E-Marketing Effectiveness and Small Business Management

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Small business owners sometimes wonder whether e-marketing can have a significant impact on their sales. Business is about positive return on activities and e-marketing is one tool some small businesses don’t yet understand.  A study by Eid & El-Gohary (2013) discusses how there is still a lack of systematic empirical evidence regarding online marketing but by analyzing budgets, tools, pre-sales activities, and after-sales activities, performance and effectiveness of marketing in 114 small businesses they can get a better perspective of e-marketing activities. 

Small business maintain similar characteristics that puts them within the same broad category. Small business are independently owned, managed by the owners, financially connected to the owners, and most of the important decisions are made by the owners. The use of decision e-marketing is not that familiar among many small business owners and they will need a personal investment of time, effort and resources to make it work. 

When small businesses are successful in their e-marketing practices they can find an increase in profits, market share, brand equity and productivity. Their business moves to a higher level of customer attraction and retention that helps them grow their opportunities both personally and financially.  Marketing costs can be reduced for businesses that successfully find a mix that works for them. 

It was found that the EM budget, pre-sales marketing and after-sales marketing explain 71.4% of e-marketing performance 76.3% of marketing effectiveness. E-Marketing can have an impact on successful sales generation. There is a net positive result of marketing and sales returns in the virtual world. The use of specific skills didn’t seem to be as important as engaging in the overall process of online marketing. Companies that begin move, study, explore and implement online marketing campaigns regularly find their bottom lines improving. 

To people who have run their mom and pop shops for years advertising in their local newspapers, building displays, and attracting customers with sales the transition to online can be difficult. They need not give up what works in traditional approaches to enhance those messages with online components. It wouldn’t be recommended anyway. Marketing is about finding what works and seeing how the different methods of marketing mix together to create effectiveness. 

Eid, R. & El-Gohary, H. (2013). The impact of e-marketing use on small business enterprises’ marketing success. Service Industries Journal, 33 (1).

Effectively Using Online Marketing Channels

Internet marketing is in an ever changing state of development with both successes and failures. At times it can be a cost effective approach to reach out to increasingly Internet savvy consumers but at other times the total online marketing mix may be incorrect leading to wasted resources.  Research by Li and Kannan (2014) delves into online channels, visits and purchases. Their study helps in understanding how channels work together to create effective practices.

Marketing channels range but often include direct URL, searches, referral sites, emails, and banner ads. It is also possible that customers may choose a display impression but never actually click upon it. Each channel has varying effectiveness in terms of its ability to encourage customers to make a purchase.  In other instances these channels may be used in combination along with newer mediums not yet incorporated into the mainstream. 

In any online marketing campaign there costs of effort and cognitive costs. Finding the necessary information to make the purchase has a cost factor (Shugan, 1980). If this information is difficult to find, doesn’t move to a purchase quickly, and is difficult to navigate customers may deem these costs as too high and simply move onto other sites without making a purchase.  The process of finding and purchasing should be smooth, simple, and use the least amount of effort.

There are also cognitive costs associated with the processing of information (Johnson, et. al., 2003). All processing of information takes considerable energy. Difficult to understand pages with irrelevant information raise cognitive costs. Marketing should encourage faster and simpler mental processing based upon the merits of the product and the audience. There are natural differences in the type of customers attracted. 

The authors found that it is necessary to estimate the effects of visiting and purchasing to find appropriate avenues of raising click to purchase rates. The channels often work together but those firms with strong brands can obtain as much traffic through organic searches as they can through paid searches. Paid searches constitute around 50% of online marketing expenditures but if removed customers switched to organic searches. Email and organic searches have a longer impact than click through ads and should have greater emphasis in a marketing campaign. Likewise, retargeting click through ads seemed to be less effective over time.

Johnson, E. et. al. (2003), Cognitive Lock-In and the Power Law of Practice. Journal of Marketing, 67 (April), 62–75.

Li, H. and Kannan, P. (2014). Attributing Conversions in a Multichannel Online Marketing Environment: An Empirical Model and a Field Experiment. Journal of Marketing Research, Vol. LI

Shugan, Steven M. (1980), “The Cost of Thinking,” Journal of Consumer Research, 7 (2), 99–111.