Street Fight’s new analysis, The Urban SMB Report, indicates that local business owners in big cities get better results from their digital marketing efforts by not doing it themselves. The more they outsource, either to internal staff or to an agency, the higher their satisfaction rating. But there is room for improvement.
In order to better understand how well digital marketing tactics are working for these merchants, and how they manage them, Street Fight partnered with ProspectWise to do a series of brief face to face interviews with 241 small business owners and managers in the greater Los Angeles area. The merchants were a mix of consumer services (including health and beauty, automotive, dry cleaning, etc.), retailers, and food and beverage. To ensure a density of coverage, we focused on that one locale, but we believe the results are directionally indicative of nationwide patterns in urban areas.
In our study, as shown above, we found that the vast majority of local small businesses do their digital marketing themselves or with a small internal staff – usually one or two people at most. Only one in ten uses an outside agency. While this may be due to a lack of budget, further analysis shows that self-management has a negative impact on effectiveness. These overworked managers could be doing better.
We asked those local managers how satisfied on a scale of 1 to 10 they were with their digital marketing tactics (social media marketing, their website, and search marketing). We asked how they rated each tactic in terms of its success in attracting new customers and in increasing actual sales. Then we mapped those satisfaction scores against how they said they managed each digital marketing tactic.
We found a direct correlation with digital marketing satisfaction and offloading the work, regardless of objective. Managers with an internal marketing team were more satisfied than those that did it themselves, and if they use an agency, the results were even better. The urban local businesses that use an agency rated their satisfaction well over two-thirds higher in acquiring new customers and nearly three-quarters higher in generating sales than those who managed digital marketing themselves. Similarly, although less pronounced, agency users were about one-fifth more satisfied with both results than those who managed digital marketing with an internal team.
Adding staff appeared to offer the highest improvements in satisfaction, regardless of tactic or objective, compared with working with an agency. But taking that next step and hiring an agency produced the absolute most satisfaction.
Agencies seem to offer the most value, in terms of increased satisfaction, in managing search for both objectives, and with site management for increasing sales. Although they’re still helpful elsewhere, agencies did less to increase satisfaction scores in social media marketing, especially compared with just adding internal staff.
David Card is Street Fight’s director of research.
Click here to download a copy of the Street Fight Insights report, The Urban SMB Report: Satisfaction with Digital Marketing Tactics and Management Strategies.