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Worries about ROI dampen SME marketing plans

The majority of small business owners believe marketing is essential but concerns about costs and measuring return on investment are holding some firms back.

New research from Royal Mail MarketReach shows that 81% of UK SMEs believe marketing is critical or essential to their business growth; and 37% say it is the primary driver of their business.


Nearly three-quarters (72%) of SMEs invest up to 20% of their turnover on marketing and use an average of 3.5 media channels to promote their business.


The most popular channels for SME marketing are email (82%), social media (62%), online advertising (50%) and direct mail (46%). Only 16% of small firms currently use search marketing and 7% use telemarketing.


However, the research has found that some small business owners are wary of using new channels because of worries over costs and, most of all, getting a return on their investment. Capacity to handle customer responses as a result of marketing activity is the third most wide spread concern, followed by worries over lack of expertise.


Researchers also questioned respondents on what they want to achieve with their marketing activity. Two-thirds (66%) of small firms are looking to acquire new customers, 46% want to build stronger relationships with their existing customer base, 31% said they are looking to sell through more channels and 24% want to expand internationally.


Jonathan Harman, Managing Director of Royal Mail MarketReach, said: 

"Our research shows how important marketing is for UK SMEs. It helps them grow by acquiring new customers and building better relationships with their existing ones. But it is clear that lack of knowledge, fears about cost and concerns about measuring their returns could be holding them back."

The findings of the research have been published in a new guide, Smart Marketing for Small Businesses. Royal Mail has recently launched a new online marketing tool, MailshotMaker.


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