Small business marketing: Your guide to strategy and success

Published Tuesday 20 January 2026

Table of contents

• What is small business marketing?
• Small business marketing strategy for beginners
• How to conduct market research for your business
• How to create a marketing plan
• Small business marketing ideas to try
• Track your marketing success and manage costs
• FAQs on small business marketing

Key takeaways

• Conduct thorough market research by analyzing your industry trends, competitor strategies, and customer needs through surveys, conversations, and purchase pattern analysis to identify market gaps your business can fill.
• Create a comprehensive marketing plan using the four Ps framework (Product, Pricing, Placement, Promotion) and set SMART objectives with specific metrics to track your success and return on investment.
• Allocate your marketing budget strategically by investing 1-3% of revenue for established businesses or 5-10% for growth-focused companies, while dedicating 20% of your budget to testing new experimental tactics.
• Focus on proven low-cost marketing tactics like asking for customer referrals, building a customer database for repeat sales, and improving your online presence through Google Business Profile and local directories to maximize your marketing impact.

What is small business marketing?

Small business marketing is any activity that drives sales and grows your customer base. This includes advertising, pricing, product development, and distribution decisions.

Marketing helps small businesses attract customers, increase revenue, and compete. It covers how you position, price, promote, and deliver your products or services, not just advertising.

So how do you market your products and services? It starts with a strategy, involves a plan, and hopefully ends in lots of new customers. Let's walk through it. You will also find common small business marketing ideas at the end to inspire your next steps.

Small business marketing strategy for beginners

A small business marketing strategy defines your goals and the approach you'll use to achieve them. It provides the framework for your detailed marketing plan.

Your strategy focuses on four key areas known as the four Ps:

• Product: Make your product or service better. Research suggests the product mix can be the top factor in profitability for a business.
• Pricing: Make it affordable and profitable
• Placement: Make it available where customers need it
• Promotion: Make it better known to your target audience

So your marketing strategy will consider which of these levers to reach for. You can go for more than one but try not to bite off too much at once.

How to conduct market research for your business

You can follow this market research guide for small businesses to go deeper into the steps.

Before you can sell to customers, you need to understand them and the world they live in. Good market research helps you find your place in the market, identify opportunities, and see what your competitors are doing. This knowledge is key to building a marketing plan that works.

Research your industry and competitors

Start by looking at the big picture. What are the current trends in your industry? Who are your main competitors, both direct and indirect? Look at what they do well and where they fall short. This will help you spot gaps in the market that your business can fill.

Identify market opportunities and threats

Think about what could help or hinder your business. Opportunities might include a growing demand for your product or a new technology you can use. Threats could be new competitors or changing customer habits. Understanding these helps you plan for the future.

Analyse competitor marketing strategies

Look at how your competitors market themselves. What channels do they use? What is their pricing? What message do they send to customers? This isn't about copying them, but about understanding what works and finding a unique angle for your own business.

How to create a marketing plan

A marketing plan turns your strategy into specific, actionable steps that drive measurable results. It combines research, goal setting, and tactical execution.

Your marketing plan includes three key phases:

• Analysis: Research your business, customers, and competitors
• Planning: Set clear goals and choose your tactics
• Action: Launch campaigns and track performance

Follow these eight steps to create your small business marketing plan:

1. Understand your target customers

Customer research reveals what your target audience values, where they shop, and how much they'll pay. This knowledge ensures your marketing efforts reach the right people with the right message.

Research your customers using these methods:

• Document existing knowledge: List everything you know about current customers
• Conduct surveys: Use free tools like Google Forms for broader insights. Questionnaires are a commonly used data collection method in research, along with analyzing records and conducting interviews.
• Hold informal conversations: Chat with customers about their needs and preferences
• Analyse purchase patterns: Review when, what, and how much customers buy

2. Find your place in the market

SWOT analysis evaluates your business's internal strengths and weaknesses against external market opportunities and threats. This assessment reveals where you can compete most effectively.

Complete your SWOT analysis in these steps:

• Strengths: List what your business does well
• Weaknesses: Identify areas for improvement
• Opportunities: Find market gaps you can fill
• Threats: Recognise competitive challenges

Repeat this process for key competitors to understand your market position and inform your unique selling point.

3. Define your unique selling point

Your unique selling point (USP) is what makes customers choose you over competitors. It combines your business strengths with what customers value most.

Create your USP by identifying:

• Your key strength: What you do better than competitors
• Customer priority: What matters most to your target audience
• Clear benefit: How customers benefit from choosing you

Use your USP consistently across all marketing materials, from website copy to social media posts.

