Defining a marketing strategy is one of the most important and complex tasks in a startup. In fact, in a strategic IESE Acceleration Workshop in which we participated, they insisted that in software companies the investment in development should account for 20% of the total and the remaining 80% should go to marketing. So if you’ve already managed to develop the software in your startup that will make your customers fall in love with you, be aware that you still have a long way to go. As in an iceberg, you only have that part visible on the surface of the water; now you have what’s left to make sure it stays afloat.
But why is it so difficult to define a good marketing strategy? I guess the main reason is that there are many variables to consider to identify which marketing campaigns to carry out and too much uncertainty about the results that will be obtained.
One of the most important difficulties in this process is to be able to define your business strategy well before starting any marketing strategy. And this is not easy.
Defining The Goals of Your Business
Regardless of the method you use to define your business strategy, at the end of the day you must have a list of clearly identified SMART objectives. In a very simplified way, if we are talking about a startup like ours with a SaaS business model, the list of objectives could include some of the following:
- New acquisition: to acquire 500 new customers in this fiscal year of our Nelio Content product at an average acquisition cost per customer (CAC) of 150€ and a Life Time Value (LTV) of 500€ per customer, achieving an additional benefit of 175,000€.
- Cross-selling: to achieve in this fiscal year that 80 current customers of the Nelio A/B Testing product subscribe to Nelio Content, with a conversion cost of 50€ per customer and an additional Life Time Value per customer of 400€, achieving an additional benefit of 28,000€.
- Reduce Churn Rate: in this fiscal year, reduce the annual churn rate of Nelio Content customers from 4.5% to 3.5%.
Without this previous definition, you can be doing a lot of marketing actions, but you will be stumbling around without knowing where you want to go, what you want to achieve and, most important, if you are on the right track.
Once the goals have been established, it is time to think about the specific actions you’ll take to reach them. And this is where the dilemma written in the title of this post lies: should you use a traditional marketing strategy or an online one?🤔
Before answering this question we should take a couple of minutes to clearly understand what “traditional marketing” and “online marketing” is, don’t you think?
When we talk about traditional marketing we refer to all tactics that already existed in marketing before Internet. These include actions such as:
- Advertising in print media (newspaper and magazine advertisements, newsletters, brochures, billboards and other printed materials).
- Advertising in broadcast media (television and radio ads).
- Direct mail advertising (brochures, postcards, and catalogues).
- Direct sales (door-to-door, telephone or at events and fairs).
One of the ads that broke all the rules at the time was Apple’s 1984 Super Bowl:
It is proven that traditional marketing has a high level of success as Seth Stephens-Davidowitz explains in his book Everybody Lies. These are initiatives with a long history and that everybody understand.
One of the problems with traditional marketing is that it can become very expensive and therefore not affordable to the pocket of many startups. And in many cases you will have to hire the services of third parties, so forget about doing it yourself… Apart from that, you can find cases in which the cost-benefit of this type of marketing is questioned, as was seen in the case of Wallapop:
Wallapop’s increased losses went hand in hand with the company’s efforts to consolidate its brand and attract users. From one year to the next, the platform’s spending on advertising, propaganda and public relations soared from two million euros to 48.54 million euros. (source: Wallapop, punto de inflexión: perdió 62 millones en 2015 antes de empezar a monetizar)
When we refer to online marketing we include all those campaigns that are carried out online on websites and social networks. It includes things like the following:
- Content marketing,
- Banners ads,
- Googl ads,
- Video marketing,
One of the great advantages of online marketing is that, if done right, it can easily become viral. And this doesn’t have to be exclusively for million-dollar budgets. For example, see how Bere Casillas has managed to surpass 14 million on YouTube with the following video.
The main advantage is that digital marketing is more efficient for the cost involved, it is easier to reach the target audience and, above all, you can receive direct feedback from your audience. And in this case we are talking about a marketing that can be more easily adapted to the size and resources of the company.
The main drawbacks are that this continuous interaction with your potential customers on blog posts, social networks, or emails does not allow you to lower your guard at any time. You must be there at all times. In addition, a simple misunderstanding in a particular forum can lead to a huge loss of business 😱
Which is better?
Now that we understand the two types of marketing a little better, we return to the initial question: which one do we opt for? Or, better yet: do we really have to choose one of the two, or can we do both? 🤔
The only thing I can tell you is to analyze what can be most effective in your company with your budget. Our proposal is that you always follow a lean methodology:
In the context of marketing, the idea is to generate the maximum possible number of actions that you believe will help you to achieve your goal taking into account the available resources you have. And for every action you take, be able to assess whether it is bringing the expected results to your goal.
For example, in our case we had set the target of acquiring 500 new customers. What actions can we take?
First of all, considering that our budget is low, it’s ridiculous to consider doing commercials on TV and, moreover, we probably wouldn’t reach our potential client. But that doesn’t mean you have to rule out all the traditional marketing: participating in face-to-face training workshops, giving several talks or actively participating in the WordPress community in person are a “traditional” way of promoting our service. And talking about participating in the WordPress community… don’t miss the next WordCamp Barcelona 2018! 🤗
The main difficulty of this type of activities is the preparation time they require. Also, the audience you can reach is probably more limited than you’d get online. In your favor, however, is the fact that this is a very efficient type of marketing. Specially if we take into account that we can have direct and immediate feedback from our audience. And it’s relatively easy to measure whether a person who has subscribed to a product had previously known or attended one of these events.
If we talk about online marketing, bearing in mind that we’ve a low marketing budget, what actions can help us achieve our goal? In this case, the alternatives available are enormous and, in our case, I can give you several examples of what we’ve done and continue to do.
On the one hand we’ve created an affiliate program to facilitate the promotion of our product. The idea is that the more they talk about us the more chances we have of getting new subscribers. It is not very complicated to carry out and the advantages are clear!
Another thing we’ve also requested are paid reviews of our product. This is another great way to get greater visibility, apart from the feedback that the person reviewing your product can give you. And since we’re talking about commercials, we can’t forget Adwords. We haven’t had much success with our Adwords campaigns so far…🙈 but we keep trying!💪
On the other hand, we also make efforts on our website. We mainly focus on content marketing, which includes several actions. On the one hand, seeing that some of the training workshops or talks had been a success, we thought it would be a good idea to create a free course of 8 lessons:
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On the other hand, we know that the best way to attract an audience to our website is with the creation of content in the blog. Currently every Tuesday and Thursday we publish a post on our blog (with its corresponding Spanish version). To achieve this, it is very useful to schedule them in Nelio Content’s editorial calendar.
More importantly, we promote all content intelligently and regularly on our social networks with the Social Automations feature integrated into Nelio Content. It schedules all messages to promote content on all your social networks.
Thanks to this, in our case, we’ve calculated that we save 15 hours per month of work. The improvement in SEO has been considerable and we’ve managed to gradually increase the number of visits to our website.
But watch out with vanity metrics! Yeah, they’re very nice, but they’re not telling you if you’re reaching your goal or not.😅
As far as I know, no one has discovered the magic formula to find the best marketing strategy at all times. And what works for you doesn’t work for your neighbor… But there are some tips you should follow if you want to find your way. First of all, don’t go crazy with a marketing plan if you haven’t set your strategic goals and KPIs. Then, for each of your objectives, propose all the campaigns you can think of that are within your budget. All the actions you can think of can be a good option for your case, don’t discard them. Then prioritize and… make as many as you can!