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Online marketing for SMEs
Although online marketing has been omnipresent for a long time, only in recent years it has received a lot of attention from B2B marketing executives. The underutilization of its enormous potential becomes especially apparent when comparing current B2B ecommerce practice with how naturally end consumers research and compare products online. No B2C company would be able to compete in today’s hypercompetitive battle for individual customers without the extensive usage of online marketing techniques and channels, such as social search and media engine marketing. Furthermore, novel fields of crowd sourcing and relationship marketing impressively demonstrate how far customer involvement in the online environment can actually extend. Although not every technique of B2C online marketing can also be applied in a B2B context and marketers need to adapt their online marketing mix to individual industry and customer purchasing behavior, studies indicate that marketing budgets will quickly shift away from traditional channels towards a more online centric communication.
Why SMEs in the B2B environment rarely use online marketing
Already in 2010, 94% of companies were convinced that B2B online communication will take a leading function within the next three years, yet looking at its state in 2013 reveals that most companies in fact did not fulfill these self-proclaimed goals. Especially smaller and medium sized enterprises (SMEs) still focus their online presence on few available options despite the vast number of easy-to-use and inexpensive offerings. While companies with more than 5,000 employees predominantly have an online footprint of more than 20 presences, nearly 8 out of 10 companies with less than 250 employees only have five (see figure below). Consequently, larger companies with an established presence of relevant online channels get found more easily, especially by potential customers from valuable export markets, which has an direct impact on their sales.
The reasons why SME B2B marketers have not yet implemented online marketing techniques are diverse and of course may not describe the situation in every SME, yet they all relate simply to missing experience with online channels.
Offline channels are well understood. Marketing processes have been optimized in the past and marketing departments have accumulated relevant information regarding the effectiveness of available channels and can optimally assign resources between them. As a result, online marketing is often approached with a preconception and internal barrier, as the outcome of its implementation is unknown and involves a high perceived level of risk.
Not the potentially huge benefits of online marketing activities are focused on, but the feared investments to successfully adapt it, thus creating a significant discrepancy between off- and online activities concerning achievable results and commitment. Although a well-executed online display advertisement campaign can create huge payoffs and have a significant cost-efficiency advantage, the B2B marketer without online experience tends to rather attend an additional regional industry fair with known investment and outcome.
Lack of understanding for key metrics and analyses
This becomes even more apparent when considering the lack of understanding key metrics and analytics to plan, steer and measure online marketing channels. In fact, there are numerous easy-to-use tools available and analyzing the outcome of online activities can be performed on a much more granular level than offline activities. However, these KPI systems first need to be implemented and some testing may be required before the marketer fully understands which channels trigger leads and conversions in order to increase online marketing performance and ultimately boost revenue.
Online marketing requires a coordination between individual departments, such as sales, marketing and top-level management. Similarly to offline marketing activities a product and communication strategy needs to be developed, in order to communicate a coherent company image to potential customers. This strategy needs to be communicated to all involved parties and stakeholders.
Lastly, the same models that are successfully used for offline activities are applied to online channels, thereby ignoring the very basic difference between information seeking of the target audience in offline and online environments. More specifically, B2B offline marketing is centered on the sender’s perspective and means as how to optimally push a company’s offerings to potential customers through available channels such as industrial fair product presentations or print magazine advertisement. Offline marketing thereby assumes a linearity of the sourcing process and a passiveness of the prospective buyer, where the advertising party needs to communicate its offerings in order to funnel targets from awareness to interest and finally conversion. Online marketing campaigns, however, are based on a pull strategy , as customers actively research and compare available solutions for their problem. A successful online B2B marketer therefore specifically tailors the information to the demands of the individual prospect and channel, thereby only communicating what is actually required and when it is required. Choosing and applying the right online marketing tools, such as search engine marketing, directories or the company website, from the vast number of available options thus requires some knowledge of the unique advantages and disadvantages of each technique, which can be particularly difficult for inexperienced B2B marketers.
For more information please read our white paper Online marketing for B2B companies