4. Set clear objectives

SMART objectives are Specific, Measurable, Achievable, Relevant, and Timely goals that help you track marketing success, a framework promoted by experts like Dave Chaffey, who was named one of the world's top 50 marketing ‘gurus’. Clear objectives show whether your efforts are generating results.

Track these key marketing metrics:

• Sales metrics: Revenue, profit, average order value
• Customer metrics: New customers, repeat purchases, customer lifetime value
• Engagement metrics: Website visits, social media interactions, email subscriptions
• Quality metrics: Customer reviews, referrals, brand awareness

5. Set your budget

allocation depends on your business stage and growth goals. Most small businesses invest between 1-10% of revenue in marketing activities, with one report finding the average marketing spending to be 7.9% of revenues.

Set your budget using these guidelines:

• Established businesses: 1-3% of revenue for maintenance marketing
• Growth-focused businesses: 5-10% of revenue for expansion. This range aligns with reports that show consumer-facing businesses spend more, with B2C services companies spending around 11.8% of revenue.
• New businesses: 10%+ of revenue to build awareness
• Experimental campaigns: Allocate 20% of budget for testing new tactics

6. Choose your tactics

Choose marketing tactics that align with your goals and budget. Focus on the Four P's framework to ensure comprehensive coverage.

Select tactics across these areas:

• Product tactics: Improve features, add services, create bundles
• Pricing tactics: Test different price points, offer payment plans, create discounts
• Placement tactics: Expand distribution channels, improve accessibility, add online sales
• Promotion tactics: Advertising, content marketing, social media, partnerships

7. Launch your campaign

Launch your campaign by executing your chosen tactics across the right channels. Successful launches combine preparation with flexibility to adapt quickly.

Execute your launch effectively:

• Choose relevant channels: Use platforms where your customers spend time
• Create appealing content: Match your message and visuals to audience preferences
• Monitor early results: Track performance within the first week
• Adjust quickly: Modify tactics that aren't meeting objectives

8. Track results and make adjustments

Track results by comparing actual performance against your SMART objectives. Regular measurement shows which tactics deliver the best return on investment.

Measure your marketing success:

• Monitor key metrics: Track the specific goals you set in step 4
• Calculate costs: Determine how much you spend per new customer or sale
• Identify top performers: Focus budget on tactics with the highest ROI
• Adjust underperformers: Modify or eliminate tactics that don't meet objectives

Return on investment guides future marketing decisions. Invest more in tactics that generate profitable results and reduce spending on underperforming activities.

Small business marketing ideas to try

So how do you put your small business marketing strategy into action? You will need some ideas. Here are 21 to help you get started.

Improve your product or service

One way to sell more products is to make them better. Find out how you can better fill your customers' needs. A survey is one way to do it. Focus groups or even a few casual chats are other ways. Or if you make goods, maybe go and watch how customers interact with them.

Run pricing experiments (up or down)

A pricing experiment could help you earn more revenue. Dropping your margin 25% might be worth it if you double your sales. Experiment in the other direction too. If you put prices up 20% and lose only 10% of customers, you're still going to make more money. Introductory pricing, or entry-level products and services can also grow your sales.

Bundle things

Bundling multiple related products or services together at a discount can increase the overall value of each sale and drive up revenue.

Work on your fee structure

Businesses can get more sales by helping customers spread the cost of purchases. An instalment plan might encourage more sales. Another option for service providers is to switch from hourly charges to a flat fee. Customers like the predictability of a known charge and, as a bonus, you automatically become more profitable anytime you get faster at your job.

Sponsor local teams, charities and events

Communities love supporting local businesses. Especially when that business supports back. Sponsoring an event isn't just about hanging a banner with your logo on it. The people who you enable want to reciprocate your goodwill.

Host events

Put on events for your community of customers and prospects. These could range from product previews to information evenings, depending on what your market wants. Start by asking them what they'd attend.

Attend events

Trade shows can be a great way to put your business in front of people who are actively looking for solutions like yours. Use the opportunity to check out the competitors, too.

Build a customer database

If it costs you, say, $20 to get a new customer then why wouldn't you sell to them twice? Or 10 times? A customer relationship management system (CRM) can improve the way you engage with customers after the first sale. Use it to record their interests, tastes, needs, and purchase history then pitch relevant new deals to them.

Create a loyalty program

Lots of retail businesses create clubs for their loyal customers, through which they offer discounts, special events, advice and any number of other perks. It can be a great way to make customers feel valued while keeping them engaged with your business.

Publish a newsletter

If you provide a knowledge-based service then you can share some of those insights in a newsletter. A good newsletter can be useful for customers while also promoting your expertise and helpfulness, which is great small business marketing. You may only need to send three or four a year and it can just be an email if you don't have time for design.

