When I think back to my studies and especially my marketing lessons in university, I have to admit that I don’t really remember much.
Ok, there were these 5 forces from a guy named Porter and some other highly theoretical stuff. For me, these topics were all strategies that big corporations probably use when they need to determine if a market fits their criteria for a good opportunity.
But I learned almost nothing about how to market a small business or startup, or even how to evaluate a good marketing campaign.
Next to these big ideas about strategic marketing was this idea that marketing only means fancy advertising on TV, radio or newspapers and therefore you must be as creative as possible to succeed in this game.
The truth is that even many business owners have some huge misconceptions in their mind about the real purpose of marketing and how to use it the right way.
But that’s not new.
There are more small business owners who do ineffective marketing or don’t market their business at all. Instead, they keep looking on their sinking ship without acting.
For many startup entrepreneurs, marketing seems really unpleasant. They would rather focus on building a great product, based on assumptions about what their potential customers really need and think they will go viral with it automatically.
Yo, good luck with that.
For all the other young hustlers here who understand that marketing is THE most important thing to focus on WHILE building your product, listen up!
8 Hacks You Should Know When It Comes to Marketing Your Startup (Or Any Other Business)
1. Focus On Income Growth, Not Cost Reduction
Ok, at this point I will assume that you’re a bootstrapper and weren’t sitting on a pot of gold when you started out.
In this situation, you need to look at costs, of course. Otherwise, you will run out of cash as faster than you can imagine.
And even if you’re an established entrepreneur or VC-funded, you need to keep your eyes on expenses all the time.
But…Focusing only on costs won’t get you anywhere.
By the way, how far will you get by cutting costs? 5 – 10% in higher margins? Maybe.
It’s actually the same in your personal life as an (former) employee. Mainstream media and self-named money gurus want you to believe that you can become rich simply by cutting costs and saving as much as you can in a savings account.
And in some cases, people show that kind of persistence and do that for 30 or 40 years, so they can finally buy their Porsche 911 by the age of 65…. Wow!
If that sounds desirable for you, go for it! Otherwise, you need to come up with another plan.
The only way to get financially rich as a young adult is by
- increasing your income while
- keeping your costs down
And the only way to have an unlimited income potential is by starting your own business.
But of course, you already know that. ;)
So let’s go back to your startup.
What the net income is for an employee, is cash flow for the entrepreneur.
Focus on increasing the amount of money that comes in, instead of trying to find the next nickel to save.
Don’t be afraid to spend some money, but make sure that your expenses help you to make even more money.
What you focus on expands, so keep looking for opportunities to grow your income!
What to do?
- Get some accounting software like Freshbooks or Wave
- Start looking at your cash flow on a daily basis
- Discover the marketing activities which bring you more money in than out
- Focus on the activities that work for you and stick to them until you find even better ways of marketing your startup
2. Use a 80/20 Marketing Approach
As an entrepreneur, you are always busy. There are so many things to do and it can be hard to remain focused on the important things.
In the beginning, most startup founders are completely into product creation.
They already think that they have figured out what their customer needs and so they begin building the “perfect” product.
Unfortunately, there will always be another small little tweak to make on your website and probably most of them won’t make any big difference to the users end experience.
So what should you do instead?
The most successful founders are fine with a MVP (Minimal Valuable Product) and start selling it as soon as possible.
You can stick to the Pareto rule and use 20% of your time, effort and investments to develop your solution and then 80% to market it.
If nobody knows you, nobody cares and so nobody pays you money!
So, what should you do?
- Understand your daily tasks
- Make a list of all tasks
- Divide the tasks into two categories: distribution and marketing
- Make sure you spend the majority of your time on marketing tasks and outsource or delegate everything else
3. See Marketing as an Investment
A big myth some business owners still believe is that marketing is an expense. But that’s only right if you do it the wrong way.
Would you say that spending $10,000 on Facebook ads is expensive or even stupid?
Maybe, but only if you don’t know what you are doing.
But the truth is that you need to see this $10,000 as an investment. If your campaign generates, let’s say, $18,000, then you made a ROI (Return on Investment) of 80% on your money.
When you are not sure if your campaign will get you a positive ROI, start with a tiny budget and put more money in when you see that it’s working.
The beautiful thing with online marketing is that everything can be tracked with ease. So you can see what is working and what is not.
