UK: Concentrate on how to serve your existing customers better.

UK: Concentrate on how to serve your existing customers better. - Marketing: SME should spend more time with clients

Last Updated: 31 Aug 2010

Marketing: SME should spend more time with clients

One idea that has really changed the way many businesses work over the past decade is the notion that 'quality is free'. Managers who always assumed that a trade-off between quality and price is inevitable have been astonished to discover how failing to get it right first time generates enormous costs. These are often institutionalised elsewhere, for example, in huge after-sales service bills. We need a similarly tough-minded approach to marketing: saving money by not doing marketing is a bad idea because it is far more expensive in the long run.

Many believe that marketing is a luxury smaller firms can do without.

They see the expensive, glitzy TV advertising campaigns of the consumer goods industry and think 'that's not for me'. But they fail to see that for firms in these circumstances - markets of millions of anonymous consumers where brand recognition is vital - this is the most efficient way of winning and keeping customers.

For businesses in different circumstances - business-to-business operations, working with a small number of customers, operating locally or with few distribution outlets - marketing's essential task of winning and keeping customers necessarily takes a very different form and may not even be seen as marketing at all.

For example, in his study of 'hidden champions' - smaller firms which quietly excel - Hermann Simon notes that most don't have marketing departments or staff with 'marketing' job titles. Yet, he notes, proportionately more employees in these firms regularly spend more time with their customers than their larger rivals. While the hidden champions are not marketing professionals, 'they are closeness-to-customer professionals,' writes Simon. Real marketing is a vital link in the chain of creating value for customers - not an optional extra. There is no point producing the wrong product right first time because you haven't asked customers what they want, and there is no point in producing the right product right first time if you don't tell people about it.

For many smaller firms, simply concentrating on understanding and serving existing customers better is often the best marketing they can do. Spending time asking them 'How can we improve?', and 'What else can we do for you?' is useful learning and can also raise the firm's profile. That's probably why, in a recent study of 400 very small businesses with turnovers of less than £1 million, Barclays Bank discovered that most (60%) see word of mouth as their prime source of marketing in business.

The other side of the coin, however, are those firms that refuse to invest even minimal amounts in basic marketing. The same survey showed that the average annual promotional spend among these small businesses was just £1,500, far less than 1% of turnover and while 70% of firms boasted a database, only 10% used it for mailing purposes. For them, it seems, marketing is 'too expensive'. If so, like those firms who thought quality cost too much, they will probably find they are 'too expensive' to stay in business.

Alan Mitchell was editor of Marketing and now works as a freelance journalist.

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