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Marketing Strategy

How To Develop A Cost-Effective Marketing Strategy For Your Start-Up

Creating a marketing strategy for an early-stage startup can be overwhelming. This will guide you through the considerations, what to plan and prioritize in your early marketing strategy.

April 5, 2021

How To Develop A Cost-Effective Marketing Strategy For Your Start-Up

Around 90% of start-ups fail within the first few years simply because they don’t know how to market their businesses and attract the right audiences.

Unfortunately, many start-ups continue to believe that building a dedicated marketing strategy is unnecessary despite those numbers. However, it’s marketing that enables businesses to grow as it outlines the unique selling proposition (USP) that your brand offers to consumers.

Thankfully, marketing your brand new business doesn’t have to cost a lot if you do it right. A marketing strategy is a long-term sustainable plan to promote or sell a service or product to create profit and achieve a competitive marketplace advantage.

Your start-up’s marketing strategy incorporates the value proposition, brand messaging, and key data about your target consumer demographics.

Let’s explore what this entails for your business.

Outlining A Strategy

Your B2B start-up’s marketing strategy will need you to work on your business’s budget, goals, audience, and competitor/market.

No two start-ups are the same—so your marketing strategy must be tailored according to the unique services you offer.

However, you need to understand that your start-up’s marketing strategy will be vastly different from big brands’. Many software giants spend a lot of money on commercials, but start-ups don’t have the funds to do so.

Business Activities For Your B2B Start-Up

Many start-ups believe that branding is an integral part of building brand identity—and it is, but the way you’re going about it may be wrong. Entrepreneurs often try to imitate big brands’ mindsets by hiring PR firms and buying banner ads, only to find that they’ve wasted their money a year down the line when there’s only a tiny trickle of customers.

When big brands put out commercials, they’re essentially buying customers’ “mind share” by increasing brand affinity and awareness. For instance, if you think of cola, you’re likely thinking of Coca-Cola. The Coca-Cola Company buys a small part of your mind through their dedicated marketing and commercials. When you’re in the store, you’re going to reach for the bottle of Coca-Cola without looking at any other generic brands in the fridge.

It works for them because they’re worth billions of dollars. However, as a start-up, you don’t have any distribution channels. You can’t afford to spend money where it isn’t worth it.

This isn’t to say that branding is unnecessary. There are usually two aspects of branding: media spend and brand identity. Your start-up should invest in brand identity, which involves:

  • Maintaining a consistent brand style and tone
  • Identifying your target customer base and core brand messaging
  • Using a strong name, logo, and design that ties in with the solution you’re offering
  • Using the proper domain name
  • Constructing a well-designed website
  • Writing great copy

Consistent brand identity is necessary for any start-up’s marketing strategy. You should invest in brand identity.

Media spend comprises:

  • Search engine optimization (SEO)
  • Developing a following on social media channels
  • Partnering with social media influencers to promote your solution
  • Hiring PR professionals
  • Billboard, radio, or even TV advertisements if it makes sense

These activities are what push your brand out into the world. You can’t use all of these strategies, so you need to identify which will be most beneficial for your brand. Your start-up’s marketing strategy has to include how you’ll acquire customers in a repeatable, scalable manner.

Affordable marketing for start-ups includes using Google Ads and Facebook Ads to direct customers to the product page. You may also use paid banner ads to generate leads and nurture them.

Start-ups should also consider inbound marketing strategies. These are typically less expensive than outbound strategies and attract visitors to your website using social media shares or effective content that ranks high on search engine result pages.

You can then convert visitors through lead generation forms and landing pages. After this, they turn into paying customers when you deliver on the value your start-up promises.

However, it isn’t easy to know how well your funnel works before testing. The success of a funnel depends on whether you can acquire a customer predictably using a set process.

Many entrepreneurs also choose to attend start-up conferences to improve their visibility. To find out whether a conference will be worth your time and energy, ask yourself the following questions:

  • Are you attending a generic start-up or one where there will be many companies similar to yours?
    Generic start-ups often don’t offer much value to entrepreneurs since they’re not specialized to target the audience you’re focusing on.
  • Can you successfully network when you’re there?
    You must form connections with businesses that may require your solutions instead of concentrating on the conference talks.
  • Can you reach out to mutual contacts to introduce you to relevant people?
    Conferences are busy events and require you to alert your network that you’ll be attending. This practice will help you meet the people you should know for your business to flourish.

Here’s how you can design your start-up’s marketing strategy.

Set A Budget

The primary issue for start-ups is the lack of funds. It is commonly believed that you need to spend a sizeable portion of your revenue on marketing to ensure that your target customers stay aware of your brand and your solutions.

Most start-ups’ revenue follows the J curve that Howard Love outlined in his book. Entrepreneurs will initially notice a dip in revenue when they start due to many reasons, such as:

  • The product takes a while to be complete
  • Customers don’t understand or don’t like the initial solution enough
  • The business or marketing models aren’t streamlined.

A Gartner report details how US companies spend more on marketing technology thanks to the rise of digital marketing. These investments in digital tools and services can increase your start-up’s revenue in the long term. That is why digital advertising continues to take over traditional methods since you can reach a larger audience and get better ROI through them.

It’s also essential to invest in search engine optimization (SEO) to drive organic traffic to your website. Paid and organic social media marketing (such as Facebook Ads) is another excellent way to inform people of your product. You can check how successful your digital marketing efforts are through tools like Google Analytics and HubSpot.

Your budget should account for these and other multi-channel digital marketing approaches that optimize your tactical execution and expand the start-up’s bandwidth.

The top of your funnel has to begin with a scalable traffic source, such as Facebook Ads, banner ads, cold emails, etc. The source needs to be predictable.

