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  • Writer's pictureSimon Rawling

Convincing SMEs of the Value Of Marketing - (Podcast Transcript)

Updated: Aug 18, 2023

This is the first episode in a series of podcasts exploring trends and challenges for the Future of Marketing and Digital Communications.

In this episode, we will explore the marketing industry's challenge in convincing SMEs of the value of marketing.

I recently undertook a research report exploring Micro-SME owner decision-making during COVID-19 (Rawling 2023). The study placed 5 Micro-SME owners in a series of scenarios facing three fictional businesses. All participants were then asked to explain their likely actions in each scenario, had they been the owner of each business (Rawling 2023).

While the report's primary aim was to understand the sample groups' likely actions during recessionary periods, the findings revealed some unexpected results.

Not only did participants decline to implement many of the best practices promoted by the marketing industry, but there was also a startling omission of anything related to marketing resources, agencies or consultation when asked.

In this episode, we will examine what these findings mean for the marketing industry and SMEs and propose potential solutions to help remedy the situation.

Lack of strategy

Marketing professor Mark Ritson (2022) posits that strategy is of greater importance to small brands than to large ones, explaining that without a clear plan, small brands can find themselves giving all their time to fighting fires at the expense of more productive tasks (Ritson 2022).

However, throughout the study, the sample group universally declined to acknowledge any long-term strategy (Rawling 2023). When asked to explain their position, one participant stated: “I don't think small businesses very often have—fully defined strategies (...) You do it a bit on the fly, but you’re making intelligent and educated guesses as you go.” (Rawling 2023).

While it’s unclear if these results represent a lack of knowledge or a disinclination to enact such practices, the absence of a long-term strategy is capable of stunting business potential and causing unnecessary stress for SMEs.

A Survey of 350 SMEs by Outbound Engine (2019) concluded that a lack of knowledge of business-specific marketing tactics correlates to higher stress levels in small business owners (Outbound Engine 2019 ).

It’s important to acknowledge that my research (Ralwing 2023) was conducted during ‘the cost of living crisis’ and asked participants to visualise themselves within the recessionary pressures of 2020.

Given that research by Tellis & Tellis (2009) shows a correlation between economic fluctuations and marketing spending, the results risk being biased towards more conservative short-termism.

However, research conducted before 2020 reveals the trend was present prior to the pandemic. For example, in 2019 Outbound Engine (2019) found 75% of SME owners lacked firm ideas for growth or even a marketing plan.


Another finding from the research conducted into Micro-SME owners was the complete omission of anything related to marketing in participant responses.

While no participants explicitly disparaged the marketing industry in the study, there was universal non-inclusion of marketing consultation, agencies or recourses within responses. Instead, the sample group preferred to trust their own judgment or, in a few cases, would seek advice from other business owners or small business organisations (Rawling 2023).

It's important to acknowledge that both this study (Rawling 2023) and the finding of Outbound Engine (2019) represent small sample groups, and neither is peer-reviewed.

Moreover, there is the potential for bias from Outbound Engine (2019), given their preference for SMEs to use their automated software. However, the similarity in findings from different research methods and locations does raise the need for greater research in the area.

One explanation for the findings explored in this episode could be the inherent weaknesses small business face when going up against larger brands.

In his book ‘How Brands Grow: What Marketers Don’t Know’, Byron Sharp (2010) asserts the double jeopardy law explaining a correlation between smaller market share and fewer loyal customers than larger businesses. This places smaller brands at a disadvantage regardless of their marketing tactics.

A recent example of this disparity is evident in the findings by Dr Kite (2021) of Magic Numbers, whose research found for every 50m in revenue, businesses achieved an additional 40p per £1 ROI. Citing the study, Kite (2021) explains that small and large companies spending the same budget will achieve different results.

Why this is important

The number of SMEs has seen year-on-year growth, increasing by nearly 21.% in the last ten years (Statista 2022), and they play a crucial role in contributing to employment, prosperity and innovation. According to the International Labour Organisation (2019), SMEs account for 90% of businesses in most countries and contribute 50% of the GDP in OECD countries. In addition, Micro and Small SMEs account for 70% of global employment.

Given that SMEs' flexibility and lack of formal structure puts them in a unique situation to innovate and embrace market trends and customer needs (WEF 2023). This lack of research and understanding means we are leaving many small businesses flying blind without the ability to make informed marketing decisions.

Recommendations for moving forward.

In a recent IPA article, Lysette Jones (2023) stated that: “if we do not take steps to understand how small brands can break through the hold that big brands have over them, then as citizens we will continue to be vulnerable to monopolistic behaviour and big business agendas.”

While inferences can be drawn from the resources explored in this episode, SME marketing practices need increased take-up of broad-scale quantitative research.

Many practices espoused within the marketing industry are either unknown, unknowns for SMEs, or could be being ignored through action inertia.

Either way, the finding of this report shows the need for far greater engagement from the marketing industry with small businesses; given the vital role SMEs play in society, it’s in everyone's interest for SMEs to succeed.


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