How to build a marketing strategy for a small business

What a marketing strategy is, and is not

Strategy professor Richard Rumelt argues in his 2011 book Good Strategy Bad Strategy that good strategy is a form of problem solving. It identifies the key problem, picks an approach that deals with it and coordinates actions around that approach. He describes bad strategy as filler, jargon and goals dressed up as a plan.

Apply that to marketing. “Grow revenue by 20 percent” is a goal, not a strategy. “Post on social media three times a week” is a tactic. A strategy sits between them: it explains why you will win and which few things you will do because of it.

A useful test is whether the strategy rules things out. If it would be equally true for any competitor, or it commits you to every channel, it is not yet a strategy.

Step 1: diagnose where you really are

Before choosing anything, write down the real problem in two or three sentences. Use numbers from your own business: how many enquiries you get, how many become customers, what a customer is worth, where customers come from today and where you lose them.

Most small businesses have one of four problems. Few people know you exist. People find you but do not trust you. People trust you but the site or the sale loses them. Or you win customers once and they never return. Each calls for a different response, and naming the right one saves months.

Ask what job customers hire you for, the idea behind jobs to be done. Add what you know about competitors. List the three businesses your buyers compare you with and write down what each promises. The gap between their promises and your strengths is where your positioning will live.

Step 2: choose who you serve and why you win

Pick the customers you most want more of: your ideal customer profile. For business customers, list firmographics such as industry and size. Our guide to ideal customer profiles and personas shows how to build that choice from your best existing customers. The U.S. Small Business Administration puts the principle plainly: your business will not be for everybody.

positioning is the sentence that says who you serve and why you are the better choice. A workable template is: for [type of customer] who [situation], we are the [category] that [main benefit], because [reason to believe]. Write it, then test it on three customers. If they cannot repeat it, simplify.

Positioning is what every channel then repeats. It is also what AI assistants repeat when they describe you, so inconsistent descriptions across your site and profiles cost you in AI search as well as with people.

Step 3: choose channels by evidence

Our guide to what digital marketing is lists the seven channels. Choosing among them should follow evidence, not preference. Ask three questions of each channel. Do your buyers use it when they are deciding? Can you produce what it needs consistently? Can you measure what it produces?

Gather evidence cheaply. Ask your last ten customers how they found you and what they compared. Search your main service phrases yourself and see who appears. Check which channels your analytics already credit with leads. Ask an AI assistant the questions a buyer would ask and note which businesses it names.

Then commit to one or two primary channels and one supporting channel. Weigh owned, earned and paid options, since a mix of all three is the most resilient. A strategy with eight channels is a wish list. Use the marketing funnel as a check: make sure you have something for people who are only starting to look, something for those comparing and something for those ready to act.

Brand and sales activity: how to balance them

Les Binet and Peter Field analysed campaigns from the IPA Effectiveness Databank, the UK Institute of Practitioners in Advertising’s collection of award-entered case studies. Their 2013 report The Long and the Short of It concluded that the best results came from combining brand building, which grows future demand, with activation, which converts existing demand. One summary of the study reports a rough optimum of 60 percent on brand and 40 percent on activation, from 996 campaigns entered between 1980 and 2010.

Treat that as a direction, not a formula. The campaigns were award entries by mostly larger advertisers, which are not a random sample. The IPA’s own 2018 follow-up, Effectiveness in Context, found the best mix differs with brand type and context. A small local business with few repeat buyers will lean towards activation, such as search and reviews. A business in a crowded category may need to invest more in being remembered.

The takeaway for an owner is simple. If everything you spend is aimed at people ready to buy today, you will run out of such people. Put some effort into content, reviews, video and partnerships that make you the name people think of before they search.

Step 4: set the budget

There are three honest approaches. Percentage of revenue is simple, but it ties spend to last year rather than to opportunity. Goal-based works backwards from customers wanted. Affordable-loss starts from what you can lose while you learn, then scales what works.

A worked illustration for goal-based budgeting, using made-up numbers. You want 12 new customers a quarter. About one in four qualified enquiries becomes a customer, so you need 48 enquiries. If an enquiry costs about 60 in marketing, the quarter needs roughly 2,900. If a customer is worth 1,500 in gross profit over their lifetime, that spend is comfortable. If a customer is worth 300, it is not, and you should change the channel or the offer before you spend.

Your customer acquisition cost is the figure that keeps this honest. Total marketing spend divided by new customers should sit well below what a customer earns you. Start below your ceiling, review every month and move money towards the channel that produces customers at the lowest cost.

Step 5: a 90-day plan

Turn the strategy into three months of work. Days 1 to 30: fix the foundations. Clarify your positioning, make the website say it, set up tracking, collect your reviews and build the first version of your email list.

Days 31 to 60: launch the primary channel. Publish the first pieces of content or start the first campaign, send the first email, and ask every new customer how they found you. Days 61 to 90: review and decide. Compare results with the targets you set on day one, keep what works, cut what does not and write the next quarter’s plan.

Keep the plan on one page. Each line should name an action, an owner, a date and the number that will show whether it worked.

How to measure and when to change course

Choose one outcome number per channel, such as qualified enquiries, bookings or orders, and a cost per outcome. Add one overall number: new customers per month. Review them monthly and judge each channel over at least a quarter, since search and content take longer to show results. Google’s own guidance says changes can take from hours to several months to have an effect.

Change course when the diagnosis was wrong, not when one month is weak. If enquiries rise but customers do not, the problem is further down the funnel. If nothing rises after a full quarter of consistent work, revisit the channel choice and the positioning before adding more activity.