Australia’s small businesses are discounting products too heavily according to new research by Salmat. The Salmat 2019 Marketing Report reveals while small businesses believe discounting is key to capturing customers, consumers are looking for value for money above all, rather than the cheapest offering.
Salmat has revealed many small business owners are wasting money on strategies that are failing to connect them with their customers. Almost half of SMBs surveyed focus their marketing spend on social media, despite results showing the majority of consumers find products or services through search engines.
Karen Lewis, head of digital and eCommerce at Salmat said the research reveals consumers’ top concern when buying products from a brand is value for money (85 per cent). She said this suggests instead of outright discounting, SMBs should consider providing value-based propositions instead.
“Businesses both large and small discount, and whilst price is still a huge deciding factor for consumers, it isn’t the only way brands can differentiate themselves,” said Lewis.
“Consumers are more receptive to brands that deliver value for money – this is still price driven but demonstrating value for money is something marketing can really own. Instead of discounting heavily or focusing on undercutting the competition on price, businesses should instead demonstrate why they deliver the best value for money. Marketing messages can focus on this in addition to offering promotions. This, of course, needs to be delivered to the consumer via the channel they use to search and browse for brands.”
Search results and word of mouth rank as the two top preferred sources for product and service recommendations, yet Lewis suggests most small businesses are failing to capitalise on this, rarely investing in SEO or SEM strategies.
“When you look at the SMB marketing landscape, the investment in SEO and SEM just isn’t there from marketers. Marketers need to ensure they are investing budgets in the most effective way possible to achieve brand impact and reach their targets and objectives, regardless of the size of their business.”
Harnessing the power of customer loyalty was also vital, with 67 per cent of Australians saying they buy a specific product because they trust the brand
“Trusting a brand or service is highly important to a consumer – but so many factors contribute to trust. Delivering great customer service is one of them and should continue to be a focus for marketers. Beyond that, SMBs can look at driving brand loyalty through offering loyalty programs and rewards to showcase how their products deliver superior value for money,” Lewis concluded.
This post was written by Cec Busby for Kochie’s Business Builders.