You can track how many people in your audience turn into paying customers through each channel you use by utilizing digital marketing tools such as HubSpot. You need to split your budget between these channels depending on the proportion of customers you acquire through each. The process of developing a budget requires feedback—you prioritize the most profitable activities.

At the same time, many other factors will also affect your start-up’s marketing budget. These include revenue forecasts and operational costs. You must spend your budget wisely and ensure that you’re advertising on the channels that offer the greatest return. Once your business—and, in turn, budget—increases, you can increase your marketing budget to reach larger audiences.

Define Your Goals

Businesses measure their growth in different ways depending on their niche. B2B companies that offer tech solutions usually measure progress by the number of leads obtained. E-commerce platforms keep track of customer retention rate or average order value.

Take the time to develop a comprehensive metric that defines your development. We suggest looking for your very own NSM (North Star Metric) that lets you measure the growth as holistically as possible, in a way that’s unique for your business.

For instance, the project management solution Slack lists its NSM as “messages sent within the organization.” The NSM determines the value that your solution holds for customers.

As a start-up, your primary goal is to acquire customers and nurture them through the AARRR growth funnel (also known as the Pirate Funnel because of how it sounds). The AARRR funnel comprises of:

  • Acquisition: How many people are visiting your website? The Overview page on Google Analytics tells you your active user count, the pages visitors are viewing, and where they’re coming from.
  • Activation: What proportion of users perform necessary conversions? These could include installing your app or signing up for a whitepaper.
  • Retention: What proportion of users revisit your website or re-order your solutions?
  • Revenue: What proportion of users turn into paying customers? How much do they spend on your solutions?
  • Referral: What proportion of consumers refer your business to friends?

Know Your Target Audience

Your start-up’s target audience can only be understood when you take the time to develop an ideal customer profile (ICP).

This ICP enables you to target consumers who are likeliest to convert.

It also helps retain current customers, which is crucial because it costs five times as much to acquire a new customer than to hold on to an existing one. B2B leads take longer and require more dedicated effort than B2C, so you must nurture the clients you already have.

There’s a difference between how B2B and B2C companies approach target audience definition. This is because B2C companies typically have shorter lead times while B2B organizations have long customer relationships. It’s more expensive for B2B companies to acquire leads, but this also means that clients are usually more loyal.

You can determine where in the AAARRR funnel the leads drop off using tools like heat maps and analytics solutions. This will help you understand your target audience’s needs and ways to optimize your strategy to accommodate them.

As an entrepreneur, you have to decide which industries your B2B solution should cater to. Competitor research will help you find out which industries pre-existing solutions similar to yours are designed for. You can then optimize your platform to deliver customized solutions to these industries.

Research Your Competition

You must conduct competitor research before launching your solution since you’ll gain direction and inspiration for your B2B start-up’s marketing strategy. You’ll be able to learn from competitors’ mistakes, monitor their successes, and apply techniques that enable your business to grow. You’ll gain a competitive marketplace advantage since you’ll make more informed decisions and assumptions.

Digital marketing strategies can help you gain insight into the top competitors in your niche. By analyzing their keyword strategy for SEO, social media marketing campaigns, and website, you’ll have a better idea of what to include in your efforts.

You can conduct cost-effective competitor research using the following steps:

  • Determine your competitors. You can do this through a simple Google search. For instance, if you’re a company developing antivirus solutions for SAP systems, you can look up “antivirus for SAP systems.”
    The first three results on the search engine result page (SERP) get 71% of all clicks. You can use these results to inform your marketing strategy.
  • Find out the sales, content, and marketing strategies your competitors use and their results. This includes competitive keyword research through Google’s Keyword Planner Tool and an analysis of their social media and marketing channels.
  • Determine their pricing and underlying costs, such as shipping costs.
  • Analyze how actively users engage with your competitors’ content. Use their social media and website to observe the way they market their content.

Solutions such as Moz, Ahrefs, and SEMRush enable you to streamline your competitor research under one umbrella. They’re relatively cost-effective for start-ups and require you to expend much less effort than you would in conducting manual research. Some of their SEO tools are free.

Conduct Market Research

You need to conduct market research since 42% of start-ups fail due to no or low market demand. You need to ensure that there’s a sufficient market for the solution you’re offering.

However, market research is expensive. Of late, start-ups have begun to use digital marketing solutions that make the market analysis more cost-effective.

You can conduct cost-effective market research through the following steps:

  • Consider the niche and your potential market. SEMRush has a Market Explorer to help you find direct competitors (those who offer a similar solution to a similar audience) and indirect competitors (those who provide a different solution to a similar audience that fulfills the same needs your product does).

    You’ll get to find out the industry trends as a whole and gain a general idea of profitability.
  • Analyze your audience. Create an ICP that enables you to find qualified leads who are likely to require your services. Estimate the audience’s potential and gauge the market size. Traffic analytics tools such as SEMRush can help you with this step.
  • Use digital marketing tools for greater continuous insight. Remember that market research isn’t a one-time job—you have to continue analyzing competitors, reviewing your ICP, improving your website, and optimizing your content for an advantage in the marketplace.

Before you launch, you can also gauge interest from potential customers. Your product must fit neatly into the market. If you obtain pre-orders or letters of intent after announcing your solution across multiple channels, your product likely interests your target audience.

Conclusion

Many start-ups fail since they don’t spend on creating and executing a marketing strategy. It is essential to understand that a digital marketing strategy is indispensable for your B2B start-up.

It can bring you new buyers, target similar audiences and expand your audiences, and keep your existing clientele coming back for more.

A comprehensive, cost-effective B2B marketing strategy takes the Four Ps into account and guides customers through the AARRR funnel. But before you try to get prospects flowing through the funnel, ascertain your product fulfills their needs. This is the key to ensuring profitability for your start-up right from the get-go.

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