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6 Cost Effective Marketing Strategies For Small Business

Paul McIntosh • September 4, 2019

In this post, we'll explore 6 marketing strategies, broken down by cost-effectiveness that small businesses can use to attract more customers.

This blog is specifically designed to make sure that your business has the best marketing strategies implemented regardless of what kind of business you are running – whether B2C or B2B. We are going to tell you the six most effective and proven marketing strategies that our experts highly recommend.

First and foremost, marketing doesn’t require you to have any magical powers. All you need is the drive to make your business successful and efforts in the right direction.

Before implementing a marketing strategy, make sure you known what are your customer demographics? Where they live? What they seek in products? And what motivates them to purchase something?

Now without any further delays let’s jump into some of the best strategies you can use for your small business.

Facebook Advertising

More than 3 million businesses are using Facebook for their business advertisement. Facebook advertising is both effective and inexpensive for marketing purposes and it allows brands and companies to reach virtually everyone when done properly.

How much do Facebook Ads Cost?

This is one of the most common questions we come across, especially since paid only advertising can be a confusing system. Essentially, here's a general guideline of what a solid Facebook Ad looks like in terms of cost. While the range can vary depending on industry, quality, and competition our experience after building over 4,000 Facebook Ads is and average cost of:

$3-$5 for every 1,000 people that see your ad (also known as CPM or Cost Per Viewable Impression)
$1.86 - $2.35 for every 1 click on an ad you get (also known as CPC or Cost Per Click)

If you google average cost of Facebook ads, you'll see lot's of ranges, charts, and data on this, but this is our own internal data, after running thousands of campaigns. So now for the burning question:

Are Facebook Ads Worth It?

The short answer is YES! While we have our own methodology surrounding ad spend, and what's appropriate based on a businesses goals the bottom line is, Facebook Ads (which includes advertising on Instagram) is probably the most cost effective channel of paid advertising that exists. Facebook Ads Are:

Easy To Use & Easy To Track
Very Cheap
Extremely Effective
Affordable On Any Budget

The way your standard Facebook Ad works, is you set a daily budget and a period of time for your ad to run. Let's say you own a local small business and you want to reach potential customers within a 5-10 mile radius of your business. You can set a small $5 per day budget.

If your area is wide enough with enough people, on average, your going to reach about 1,000 people per day with 2-5 clicks minimum depending on your CPC.

So in a 30 day month, you spent $150 to reach over 30,000 people and drove roughly 60-150 new potential customers to your business. Ultimately, it's up to each business to do a little math to ask themselves weather those numbers check out, but for most, the answer will be yes.

Let's look at a quick example: Assume you own a burrito shop. Your Facebook ad is designed to drive in-store traffic. Now, we'll assume your average in store purchase is roughly $12 (accounting for single orders at $8-$9 on the low end, and 2 person orders at $15-$17 on the high end).

If you spent $150 on your ad, and 75 people visited your store to place an order as a result your ROI looks like this:

$12 (Per Order) x 75 (New Customers) = $900 (Revenue) - $150 (Ad Spend) = $750 (Gross Profit)

Gross ROA (Return on Ad Spend) = 500%

This means, for every $1 you spend on Facebook Ads You Get $5 Back

How much will you spend next month?

Google Ads & Microsoft Ads

Google gets more than 40,000 queries every second, every day. There is no other method that has more potential than Google Ads to provide your business with the attention that it deserves, but it does come at a price. The platform is not the cheapest way to market your small business, but it's been around the longest and is a tried and true method. When done properly, it can certainly be a cost effective marketing strategy to have in your arsenal.

How much do Google Ads Cost?

To understand this, you need to understand that Googles Network has 2 parts. The search network and the display network. Ads on the search network will typically cost between $1-2 per click, while clicks on the display network average about $1.

However, unlike it's biggest competition, Facebook Ads, Google Ads work differently and require (in most cases) a much larger budget to be effective. When you run an ad on social media, your reaching people in a more general sense. When you run search ads especially, your reaching people that are actively searching for your product or service just right then. We call this the Zero Moment.

