Marketing

At the most fundamental level, marketing is the process of creating and keeping customers.  Peter Drucker said that “Marketing is the distinguishing, unique function of the business.”  Marketing also happens to be one of the hardest things to get right in business, making it a common startup killer.  Think about the thousands of amazing products and companies that didn’t survive because they couldn’t figure out how to get customers.

Your product can have winning differentiators, but so can your marketing strategy.  Undoubtedly, marketing should be as important to your startup as product development.  It’s where the rubber meets the road.  This chapter will show you quick and effective marketing strategies designed specifically for cash-strapped startups.  Learn how to position your company, write copy that sells, and why creating two versions of the same product can be a winning strategy.

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Promise…Then Over-Deliver

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The way you communicate and interact with potential customers create an unspoken promise.  Whether it’s through advertising, packaging, or customer service, your communications let customers know what to expect.  Marketers call these expectations your “brand promise,” and every company makes a promise in one form or another.  Understanding and intentionally communicating your promise is an important first step to create your brand, differentiate your offering, and forge a strong relationship with customers.

Typically, a brand promise is communicated internally and experienced externally, but some companies also make their promises their taglines.  While there’s no single formula to a winning brand promise, make sure you at least convey who you are and what you stand for.  Think Ritz Carlton’s “Ladies and gentlemen serving ladies and gentlemen,” or FedEx’s “When it absolutely, positively has to get there overnight.” Keep it short and impactful, and avoid generic or meaningless wording.

Your brand promise must set you up for success in the long run, so don’t make promises you can’t keep.  The best way to build brand equity is to over-deliver on your promise and surpass expectations.

The Secret to Writing Copy That Sells

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It’s not easy to write killer copy.  Whether you are writing for your website, packaging, or an advertising campaign, writing copy that sells can be unexpectedly challenging.  Realize we’re talking about copy that sells, not necessarily great copy.  You might find that short, terse sentences sell much better than poetic, profound paragraphs.

The secret to writing copy that sells is to get inside the head of your ideal customer.  Write from the customer’s perspective.  To do this, ask questions – What do they care about?  What do they not care about?  What causes them to buy?  What inspires and frustrates them?  Some marketers go so far as to create “personas,” which describe their ideal customers in excruciating detail.

Knowing how your target customers think and feel will allow you to view the buying decision from their perspective. You’ll be able to understand why certain benefits resonate with customers more than others, and how to influence them more effectively. You will be able to properly frame your benefits and clearly articulate how you’re different than the competition.  See the world from your ideal customer’s perspective to write copy that sells.

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Be a Guerilla Marketer

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Guerilla marketing is a catchall term used to describe unconventional marketing tactics.  Guerilla marketing is a cost-effective way to be different and get the word out, which is why a lot of entrepreneurs are guerrillas at heart.  Advertising is expensive. To put it in perspective, a one-page ad in most mainstream magazines can cost over $60,000.  Even if you could afford this, it’s probably not the best way to invest your marketing budget.  Get creative and be different instead.

Guerrilla marketing tactics are great for any size company.  To help determine feasibility, you might rent a mall kiosk over a weekend or set up a trade show booth to see if there’s enough demand for your idea.  Contests with fun, whacky prizes can be a great way to get people engaged.  Even bigger companies can get in on the action.  Red Bull’s marketing strategy has a distinctly guerilla feel to it.  They create and promote insane stunts and events, and get worldwide media coverage for it.

The best part of being a guerilla is how much fun you’ll have.  How can you not have fun throwing wild parties, putting on insane stunts, or pulling pranks that get national media attention?  Just make sure you don’t get too crazy – you probably haven’t allocated any of your marketing budget to post bail.

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Perception is Reality

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The universal thorn in startup’s side is a constant lack of resources.  Startups simply don’t have the resources to launch national advertising campaigns, lease the best retail space, or build robust technology.  But you can’t look like a fly-by-night operation, either.  For people to give you their money, they have to trust you.  The name of the game in Startupland is to create the impression that you are an established, trustworthy company.  To be taken seriously, you have to look bigger than a couple hackers in a garage.

There are a lot of ways to do this. Ultimately, it depends on the nature of your startup, but they are a few tried-and-true tactics.  A 1-800-number with an interactive menu has a “big company” feel.  Even better, have a virtual assistant patch through your calls.  Media mentions can also an effective way to demonstrate social proof.  Major media logos on your website are a great way to establish credibility.  To a lesser extent, testimonials are a way to create trust.  Written testimonials are okay, but videos of your ecstatic customers are even better.

Perception is reality.  If you want customers to buy from you, make sure that you’re perceived as a winner.

