“Your Brand is what other people say about you when you’re not in the room.” Jeff Bezos, CEO, Amazon
Getting Ready for Growth
One of the key stumbling blocks to growth, is that without a well-defined brand, a startup can’t build a sustainable company culture so when the time comes to grow, it’s much more difficult to attract top talent. Understanding who you are as a brand and who you are not, is part of the early days of brand building but too often, founders skip this essential step and start selling (marketing) before they’ve identified what they are selling (competitive advantage) and who it matters to (ideal customer).
So, where do you begin the process of building a brand when you’re a startup? Most founders believe that their startup will figure out their culture and build traction as they get bigger, and that marketing is something they will get to when “they can afford it.” The problem with “being ready” for marketing, is that it’s a lot like being ready to have a baby. There’s never a good time to have one, and there’s always a good reason why you can’t.
I believe that founders are asking the wrong question. It’s not “when you’ll be ready for marketing” but “what you need to do now,” so you’ll be ready for marketing when it’s time to scale your business.
Marketing is Not a One-Size Fits All
When most business owners think of marketing, they think in terms of advertising and PR, the tenets of traditional marketing, which doesn’t work for startups. By its very definition, startups are still defining their product while searching for a target market. It’s hard to promote something that you aren’t sure about yourself or track customer engagement when you’re talking to everyone.
Steve Blank, the iconic Silicon Valley serial entrepreneur and the man who launched the Lean Startup Movement, puts it simply and eloquently: “Startups are not just a smaller version of a larger company” but an entirely new kind of system. According to Blank, a traditional business plan will be obsolete within six months and so will a traditional marketing plan.
Traditional marketing also requires a significant investment that is typically out of reach when you’re launching a business. Anyone who’s ever considered running a TV spot during the Super Bowl, understands how prohibitive advertising can be; and unless you have $100,000 a year to spend, media buys are a waste of money. It takes on average, seven times to become aware of an ad and that’s before you’ve even read it. It’s a numbers game that only established brands can afford to play.
Word-of-Mouth is Not Marketing
We are all familiar with the elusive “word-of-mouth” referral, touted by founders as the Holy Grail of marketing. Once they start getting referrals, founders believe that they don’t need any other type of marketing. In working with dozens of startups, I have found that the success of a “word-of-mouth” strategy is in direct proportion to the amount of work done by founders to establish their value proposition. This lays the groundwork for relevant messaging and a memorable elevator pitch that sets you apart from your competition and attracts the right customers. Too often, the elevator pitch is really a sales pitch that can quickly shut down a prospective customer. The right elevator pitch should help me quickly understand what you sell and how I can benefit from working with your company. If I’m not the right customer, all the better since it will save you months, chasing after the wrong customer. When startups miss this critical step, messaging turns to generic content which translates into a website that fails to convert visitors into warm leads and increase sales. Ironically, the lack of targeted marketing reinforces a founder’s bias that marketing doesn’t work.
Social Media is Not Child’s Play
For those of you who consider social media irrelevant, consider this: there are roughly 2.1 billion people on social media every month, with 1.5 billion on Facebook and 1B active YouTube users. There are currently more than 500 social media sites but if you focus on your ideal customer, managing social media becomes much easier to manage and scale. Instead of chasing the next social media platform “du jour,” go on the sites that your customers are posting on, learn what they care about and engage with them with relevant content.
Get to know top bloggers and influencers in your industry and follow them on Twitter. Contribute to online conversations where you can demonstrate your expertise and build recognition as a thought leader. As you start to build followers, it adds to the perception that your startup is growing into a brand. Remember that on average, each follower has 200+ in their network so every new connection can turn into thousands of potential brand ambassadors.
Social media is critical in the early days of your startup so resist the temptation to relegate this to an intern. During the first couple of years, it’s the founder who should be providing the content to make sure that their startup is generating the right kind of buzz. Once you have your story and key messages in place, you can hire an intern to keep your social media platform fed on a regular basis.
The ROI of Marketing
Marketing is not a widget. You can’t apply COGS thinking (cost of goods sold) to come up with what your profit will be. Marketing, like technology, is an investment that your company makes in its future success. The accepted rule of thumb is that successful marketing requires an investment of 10% of gross revenues in established companies and 15% in startups. In 2017, Nike was valued at $34.4B and spent $3.4B in marketing. That’s why they are still the #1 sports brand in the world.
Spending 0% of your gross on marketing doesn’t save you money because your spending pie will always be too small to invest in marketing. As a result, your sales funnel will take years to gain traction and in 5 years, you’ll still be wondering why no one knows who you are or what you do.
Instead of waiting to start until you can afford traditional marketing, build a “lean marketing” tool box. Start with your vision—why you decided to start your business in the first place, create relevant messaging that engages your early adopters, and instead of trying to engage with everyone, build a website that speaks to your ideal customer, and identify 1-2 social media channels where you can engage with them.
The longer you wait, the harder it will be to grow into a brand and establish a sustainable company culture.
Orly Zeewy is a brand architect and Facilitator of Lightbulb Moments based in Philadelphia. Before starting her consulting practice in 2001, she ran an award-winning marketing communications firm for 14 years and worked with national clients such as Cigna, Kraft Foods and Prince Tennis. In addition to helping startups cut through the noise, she is a public speaker and teaches at Drexel University and Ithaca College. She is currently writing a Lean Marketing Guide for Startups.