-effectiveness.
Free and Low-Cost Marketing Ideas for Small Businesses
25. Host a Small Event
Average Score: 12
Small businesses can host small events at either their store or at a free-of-cost venue where the owner can meet with the consumers and connect with them. One such event can be an exhibition.
24. Attend Local Events
Average Score: 13
Attending local events does not only introduce small businesses to new customers but also to new people and brand owners that may help in creating new connections. These events may include fairs and maker’s forums where small businesses can be promoted to a large group of people at a very low-cost.
23. Create a Discount Program
Average Score: 14
Small businesses can create a discount for loyal customers or bulk orders to increase sales and improve customer loyalty. Discounts can be given at a minimum rate so it does not impact the profits greatly and attracts customers.
22. Network & Partner with Other Small Businesses
Average Score: 14
It is crucial for small business to partner with other small businesses from the industry to grow. Businesses can partner with each other using free features like Instagram Live to connect with each other’s audiences.
21. Make Use of Thank You Notes
Average Score: 15
Sending thank you notes to loyal and existing customers shows gratitude and can be used by small businesses to promote their enterprise and establish a relationship with the consumers.
20. Develop a Signature Visual Brand Style
Average Score: 17
Developing a signature visual brand style by using unique fonts and colors can help consumers identify the brand. This is a low-cost method that can increase awareness using visual images and is one of the best free and low-cost marketing ideas for small businesses.
19. Reach Out to Influencers
Average Score: 18
Small businesses can send public relations (PR) packages to influencers since they are experts in storytelling and can help divert their audience to the small business. This is a low-cost method to reach new audience.
18. Get Business Cards
Average Score: 18
A small business owner can design business cards that represent the brand and can be given to any potential or actual customer. Business cards can be designed using many free software online.
17. Take Part in Local Awards
Average Score: 21
Many communities and localities have their own awards for small businesses. Applying for and taking part in local awards helps the businesses grow and increases the credibility of the product or brand. For example, receiving an award for the “best product in the industry” can increase credibility and gain attraction.
16. Host Social Media Contests & Giveaways
Average Score: 22
By hosting social media contests or giveaways, small businesses can engage consumers in two-way communication. Followers can partake in contests, which may require them to tag their friends or share the business’s page in order to win a prize at the end. This low-cost method of marketing increases brand awareness and engages consumers in an exciting way.
15. Engage with User-Generated Content
Average Score: 23
Small businesses can promote their products and services by incentivizing their existing consumers to leave reviews and share all content they create about the respective product. This enhances the credibility of the brand and encourages other potential consumers to engage with the business, making it one of the best free and low-cost marketing ideas for small businesses.
14. Post Helpful Videos
Average Score: 24
Small businesses can use low-cost methods to create videos on their own using their personal devices and social media platforms like Instagram and Facebook. Videos are an effective marketing tool and can help small business inform and connect with their consumers. Some examples of videos include tutorials, behind-the-scenes, and product demos.
13. Run a Webinar
Average Score: 25
Small businesses can run informative webinars that can help potential customers gain helpful insights into the brand. Through webinars, the business can also interact with consumers and make them feel heard. It is important to promote the webinar prior to the event through social media or email.
12. Encourage Customer Referrals
Average Score: 27
By using referral programs, one can use consumers to market for their business. This is a free yet effective technique to gain more consumers. Consumers that refer the small business to their friends and family can get a discount next time they buy a product from the business.
11. Start a Blog
Average Score: 30
Small business owners can start a blog to increase traffic on their website and gain organic followers. This is a completely free way of promoting the small business and allows the owner to talk about the business and useful information that may be crucial to the business. Starting a blog is number 11 on our list of 25 free and low-cost marketing ideas for small businesses..
