Deciding how to allocate time and resources is a difficult process for any business -and it’s even harder for start-ups. But of all the allocation decisions to be made, there’s none more difficult than marketing.
Promote your company too little and you’re almost certainly doomed to fail. Promote it too much and you’re squandering dollars that might be better spent on R&D or preparing for a fundraising round.
As you consider your marketing strategies, here are five things you can (and should) avoid. Some may sound appealing on paper, but they don’t contribute much, if anything, in the early stages of your company’s life.
Bloated Marketing Requirements Documents (MRD) - How often have you been a part of a team that produced a 30 page MRD with detailed specifications for your product before you have even tested your product concepts, validated the customer need and verified your pricing assumptions? It happens more often than you think.
The primary goal of a startup is to identify and meet a market need with a product or service that can be profitable. Spending inordinate amounts of time on detailed MRDs without frequent customer interaction not only wastes the time of the product manager and colleagues who review the document, but it can point you down the wrong product development path, which can be a fatal misstep.
Direct mail lead generation - Direct marketing is well on its way to extinction for startups, but there are still a number of direct mail service providers trying to keep this medium of lead generation alive.
Email campaigns typically have a sub-1 percent response rate. “Snail mail” direct marketing is inordinately expensive. In either case, these programs rarely justify the time, financial expenditure and effort required. And even when you do get a response, you end up spending additional sales dollars as you’re forced to wade through the inevitable unqualified leads that come from the large databases required to make these programs work.
Analyst subscriptions - A subscription to a premium analyst service like Gartner Group can run upwards of $30-$40k per year. Very rarely do these services pay off for a startup.
Many companies sign up simply hoping the subscription will result in more favorable reviews by the analyst. While this can sometimes be the case, it’s pretty infrequent. You’re better served developing a relationship with key analysts.
This doesn’t mean you should avoid analyst paid services all together. Engaging an analyst for consulting on product direction and business development input is often very helpful in refining your product and business strategy. Independent ROI case studies like Forrester’s Total Economic Impact can effectively communicate the value your product brings to your customers.
Branding, advertising, and trade show sponsorships - Beware of spending any time or money on services whose stated objective is creating “buzz” or “brand awareness.”
In the vast majority of cases, brand awareness is a byproduct of a successful business that listens to its customers and creates great products. Sponsorships aren’t cheap and they’ll drain your early stage capital with very little tangible return.
Detailed sales PowerPoint presentations - PowerPoint presentations can be tremendous tools when presenting at a conference or in front of a large audience, but for startup sales meetings they are often counterproductive.
Too much time is spent crafting, refining and training your team on the perfect presentation. The inherent problem with PowerPoint for early sales situations is that it favors one-way communication.
Startup sales meetings should be as much about listening as presenting. Slides should only be used to communicate concepts that don’t lend themselves to a conversation - like graphics, charts or illustrations to enhance understanding.
Instead of long presentations, startup sales meetings should be collaborative and conversational with the following objectives:
Validate your customer problem
Explain and demonstrate your product
Establish your credentials
Validate your pricing
Listen, listen, listen
If you’re in the early stages, you should be saying ‘no’ to far more marketing projects than you say ‘yes’. Focus your efforts on helping ideal customers find your company, enhancing and refining your product to create value and address real problems, and communicating effectively through a variety of mediums.
Marketing departments should be held accountable for the ROI they bring to the company - and should be stingy about how they spend their time and budget.