In the dynamic world of small business, where patterns in the market and consumer behaviours are constantly changing, the role of digital marketing emerges as a pivotal force in defining success. At its core, digital marketing is not simply another channel of outreach, but a revolution in the relationship growing businesses have with customer discovery and customer validation. This makes it a necessary component of any thriving small business.
What is Digital Marketing?
Digital marketing can be defined as a suite of digital tools and strategies employed to establish strong brand recognition. From this position, a business can use digital marketing to locate their market niche and get to scale far more reliably than through the use of traditional methods. Digital marketing methods include, but are not limited to, the following four tools:
- Search Engine Optimisation (SEO): SEO involves optimising a website to improve its visibility on search engine result pages for relevant queries.
- Search Engine Marketing (SEM): SEM, also known as Pay-Per-Click (PPC) allows businesses to market using paid advertisements that appear on search engine results.
- Social Media Marketing (SMM): SMM leverages platforms like Facebook, Instagram, and Twitter to gain access to a vast sample of potential customers.
- Content Marketing: Content marketing focuses on generating and distributing content that is, in itself, valuable to potential customers. This is less of an advertisement strategy, and more of a trust and confidence building exercise.
Customer Discovery and Validation
Digital marketing strategies allow small businesses to ground their development in the foundational principles of customer discovery and validation, both concepts emphasised when business students study an MBA, marketing or similar qualification. These principles were first articulated by Steve Blank in his essay: Why Lean Startup Changes Everything, and book with Bob Dorf The Startup Owner’s Manual. In brief, customer discovery describes the process of finding product market fit, i.e., finding your niche, and customer validation describes the process of capitalising on that market fit, i.e., getting to scale.
Customer Discovery: Find Your Niche
Customer discovery is a process that describes the search for a solution to real problems. In the business context, the solution is called a business model, more specifically, a business model hypothesis, implying that the model is an ever improving process. Customer discovery is predicated on developing and fitting together two variables: the problem and the solution.
The core issue for small businesses in the customer discovery phase is, how do you define the problem? Poor answers to this question lead to worse business models. Great answers, however, lead to business success and a better world. Whilst small business owners are often at the cutting edge of innovation, they are fundamentally limited in one crucial regard, they cannot easily see through their customers' eyes. As a result, many business owners believe they have the solution to a problem, but don’t even know what the problem is in the first place. To get around this, business owners need to constantly engage with potential customers, i.e., the people who are feeling the problem that the business is trying to solve.
Customer Targeting: Work Smarter Not Harder
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This is where digital marketing comes in. Let's say you wanted to sell a new health and wellness app; ten years ago you would have to rely on traditional advertising methods like print ads, television commercials, or even the dreaded ‘cold call’. These would often cast a wide net but fail to engage with specific customer needs. You would end up marketing to a broad audience and never understand why someone really wants a fitness app.
Now, with digital marketing, you can precisely target those individuals who are actively seeking health and wellness solutions. By using SEO, you can optimise your content to appear in searches related to health and fitness challenges. Through social media marketing, you can join conversations about wellness, engage with potential customers, and learn about the intricate relationship they have with health and wellbeing. You can drive this home through content marketing, which allows you to create valuable resources like blog posts or instructional videos that address common concerns in the health and wellness community. Most importantly, this final step allows you to open a two way channel and receive feedback about customer needs.
With this stream of information, small businesses are more readily able to pivot their business model to a more optimal solution to the customers problems. Thus, digital marketing makes the customer discovery phase much more efficient.
Customer Validation: Get to Scale
Once a small business has matched their business model with customer needs, it is time to move to customer validation. Whilst there are many facets of the customer validation phase, the most rewarding aspect is scaling the business model to a larger customer base. In short, you have found a genuine solution that makes your customers better off, now it’s time to get more customers.
Going back to our fitness app example, (i.e., business model), that was created through customer discovery now provides genuine value to your customers. Capitalising on this requires getting to scale and increasing the market reach. In the past this would require prime time ad space on national and international channels, expensive interstate and international travel, and large-scale physical marketing campaigns, often resulting in substantial costs and uncertain returns.
By utilising targeted online advertising, and engaging content marketing social media strategies, businesses can reach a wider audience with precision and track the effectiveness of their campaigns in real-time. This approach not only reduces the traditional geographic and financial barriers but also allows for more agile adaptations based on customer feedback and market trends, fostering sustainable growth as the market landscape develops.
The wonderful thing about well tuned customer discovery and validation is that businesses simultaneously attain success in all the traditional metrics (revenue, profit, cash flow, etc.), but also in the more difficult to define aspects, like customer well-being and satisfaction. Digital marketing allows small businesses to efficiently overcome their information limitations, whilst exporting their business model to as many customers as possible.
