Tuesday, 19 July 2011

The Importance of cost effective marketing for start-ups

What is an appropriate integrated Marketing approach for start-up?
I frequently meet with start-up entrepreneurs and,  in discussion or review of business plans often find that their focus on marketing is at either end of the spectrum, and only rarely calibrated to the maturity of the business. At one end “Marketing is not important for now and/or a very expensive activity with limited return” or “Marketing is so important we have 50% of our budget dedicated to a whole range of activities” and rarely is the Marketing Plan correctly supporting the business goals, aligned with the business maturity and integrated in a cost effective manner with the operational plan for the next period.
Firstly it’s important not to mix up market research with marketing. Market Research is a set of activities that entrepreneurs should complete before committing to a business and on a regular basis to make sure the plan and business remains relevant to the goals of the organisation. Marketing on the other hand, may have many purposes but I think there are two that start-ups should focus on;
·         Starting or building a brand
·         Generation of appropriate sales leads
I believe that marketing is the early stage in a process of creating a relationship with a client and feeding an input into a system and process that ends up with a happy client for the product and/or service the business offers and money in the bank.
1.       Brand: - In its simplest form it’s what do you want the market and individuals to think when they hear your name, your company name and/or product name: - Usually it’s one or more value judgments that are perceived as why you are different and why I should seriously consider buying from you.
2.       Leads: - A lead is any interaction from a prospective customer either proactively or in response to any intervention you may make in the market place that has the potential to convert to a profitable sale.
a.       A Marketing Lead is an input perhaps as a response to a marketing intervention that marketing checks out to see if it’s a real sales lead, if it is it gets promoted to the sales process for qualification , if not it gets returned to the marketing list.
b.      A Sales lead can come from many sources, its an indication there may be a prospect in or moving into buying mode. It needs to be qualified as an opportunity, ie  Is the customer buying?  Have they budget ? Is the timeline in the horizon?  Have we a competitive offer?  Once qualified the core sales cycle starts with a view to closing a sale.
When should new business start marketing?
If we consider the two primary goals of marketing above, then firstly we must have clarity on the problem we will solve for the client or the value of the opportunity we can bring to the client. We also must be able to supply the product or service in sufficient volume to meet the market demands that we might create. This does not mean we have to supply all features, functions or services we are planning to bring to market, however we need to be able to supply a defined limited set of these that address why the client has become a lead. For example if our business proposition is some form of social media Software as a Service underpinned by certain free features and upgraded to additional pay as you use features, then we must have available the basic software platform that as a minimum users see value in and will engage with and perhaps one or two of the planned pay for features. In time and with learning we may add all sorts of additional pay for features and revenue streams.
We also need to have a clear understanding of our core competence, core offering and how it is unique and different from the competition. What are the unique selling points that provide advantage over the competition and are different?
Beware of the following:-
·         It’s a new market, we have first mover advantage, and there is no competition. There is always competition and failure to have this mind set regularly leads to failure. It may be something very new and creating some new market segment, but the customer can always do nothing and not buy, also though there may be significant innovation and early advantage it will not be long before there are competitors if it’s a real market opportunity.
·         Beware of a long list of USP’s, it can dilute the message and brand. A good way to convey the message is a matrix comparing your product/service USP’s with those of your competitors, show what is common and show what is different.
·         Focus on your core defined, customer, offering and competence and identify the one major uniqueness that is your prime differentiator and will become part of your brand “The fastest, the highest Quality, The cheapest (beware of this one)..etc.
There are 2 major components of marketing:-
·         Content:- This is the core data and information required to support a marketing plan and program, it is the fundamental stuff , the messages, the details of your company, product/service, how you delivery, the value and propositions etc. There is equally as much investment and effort required here as there is in the actual marketing activities.  The source of this information is largely you the promoter and,  your team who are the subject matter experts.
·         Activities:- These are all the other activities, deliverables and plans that require a degree of professional experience and expertise and for start-ups usually require some level of 3rd party support.
What start-ups need to be good at is extracting the core content in a cost effective manner,  to be provided to the marketing professional who converts it into meaningful and useful content,  and activities that support achieving the marketing goals.
So in summary it’s important to have a marketing strategy and plan at the point you are going to market and ready to sell, and that the content is available for the marketing interventions.
Marketing is a process
Just as with any other process it’s important to make sure the various components and activities of the marketing process are aligned and integrated. I will use a few terms here, so for clarity I will explain:-
Marketing Plan:- 12 month operational plan designed to support the business goals. State what we expect marketing investment to deliver each quarter, have metrics weekly and quarterly. Project plan for the interventions.
Marketing Campaign:- Is a mini marketing plan that is more focused on shorter term objectives perhaps to launch a product, or target a specific segment, or to secure a reference in geography as examples.
CRM:- Customer Relationship Management is the process whereby we record and manage details of our relationship and engagement with our potential customers and customers.
Marketing Lead:- Details of any Target customer and related future opportunity if any in whom we have identified and we want to create a relationship. Marketing Leads come together as part of our core marketing lists we use for campaigns and interventions. They are extremely important because regardless of how many sales calls we make or promotions to the market only a small number of potential clients will be in buying mode (i.e. in or about to enter a buying cycle), those that we identify as in buying mode go straight into our sales process as a lead. The majority will not be in buying mode and what we want to achieve is to regularly communicate and keep our value proposition in their consciousness so that when they do go into buying mode they will contact our company.
Marketing Lists:- These are specific target customer and customer details that may be categorised for specific campaigns and interventions relevant to their specific segment.
Marketing Intervention:- These are the specific actions or activities we have identified as having the maximum impact on achieving our marketing or campaign goals. They are like a menu of ingredients we can bring together to achieve specific marketing goals.
·         Events (Seminars, Conferences, Breakfast sessions)
·         Forums (Customer focus groups, advisory panels, etc.)
·         Web platforms and sites
·         Advertising
·         Sponsorship
·         Trade Association engagement
·         PR
·         Collateral – Brochures, White Papers, Case Studies, References
·         On-Line engagement, emails, blogs, wikis, social media, webinars
There are many different types of marketing interventions and you must select those interventions that are relevant to your business. Beware of stand-alone interventions. I have seen so many company seminars, where the whole focus is on the event itself, planning the session, getting the invites and confirmations, running the event and looking at what contacts were made on the day. This is an approach that fails to maximise ROI on the investment in that event. A more effective approach is as follows:-
·         The event itself must have goals and fit with the annual marketing plan.
·         The event itself requires a marketing plan
·         The process of managing attendees is part of relationship development, maximising the value they get from attendance. Have a plan for engagement with each attendee.
·         Seek as much feedback and engagement in the topic and the event
·         Immediately on completion of the event have a round table with all participants so that all leads, opportunities, suggestions can be considered and actions followed up.
·         Announce the next related event or intervention at the event
·         Update web site, social media sites within 24 hours
·         Feed everything into the core processes, sales, marketing, delivery etc.