Open more locations

Opening new locations can be expensive, but they may give you access to a whole new market. There are also economies of scale. A second location can often be smaller, with most of your operations based out of the original shop, workshop, or office.

Offer delivery

Would people buy more from you if they didn't have to travel to you? Perhaps you can turn on more sales by offering delivery? It may be a simpler way to open up the placement side of your small business marketing without investing in a whole new shop.

Open online

You may be able to extend your reach (and hours of business) by opening an online shop. Retailers can start selling to out-of-region customers, 24 hours a day, without hiring front-of-house staff. Service providers can also find and serve clients remotely. Online can be especially effective if you offer niche products or services that people struggle to find in their area.

Partner with other businesses

Approach other businesses about selling your products or services. This is a well-known strategy for makers of products but it works with services too. A house-painting business might sell your landscaping services to their clients. Or a marketing agency might sell your design services.

Set up standing orders

Do customers sometimes buy less simply because they're slow to order? If you sell a product or service that needs to be replenished, then see how customers respond to the convenience of a standing order – where you automatically supply goods and services at agreed intervals.

Do a good job (word of mouth)

One of the best ways to get new customers is through your existing customers. When you meet or exceed their expectations, they are more likely to buy again and introduce you to their friends, family, and colleagues. Nail the basics of good products and services, but also figure out what little extra touches can help make your customers' day.

Ask for referrals

Ask existing customers to refer their friends, colleagues, and business partners. It sounds too obvious to work but it really does, and it's simple. What's even better is that customers tend to refer people who are just like them, so good customers send more good customers. You may even offer incentives or prizes for new referrals but you often don't have to.

Ask for a review or testimonial

In the world of small business marketing, nothing beats an endorsement from a real-life customer, though other factors can be crucial; for example, one study of a bakery found its physical location to be the most effective marketing component. Encourage them to post a review on your preferred review site. Even send them the link. If you have a really happy customer, perhaps ask if they'll give a testimonial for your website.

Give free advice

You (hopefully) know a thing or two about what you sell. That knowledge has a value of its own. Sharing your tips and insights can introduce you to new customers, or improve your connection with existing customers. A plant nursery can share gardening tips, a digital marketer can create and publish advertising stats, a furniture maker can offer advice on wood care. You can do this through in-person information nights, or you can publish insights in a blog or newsletter.

Make it easy for customers to find you online

It often helps to have a website (or even just a page) so people can find you online. Register (for free) with Google Business Profile to appear when people search for a local business. On your website, use keywords that describe your specific products or services, and your location as that will help you turn up in relevant searches. Listing your business in local online business directories can also help search engines find you.

Dive into digital marketing

You can try a lot of small business marketing ideas online. You can use blogs and content marketing to position yourself as helpful and knowledgeable. You can use search engine optimisation (SEO) to turn up in searches when people are looking for businesses like yours. Or you can run ads (although you really ought to be selling online for this to work). You can learn more about running low-cost experiments in this guide to digital marketing for small businesses.

Track your marketing success and manage costs

Small business marketing success starts with understanding your customers and systematically testing what works. The most effective approach combines strategic planning with consistent measurement and adjustment.

Track your marketing spend and results with cloud-based accounting software that connects to your bank feeds and marketing tools. This gives you real-time visibility into which tactics generate the best return on investment.

Try Xero for free to see how easy it is to monitor your marketing costs and measure campaign performance alongside your other business finances.

FAQs on small business marketing

Here are answers to a few common questions small business owners have about marketing.

What is the 70/20/10 rule for marketing budget?

The 70/20/10 rule is a simple guide for allocating your marketing budget. It suggests you spend 70% on proven strategies that you know work, 20% on new or emerging tactics that show promise, and 10% on completely new, experimental ideas.

What are the 5 C's of marketing strategy?

The 5 C's are a framework for analysing your marketing environment. They stand for Company (your strengths and weaknesses), Customers (their needs and wants), Competitors (who they are and what they offer), Collaborators (partners who can help you), and Context (the wider market environment).

How long does it take to see results from marketing?

This varies a lot. Some tactics, like online ads, can show results within days. Others, like building a brand or improving your search engine ranking, can take months. The key is to be patient and consistent, and to track your progress along the way.

What's the difference between marketing and advertising?

Marketing is the big picture. It includes everything you do to understand your customers and get your product or service to them, including research, pricing, and distribution. Advertising is just one piece of marketing; it's the part where you pay to promote your business through channels like social media, radio, or online ads.