How Public Relations Strategies Level the Playing Field for Small Businesses Vs. Corporate Giants
In today’s highly competitive business landscape, small businesses face numerous challenges when it comes to gaining visibility and establishing a positive market reputation. While advertising has historically been a go-to strategy for building brand awareness, the rise of ad fraud and ad blindness has shifted the focus towards alternative approaches, particularly the increased use of public relations (PR).
While still valuable in some situations, traditional advertising methods are no longer as effective as they once were due to factors like ad fraud and growing ad blindness. As a result, I advise my small business clients to consider shifting their marketing focus away from paid ads and towards public relations opportunities, to create free or low-cost positive publicity for their business.
Public Relations and Politics
When a candidate decides to run for public office, there is a limit on how much money they can raise from donors. In fact, accepting money from big donors often signals to voters that they are bought and paid for by special interests, which turns off many voters. In a recent election in my hometown, two career politician candidates for mayor took money from large corporate donors. They lost the election to a relatively unknown independent and political newcomer, who made it clear, through public relations, that he would be the people’s mayor and beholden to any corporate entity.
Because raising money to fund campaign advertising takes lots of time and can make it look like you are beholden to special interests, most politicians prioritize generating earned media coverage and fostering word-of-mouth discussions as crucial elements of their public relations strategy. This approach enables candidates to effectively capture voters’ attention without having to resort to paid advertising and the baggage that comes with some donors.
By strategically engaging in actions and making statements that attract media attention, candidates keep their names circulating in voters’ minds, recognizing that what others say about them is more significant than any self-promotion.
Like him or hate him, Donald Trump is the master of public relations. There is not a single day that has gone by since he first announced his candidacy to run for President of the United States, way back in June of 2015, without at least a dozen articles related to Donald Trump each day.
What is Public Relations
Public relations refers to the strategic communication and relationship-building efforts undertaken by businesses to create a positive image, establish credibility, and generate favorable publicity. It involves managing and influencing the perceptions of various stakeholders, including customers, media outlets, industry influencers, and the local community.
In the context of small businesses, public relations focus on activities that enhance brand reputation, increase visibility, and foster strong connections with target audiences. This may include crafting compelling narratives, engaging with the media, participating in local community events, leveraging social media, managing online reviews, seeking endorsements from satisfied customers, and building authentic relationships with consumers to shape public perception and influence customer behavior.
Public relations strategies for small businesses aim to generate organic publicity, build trust, and cultivate a loyal customer base. It aims to create positive conversations and word-of-mouth recommendations, ultimately driving business growth and success.
Small businesses often have limited resources compared to larger corporations, so public relations strategies for small businesses are often far more cost-effective and focused on targeted marketing efforts. These strategies aim to maximize visibility within specific local markets, niche industries, or online communities where the business operates. By effectively utilizing public relations tactics, small businesses can differentiate themselves, establish credibility, and position themselves as trusted and influential businesses in their respective markets.
Understanding the Difference: Public Relations vs. Advertising
Public relations and advertising are two distinct marketing practices with different objectives and methods. Advertising involves the use of paid promotional messages – money that most small businesses do not have – aimed at a target audience.
Public relations, in contrast, focuses on building relationships with various stakeholders, including the media, customers, and the community. Unlike advertising, PR relies on earned media coverage and word-of-mouth endorsements, making it a more organic and credible approach to gaining publicity.
Large companies with substantial budgets often employ advertising as a primary marketing strategy to create a brand message and facilitate the sales process with retailers. They focus on building brand awareness, positioning their products or services in the market, and influencing consumer perception. However, most large companies do not sell directly to the consumer but use retailers or affiliates.
On the other hand, most small businesses tend to sell directly to consumers, making the dynamics of advertising differ significantly. Let’s explore the contrasting approaches and why advertising may be a less valuable strategy for small businesses.
Brand Message and Retail Support
Large companies invest heavily in advertising to establish a brand message that resonates with their target audience. They create campaigns that promote the brand’s values, lifestyle, and emotional connection to the consumer. This branding effort aims to make it easier for channel partners, such as retailers, resellers, affiliate organizations, etc., to sell their offerings by generating consumer demand and ensuring a positive brand perception. Channel partners are more inclined to market and sell a large company’s products or services if they have a strong brand presence and consumer recognition.