The Sales & Marketing Pipe line and integrated process to be managed
A Sample Marketing Model
This is a model I have used in the past, it’s primarily designed for an ICT professional services company, however it’s a way to try visualise how you can make things fit together. The core of this model was to have a content rich Web site at the focal point and to use as many interventions as possible to drive traffic to the web site. The website is key for capturing potential customer information, for inclusion as a Marketing Lead, Sales Lead or Sales opportunity. In addition the details can now be included on the organisations marketing list to start building the relationship (with the potential customer’s permission).

Managing Marketing in a start up
The key is plan performance and measure performance and do this in a way that is integrated with your standard operational management processes. As you would review Sales, Delivery, Development, Finances weekly, monthly and quarterly make sure you do the same with marketing.
Keep track of interventions and response to interventions:-

Marketing can also track the marketing and sales pipeline drawing the raw data from CRM or whatever spread sheet it is being tracked on:-
Tips for controlling start-up marketing costs
·         When preparing content prepare it in a way that can have multiple uses.
·         Re use content, for example a case study or white paper, can be a paper for a speaking engagement, can be a piece in an e-zine, can be collateral on the web site, can be a proposition for social media engagement.
·         Engage with key trade and state organisations , they provide opportunity to communicate and network with target markets.
·         Sponsor and participate in the events of others can be more cost effective than organising your own event.
·         Leverage open source and also freemium IT/web applications, you can build your own web site for free, social media groups are free to join and contribute.
·         Engage a really experience Marketing professional to advise and oversee the program, 1 or 2 days per week/month can deliver much higher value than hiring a graduate.
·         Measure impact of interventions and quickly stop doing those that do not deliver a return.
·         Don’t start with big brand suppliers of related services, they are good but expensive. There are many one man bands and small companies that would deliver appropriate expertise and services at lower costs.

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