When you think about it, of all the essentials a startup needs to succeed, none are as important (or challenging) as effective marketing strategies. In fact, roughly 7000 small businesses go bankrupt every year in Canada, usually for one of four reasons:
- A lack of capital or initial funding to get the project off the ground
- Inadequate management or leadership to provide the team with vision and direction in the early stages
- An unclear (or insufficient) business plan to outline the company’s long-term goals, needs, and structure
- Flawed or non-existent understanding of the market or ineffective marketing strategies
Most companies (who do the necessary planning and research) can get past the first three hurdles. Once you’ve written a comprehensive business plan, secured the required capital, and hired a small team of experts you can trust, there are only two things standing in the way of your success: correctly assuming the market has a need for what you’re selling and then employing the correct strategies to entice your customers to buy from you.
For most people, “marketing” is just a buzzword that gets thrown around a lot and is typically synonymous with advertising, which is only a small piece of marketing. Because of its complex nature, it can be hard to develop strategies that work for your business, product, or brand. That’s why today’s article outlines some common marketing challenges faced by startups and, more importantly, how to conquer them.
Before we dive into the technical stuff, a quick overview for those without formal education or experience.
In the simplest possible terms, marketing is determining the value of a product (or service) and communicating that value to a large audience.
“Value” is usually thought of as the price, or the cost of manufacturing and distribution, but it also matters what value means to your customers. Understanding how people perceive what you’re selling affects what strategies you’ll use to market it.
“Communication” refers to how you convey that value and why we should choose you over your competitors. The strategies, mediums, and overall image you present to the market is determined by how you want to communicate value.
Both of these aspects of marketing are important because if one is neglected, the whole process is negatively impacted.
Your product (or service) is also a part of what’s called the “Four P’s”:
- “Product” refers to whatever you’re selling, whether it be food, technology, or even services like legal counselling. Without a solid product, developing any marketing strategy is very difficult.
- “Price” is fairly straightforward: it refers to what you’re charging for the product. Price is usually determined based on a markup of the total costs required to make a single unit of product.
- “Place”, also called Distribution, refers to how you plan to get your product into the hands of your customers. In the case of physical goods, this is usually done with a supply chain comprised of retailers and trucking companies in exchange for a volume discount, but with services you need to be creative. For example, if you’re an accountant, then consulting is one way to distribute your service.
- “Promotion” is more or less exactly what it sounds like; how to make your audience aware that your product exists and convince them to buy it. This is most commonly done with advertising, but also via sales promotion, email marketing, and personal selling. Most companies work with multiple mediums to reach more prospective customers.
Common Marketing Challenges
“So wait,” I hear you saying, “If I have a good product that’s fairly priced, some advertisements on social media, and a team of delivery people, that should be all it takes, right?”
In an ideal world, that would be true. Unfortunately, that’s not the case, or else there would be no such thing as the Fortune 500. The companies on these lists are considered the best, but that doesn’t mean they don’t address the same challenges as everyone else from time to time.
Identifying the Need
This is the single most important thing you do as a marketer, and as a businessperson in general. Without a clear need for what you’re selling, even the most amazing marketing plan in the world wouldn’t make a profit. Be sure you do ample research before spending capital on something nobody needs.
Too many startups rely on word-of-mouth in their entry to market and waste valuable time (and therefore money) in getting the word out about their product. The need may be there, but if nobody knows you exist, then nobody is going to buy from you.
This is where promotion comes into play, and where you should execute creative and smart strategies to bring attention to your organization.
In the same vein as creating awareness, “leads” are potential customers whose information they provide to you to follow up on at a later date. Some businesses, especially the service-oriented, rely on generating new leads in order to boost sales (sometimes a consultation, other times a membership or subscription).
People are very protective of their personal information and are aware of what companies use it for. In order to secure their contact information, you need to establish trust with your customers and develop your brand’s reputation. A good way to do this is to share testimonials from satisfied customers as part of your promotional strategy.
Digital Vs. Traditional Media
A lot of companies struggle to find a balance between marketing through digital media and using more traditional channels. In the modern marketplace, there are far more potential customers online, but the Internet is highly competitive and people tend to ignore ads. On the flip side, depending on your audience, traditional options like print and TV aren’t always viable.
The key in finding this balance lies in doing proper research into the media habits of your customers. Find out how much time they spend per day on social media platforms like Facebook, whether they listen to the radio, watch cable or satellite TV, etc. That information will allow you to craft much more effective promotional strategies specially tailored for your audience.
On the subject of digital media, it’s important that your company has a polished, user-friendly website. In this day and age, it’s highly unusual not to have one and makes a very important impression of your brand on potential customers. Your website is often the first or second touch point people interact with, so it needs to be navigable, professional, and informative.
Establishing Brand Image
This is another one of those marketing buzzwords that a lot of people don’t fully understand: “brand”. Put simply, it’s asking for a Kleenex instead of a tissue, a Coke instead of a cola, or to Google something. These are examples of brands that have become not just household names, but a part of everyday speech in the English language.
I’ll discuss this in more detail another time, but suffice it to say when you’re establishing your brand it’s important to consider what you want your customers to associate it with.
Of course, there are dozens more problems startups encounter along the slow climb to the top, and literally countless potential solutions to those problems, but at the very least I hope this article provides some insight into smart marketing practices.
What challenges have you faced as a fledgling entrepreneur? Let us know how you dealt with it, and what we should cover next week, in the comments below!
Need individualized marketing advice? Get in touch with OBBA’s marketing department for elegant, cost-effective solutions to these challenges and more.
Aerik Knox is the Director of Marketing for the Ottawa Black Business Alliance. He is responsible for promoting and developing much of BIA Chamber’s services.