Are Google Ads Worth It?

Because Google Search Ads are more active than passive, you can expect more clicks and impressions a lot faster, and as such, you will usually burn through a smaller budget much quicker than through Facebook ads. Because you will usually see higher clicks, you don't have the extra budget to pay for the impression side of things through the day without a bigger budget.

For this reason, Google Ads are extremely effective and in some cases better suited for certain industries, but they typically come with a higher cost to be effective than other methods. That being said, the formula we used above doesn't change. If you can get $5 back for every $1 you spend, then budget becomes less and less of an issue.

***Pro Tip - If you are new to Google Ads, it may be in your best interest to pay a little extra to hire a professional Google Ads management company to help, because of it's complex nature.

Organic Search & Social Media

The word Organic gets thrown around in our industry a lot. In it's basic form, were referring to being seen or found online, with content you didn't have to pay to promote. One cannot deny the importance of social media and organic SEO for small business marketing because hey.... It's free right?

Yes, being found organically is free, but before you read this and decide this is your best bet, understand, that every other business in the world thinks the same thing. Because of that, this is the most competitive space to advertise or marketing your business. I mean, who doesn't want to be #1 on Google or Have 2 million Instagram followers.

Understand that while it can be done, and there is no paid advertising cost, building a strong Organic presence online takes time, patience, experience, Time TIME and TIME. So while you may be thinking, this is the obvious way to go, I'll tell you that after building over 500 SEO campaigns and Organic Social Media profiles in our lifetime, it can actually cost a lot more long-term than paid ads.

So is it worth it? 100% Yes, but you really need to understand the patience required. With the right strategy, you can get $20, $40, $400 back or more for every $1 you invest in Organic marketing, and it pays further dividends beyond that. But it requires a much higher cost up front with less of a ROI out of the gate than paid ads.

Content Marketing & Inbound

Content Marketing (AKA Inbound Marketing) is the concept of using high quality content to attract new customers through permission based selling.

To make this concept EXTREMELY SIMPLE. Here are the facts.

Inbound Marketing & Content Marketing is going to have the single highest overall return on investment for any company on the planet period.
At the same time, to do it properly, requires a high commitment of time, which cost money. In addition, to really leverage it to it's potential, you'll need planning and in most cases marketing automation (making your inbound content, SEO, Paid Ads, CRM, Sales Enablement, and Customer Service, all work together)
Most small businesses that think they are ready for this are not. It doesn't mean you shouldn't do it, but content marketing isn't a DIY thing. It takes in most cases, a professional, or more likely a team to make it work.
Before starting any content marketing strategy, you have to have a plan and a playbook which should take no shorter than 3-12 weeks of research to create.

You can expect to pay in most cases a $1,000 - $15,000 / month retainer for the brainpower, plus automation software costs, plus costs for the content itself. Then to really push it out, you'll need email, paid ads, social media, and good SEO.

However, companies that adopt this model and drink the proverbial Kool-Aid, are the most successful overall. A true content marketing and inbound strategy encompasses all of the 5 other channels above and makes them work together.

More than a return on ad spend, companies that adopt this method of marketing usually throw out numbers in OVERALL NOT JUST REVENUE GROWTH in ranges like 400% - 1,200% and that's normal, not one off case studies.

In summary, we rank these 6 strategies in order of lowest to highest cost as follows:

Facebook Ads are the most cost effective, and they work. There is no reason a small business shouldn't have a minimal Facebook Ad Budget.
Google Ads & Microsoft Ads are moderately cost effective. They usually require a slightly higher budget, but when done properly, are incredibly effective and can skyrocket your small business.
Organic Media like SEO and Social Media are one of the most effective strategies on the planet. They always work. Beyond initial returns, organic media pays an incalculable amount of dividends.
Inbound & Content Marketing is the culmination of all other strategies rolled into one. While the cost is high, the returns are unmatched v.s. any other form of marketing that exists.

Our advice as always, is to do a little homework, and remember, as a business owner, your time has a $ value and should always be considered. Live long and grow : ).

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