Answer from Peter Bray, CEO at Bray & Co
Time and again, I see start-ups create really, really bad marketing. I say this as someone who used to run big agencies and now works heavily with start-ups.
Marketing is behavioral science, which separates the good campaigns from the bad. For example, what will people remember more: Losing $50 or finding $50? If you don't know the answer to this, then you shouldn't be the person who creates marketing campaigns for your business. If you can edit a video, that doesn't mean you can create a marketing campaign. A graphic designer is not a marketer. If you can place Google AdWords ads, do you really know what triggers to use to elicit action?
The irony is that I come across a lot of start-ups that are so focused on minimizing costs to the point where they don't realize they’re costing themselves much more by producing media instead of advertising. Marketing strategies are not just how and where you spend; they’re what you say when you spend. The emphasis needs to change from cost to value. The key point is that average marketing activities severely restrict growth. It stuns me to see so many start-ups that don't have a qualified (read: NOT a "social media expert") marketer on their board.
So, which is it: finding or losing the $50?
I think you will find there are plenty of marketers who will show a method that works for a smaller fee -- provided there is upside. I always suggest that clients talk to a consultant’s previous clients before hiring that person.
Marketing isn't about knowing how to buy or make media. Marketing is about having an understanding of human behavior -- of emotional triggers.
- Is it worth using colors that cause certain feelings within viewers? Yes.
- Is it worth understanding what status quo bias, chunking and nudging are so you can have better campaigns that work harder? Yes.
- Is it worth knowing in advance what messaging will work without having to go to the expense of conducting extensive AB testing? Yes.
- Would I pay any expert not for a few hours of their time, but, rather, to gain access to their 20 years of experience? Yes.
You aren't buying hours with an expert; you are leasing their career. You are paying a fee to avoid the mistakes they’ve already made.
Here are the 5 marketing facets that start-ups must master
- Pay attention to retention (and not just to customer acquisition)
It is all very well to focus on getting your CPA down, but if you aren't maintaining a great retention rate, then you’re in trouble. Great start-ups understand that these two areas need to work in parallel, and that you should have a retention strategy from the day you land your first customer.
- Speak in terms of value, not cost
Yes, all start-ups want to keep their churn down, but great start-ups understand that going for the cheapest option every time doesn’t always make sense. It is often interesting to see how many people want low costs, in terms of talking about value. Investors want you to maximize the leverage of their investment, which means maximizing the efficacy of every dollar in a relatively short time span. Investors hate seeing lazy money sitting in the bank because a CEO was not prepared to maximize value. On a side note, very few investors would prefer their investments to slowly bleed dry rather than find out early if they’re winners. Time costs money.
- Think early on about reach
For many start-ups, AdWords is a great place to start to acquire customers. But, over time, this strategy may become prohibitively expensive, or you may fail to realize the volume you’re after. In this situation, you need more reach.
In my experience, online video is superb for acquisition purposes and to extend your reach. Regardless, you need to have a multichannel strategy from day one. That way, your business is protected if a party like Google changes the rules.
- The big truth about social media…
I am fortunate to have broken the one billion view mark over the years, which was due to my client’s acumen more than my own. Over this time, I have developed a golden rule: If you want to maximize your social media, then you need to pay for it.
It is foolhardy to build a marketing strategy on sharing and discovery. It is too slow and too risky. After all, there’s a ton great content out there, but what good is it if no one sees it? And why should you spend money to produce a campaign if no one sees it? The big brands are just as guilty of this mistake.
If you want to maximize your return on investment from the content you create, you need to allocate a media budget. This is such an important rule, yet it’s often neglected. Just having a creative budget without a media budget is a novice mistake that you don't need to make. Budgets should be determined on a case-by-case basis, but some people use a 30/70 ratio of creative and production to media. If you don't have paid media in your marketing plans, you need to change that as soon as possible.
- Understand your brand
This is critical and directly impacts your CPA and more. A question I often start with is if your brand was at party, what would they be wearing? This may seem like a strange question, but it is a great starting point. Does your brand reflect your customers and who you want to be? Will people want to get to know your brand?
Be honest with yourself. If your brand is wearing a brown cardigan at a cocktail party, then you have some work to do. Your brand matters, and there are direct financial consequence if you get it wrong.