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Do It Twice

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The market has the answers, even to your advertising questions.  People respond differently to messaging, so it’s hard to know exactly what will resonate with your target market.  You will probably be surprised which messages resonate and which fall on deaf ears, especially when you start out.

Marketing strategy is no different than product development in that your approach should be market-driven.  Experiment with different messaging and channels, and react to feedback.  Listen to customers, and be on the lookout for ways to get better.

A/B testing is a great way to test your messaging.  Select a channel – direct mail, for example – and send out two different ads.  Be sure that you can easily tell which ad people responded to.

The trick to maximize your learning is to begin broadly.  Don’t start your tests with minor differences, like colors.  Instead, experiment with drastically different messaging.  Only once you find what broadly resonates with customers does it make sense to narrow in on specifics.

Even if you have years of experience, it’s impossible to know what messages and channels will resonate with your target market.  Try your advertising twice, and see what sticks.

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Turn $1 into $2+

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Advertising is an investment, and, especially as a startup with limited resources, you need to get a quick return on your investment.  That is, you better be getting customers from your advertising spend, or you’ll run your company into the ground before you can say “IPO.”  You don’t have the resources to waste money on advertising that isn’t working.

While it isn’t always black and white, an easy metric to help you determine whether your advertising is working is whether you are able to turn $1 into $2.  Does every $1 you spend come back to the company as $2 in sales? If not, move on to the next advertising channel and keep experimenting.  Repetition is the key, of course, so don’t bail immediately if you don’t see results. However, you should be able to ascertain relatively quickly if a channel is working or not.  If not, don’t linger for too long.  There are hundreds of ways to reach customers these days, so try another channel.

Also, don’t settle for turning $1 into $1.  As tempting as any revenue may be, $1 isn’t enough to build your business.  You need profitable revenue to fuel growth.

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How Can I Help You?

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We all like talking about ourselves, and why not? But when you or your ads are selling to a customer, the focus needs to be on them.  Companies focus mistakenly on the features of their products, instead of the benefits gained from using them.  The problem is that prospects don’t buy features or products, they buy benefits and solutions. Every product has to solve a problem.

Take all of your features and translate them into benefits for the customer. Then start your sales presentation by asking, “How can I help you?”  Make the discussion about their problems, not about you.

Focus on benefits, not features.  If you’re selling IT consulting services, don’t pitch a prospect about system integration, new applications, or your experience. Instead, talk about the money they’ll save, and how much more productive they’ll become.  If you’re placing an ad for a new scooter, don’t brag about the engine size, the brake system, or the trunk. Instead, show how your scooter can saves gas money, makes them safer than other motorcycles, and makes their commutes more convenient.

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Sell Wants, But Deliver Needs

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Consumers buy on emotion.  Women buy beauty products to look like the models.  Men buy fast, expensive sports cars because of how they’ll look driving them.  While consumers buy on emotion, they justify with reason.  Purchases are usually rationalized after buying decisions have already been made.  To sell successfully, you need to understand your customer’s mindset – both emotional and rational.  First ask what their emotional triggers are.  What gets them motivated, and what scares them?  Then think about how your product delivers long-term value.

Marketing that leads with emotion and justifies with reason drives sales.  Emotions can be tricky because they are short-lived, so make sure that you deliver real value.  The way to do this is to sell them what they want, and deliver what they need. If you’re marketing a fitness program, sell six pack abs or a sexy beach body.  These emotionally charged ads will get people to buy.  But then deliver a comprehensive get fit program that delivers immediate value.  Eventually customers will get a six pack, but in the meantime they’re happy with the value of the program.  Sell wants, but deliver needs.

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Old Meets New

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There are two kinds of markets—old and new.  The computer industry is a mature and established market, whereas cloud computing is nascent and emerging.  Your offering will either blaze a new path into the wilderness, or it will go to war with industry incumbents.  Though the difference between the two might not appear important at first blush, it calls for fundamentally different marketing approaches.  If you’re venturing into the unknown, education will be your top marketing priority.  You have to teach prospects how your product will make their lives better.  Think about social networks in the early days—most people just didn’t get it.  Conversely, if you want to compete in an already established category, it’s crucial that you differentiate your offering in a way that speaks to an underserved segment.

From a startup perspective, the most important thing to realize is how expensive both can be.  Educating customers takes time and it’s easy to burn through a marketing budget and come out on the other side empty-handed.  Similarly, overcoming brand loyalty and stickiness in an existing market can be frustratingly difficult.  Choose your target market carefully, and don’t underestimate how expensive it will be to convert customers.