For example, most large product-based companies like Coca-Cola do not sell their product directly to the consumer. Instead, they rely on channel partners such as supermarkets, convenience stores, restaurants, etc., to sell their products. Likewise, many service-based companies such as Anthem or Humana do not sell insurance directly to the consumer and rely on affiliates who earn a commission by selling the policies to the consumer.
In contrast, most small businesses have a more direct relationship with consumers. They often sell their products or services through their own channels, such as physical stores, e-commerce platforms, or local markets. Since they have direct control over the customer experience, small businesses can focus on building personalized connections and delivering exceptional customer service directly to the consumer. This direct interaction allows them to cultivate customer loyalty and rely less on the brand message delivered through advertising.
Targeting and Reach
Large companies with significant advertising budgets can employ various media channels to reach a broad audience. They can afford television, radio, print, and online advertising, which helps them target specific demographic segments and geographical regions. These broad-scale campaigns aim to capture market share, establish dominance, and influence consumer behavior.
Targeting a specific niche or small local market is often more effective for small businesses. They have limited budgets and resources, making it challenging to reach a broad audience through mass advertising. Instead, they are better served by focusing on targeted marketing strategies such as local SEO, social media targeting, content marketing, and influencer collaborations. Small businesses can attract and retain customers more effectively within their target market by narrowing their efforts and tailoring their messages to a specific audience.
Cost Efficiency and Return on Investment (ROI)
Large companies can afford extensive advertising campaigns, including costly media placements and celebrity endorsements. While these efforts can generate widespread exposure, they often involve a significant financial investment. Remember, these companies aim to achieve brand recognition and influence consumer perception, ultimately driving sales through channel partners.
For small businesses, allocating a large portion of their budget to traditional advertising will not yield the desired ROI. To ensure effective advertising, prospects must be constantly bombarded with ads to penetrate the buyer’s conscious mind in what Dr. Jeffrey Lant calls the ”Rule of Seven.” As a result, small businesses need to be more strategic and cost-effective in their marketing efforts. Small businesses can maximize their limited resources and achieve a higher ROI by focusing on social media engagement and local promotions.
Customer Engagement and Relationship Building
Because of their size, large companies often face the challenge of establishing direct relationships with individual customers. While their advertising campaigns can create brand awareness and recognition, the personal connection between the company and the consumer is often diluted. This is where small businesses have a real advantage.
Small businesses can engage directly with customers, build personal relationships, and foster loyalty. They can provide exceptional customer service, respond to feedback promptly, and adapt their offerings based on customer preferences. This direct engagement creates a sense of trust and loyalty that advertising alone cannot achieve.
So, while large companies with substantial budgets rely on advertising to create brand messages and facilitate sales through channel partners, small businesses have unique advantages in selling directly to consumers. For small businesses, focusing on personalized customer experiences, targeted marketing strategies, and building strong relationships can often yield greater results than investing heavily in traditional advertising.
The Declining Power of Advertising
Advertising has lost much of its effectiveness, especially for small businesses, due to the rise of ad fraud and growing consumer ad blindness. Ad fraud refers to the deceptive practices that inflate ad metrics, resulting in wasted advertising spend. Additionally, consumers have become increasingly adept at filtering out or ignoring ads, leading to reduced engagement and effectiveness. As a result, businesses must adapt their strategies by focusing more on public relations opportunities to garner positive publicity organically.
The Power of What Others Say
In an era of information overload and skepticism, what others say about your business holds more weight than self-promotion. People rely on the opinions and experiences of others to make informed decisions. Positive word-of-mouth and online reviews can significantly influence consumer behavior and shape brand reputation. Small businesses must prioritize building and maintaining a positive reputation by fostering genuine customer relationships, encouraging feedback, and actively engaging with online communities.
Conclusion
In today’s competitive business landscape, small businesses face challenges in gaining visibility and establishing a positive reputation. Although effective in creating awareness for channel partners, traditional advertising is less suitable for small businesses with limited budgets that sell directly to consumers. Shifting the focus to public relations offers a more advantageous approach. PR enables small businesses to generate free or low-cost positive publicity, build credibility, and foster direct connections with target audiences. Unlike advertising, PR relies on earned media and word-of-mouth endorsements, making it a more organic and credible strategy. Small businesses can benefit from personalized customer experiences, targeted marketing, and strong relationships, maximizing their limited resources. By prioritizing PR over advertising, small businesses can create awareness, establish trust, and directly cultivate a loyal customer base.
Are you using public relations effectively in your business?
