Essentials of Startup Marketing Strategy, Part 1: Traffic University Panel
October 13th, 2014 by Brian Posnanski
What is the most effective way to market the modern-day startup? How can you follow a “lean startup” methodology to achieve success through (predominantly) digital means?
Traffic University convened a panel of digital marketing experts to consider these questions and talk about the vital strategic underpinnings of startup marketing success. The panel started with one basic assumption: that all startups are pressed for resources and time, and must get to customers and revenue as fast as possible to counter cash burn.
From there, our panel focused on the marketing disciplines most impactful for startups, including content marketing/, online lead generation, agile marketing and measurement. In fact, if one dominant theme comes to the fore, it’s measuring results to make sure any given marketing tactic is effective. Tactics are known and available to everyone. Using those tactics effectively separates the winners from everyone else. Hence the panel’s exhortation to measure your marketing, “every aspect of it.”
We were fortunate to have insights from some of the best digital marketers we know:
- Ed Morrissey, an award-winning designer and technologist who owns Integrity Web Consulting, one of the largest privately held web agencies in St. Louis
- Travis Arnold, the founder of Harbinger Labs, which works solely with software companies to help them attract the right customers through digital means
- Russ Henneberry, director of editorial at Digital Marketer, and a veteran who has worked on digital marketing strategy for dozens of companies including Crazy Egg and salesforce.com
We gathered eight key takeaways for startup marketing strategy from our panel. In this first of two posts, we highlight the first four. Read on! You also can listen to the full 90-minute startup marketing panel as a podcast or read the entire transcript.
Fair warning: If you’re looking for a startup marketing roadmap, or even a magic bullet, you won’t find it here. Our Traffic University panel offers something better — the architectural knowledge to build the foundation of startup marketing success.
Listen to the Startup Marketing panel podcast.
Download the complete transcript of our Startup Marketing panel.
Start with the Product.
“Make sure you have a product that clearly and easily solves a problem.”
— Ed Morrissey
Absolutely number one, but so often overlooked, is the quality of the product or service you are offering.
Start with the simplest question: Are people excited about your product? You don’t need to spend a gazillion (or even a few thousand) dollars on focus groups to tell you if you’ve got a winner. Share it with people. Show it to people. If you’ve got an online product, spend a little money for in-depth reviews from real people. Especially if it’s a software product, spend money on the product itself. “If you’re building a product, if you have the option of strategically influencing the product itself, start there,” says Ed, who adds that startups have to BE the product they are promoting, because in the era of social media, people will find out quick if it’s not.
That’s where great marketing starts — solving a problem so well that you get people to tell their friends, family and colleagues about it for free.
Understand Who You Are Marketing to.
“Who are you selling the product to? It really boils down to that. If they have a need, you want to put your product in front that need, and you have to understand what that need is, you have to understand who that person is.”
— Travis Arnold
One of the most essential aspects of successful startup marketing strategy begins with your customer. And that means not just knowing the market opportunity for your product, the demographics of your customer segment, or the title or internal company roles your prospective buyer might have. It means digging deeper, and getting in their head and working to understand their hopes, fears, aspirations and pain points. Don’t be afraid to have those conversations directly with customers, or to enlist your sales, executive team or even a third party research firm to help you discover what it is that your buyer truly cares about. Travis suggests the best way to do this is to find and talk to potential buyers who are not familiar with your company.
As Peter Drucker says, the purpose of a business is to gain and keep a customer. Knowing who they are and why they would buy from you (or not) is the first essential step.
Know What a Customer is Worth to You.
Don’t misplace your focus on “soft metrics” by worrying over the growth of your overall website traffic or social media communities. What is a lead worth to you? What do you need to do to profitably generate a customer?
“We work with very mature clients all the time, large corporations,” says Ed Morrissey. “They come and say, ‘I’m spending $50,000 a month driving traffic to this site.’ I’m like, ‘Well, is it working?’ They’re like, ‘What do you mean?’ I say, ‘Well, what is your goal?’ They’re like, ‘To get leads.’ I say, ‘Well, how much is a lead worth?’ ‘Oh, we don’t know.’
Because most companies don’t go to the trouble of knowing how much a lead or sale is worth to them, their marketing budget fails to address how to consistently and profitably create a paying customer. “If we have a model where I can spend $10 to get a user to convert and that’s worth $50 to your company, how much would you spend?,” says Ed. “Forever, right? You would do [spend] forever.”
Another way is to think of it is that there are different types of leads. For instance, what is the cost to get someone to a 14-day free trial, and how many free trials do you need to have before you get to paying customers? If one million visits equals 10 customers, as Travis points out, “it might be time to switch things up.”
Russ adds that in addition to knowing what a new lead is worth to you, it’s useful to focus on what a single visit to a single page on your website is worth to you. If you can get to that number, you can then back in to how much it is to get people to that page. You may discover that spending 50 cents per click is too much, but 25 cents is profitable. This is important because no traffic source is free. “You’re either going to have to expend energy, or time, or money, or resources on SEO and things that people call free, or social media.” How quickly are you going to burn cash generating visitors or getting leads to become conversions?
Russ also notes that well-funded startups with cash often like to focus on lifetime customer value. But “unless you have a giant pot of cash to burn, lifetime customer value can be a tricky and sometimes useless metric.” Make sure you’re driving traffic for near-term value.
There’s No Magic Bullet When It Comes to Getting Leads.
Every company is different, and there is no tried and true “magic bullet” to obtain users or customers. Try a lot of things and measure them. The more you do, the more you know. The panel agreed that paid search is one of the best ways to accelerate time to discovery in terms of what works and what doesn’t. With paid search, you can use it to cast a wide net and you’ll start to see “hot spots” of where buyers come in the door in terms of keyword searches, content or offers that are resonating. “If I want 50 leads for my company as quickly as possible, and money is not necessarily an issue,” says Ed Morrissey, “That’s paid search.” But that effort should be well planned and well managed. “You can produce enough leads with enough money, but you can drop $20,000 really, really quickly (if you have that budget), with no guarantee those leads will convert,” says Travis.
Check out Part 2!Tags: startups