It is a little bit more difficult with offline marketing, but you can do it too.
What to do?
- Set up Google Analytics or Mixpanel
- Observe how much revenue you make from your campaigns
- Improve your campaigns until you have a positive ROI
- Invest more money in the campaigns that work and scale up
4. Constantly Test and Measure
Like I mentioned before, it is pretty easy to measure the success of your marketing campaign when you have an online business or if you at least use the internet to market your startup.
However, even for brick and mortar businesses, there are ways to gain clarity of good or bad marketing activities.
For example, if you use newspaper advertisements, you can put a specific telephone number on it. Every time someone calls that number to make an order, you know that the customers came through that channel.
Otherwise, you can just ask them.
But what is much more important here is the fact that a marketing campaign isn’t something to set up and forget, but to test and measure all the time.
It’s the nature of a lean startup to constantly build, test and learn from the process in order to develop a better campaign (or even product).
Sometimes, it’s just a single sentence in your sales copy which is responsible for a 100% or more increase in conversions.
So keep measuring and testing your assumptions of good marketing and keep changing your approach until you see better results.
In order to choose which version of your ad or landing page gives you a better conversion rate, you can run A/B tests.
With A/B or split tests you can basically have two versions of your ad or page online. After you drove some traffic to it, you are able to see the difference in conversion rate and start focusing on the better version.
Here is a list of things that you can test and improve on your landing page or ad:
- Headline copy
- Sub headline copy
- Body text
- Position of images
- Color of font
- Color of call-to-action button
- Text on button
- Background color/ image
You certainly don’t stop after one test, but do this for as long as it takes to find the version that gives you the best results.
What to do?
- Use A/B testing software like Optimizely
- Track the conversion rate of your current landing page
- Create a second version of your landing page
- Change aspects of your landing page or try a completely different one
- Drive traffic to your landing pages
- Decide which version you want to keep and start the process again
5. Keep Educating Yourself
If you hate learning about marketing regularly, you will have a hard time with your startup. It isn’t something you can learn one time and be a marketing genius for the rest of your life.
Of course, there are some principles and laws which are constant, as they are based on human behavior; but the way we receive information is constantly changing.
Especially when it comes to online marketing, as you can read about new tactics on a daily basis.
So make sure you are up to date with your marketing strategy.
What to do?
- Set up a bookmark folder
- Save the URL of your favorite authority marketing blogs
- E.g. Quickprout, Marketingland, Videofruit
- Make it a habit to read articles about marketing that relate to your business model and industry
6. Know Your Numbers
Business is a numbers game. It’s like the old saying: If you can’t measure it, you can’t improve it!
You need to have the systems in place before you start spending huge sums of your marketing budget.
Everything mentioned above is worthless until you measure the results of every action you take.
Seriously, it can be even dangerous to spend money on marketing without knowing if the money you spend is worth the investment. Especially when you bootstrap your business.
So what are the numbers you should focus on? There so many metrics you can track. It’s kind of confusing and often overwhelming. Sometimes, it’s not even necessary.
Here are 6 metrics you should definitely track in your business when it comes to marketing:
1. Cash flow
I can’t emphasize it enough. Cash flow is king!
It’s actually a general point in your business. Control the money that comes in and keep looking at outgoing cash.
Otherwise, you market your startup to death.
2. Sales Revenue
Basically, this is the money that comes in. The amount of revenue doesn’t tell you anything about whether the business is successful, but in terms of marketing efficiency, it gives you a brief reference of whether your campaign was successful.
3. Number of Leads
One of the most important things in your business is your database.
It literally determines the value of your business because it gives a good assessment about future revenues.
At an early stage of your business, it might be even the most important metric to track. Especially in the online world, it’s still the email list that stands in direct correlation to your estimated revenue.
“The money is in the list”
4. Conversion Rate
The next metric is the conversion rate. How many of your leads become paying customers?
2%, 10% or maybe 50%?
Be aware that even a small increase in conversion rate can have a massive effect on your revenue.
Let’s see what I mean by that:
|Scenario A||Scenario B|
|Product Price||$ 50||$ 50|
|Conversion Rate||2 %||3 %|
|Revenue||$ 1,000||$ 1,500 +50%|
It should be one of your main activities to constantly increase your conversion rate.
5. Cost per Customer
So how much should you spend on marketing to get these 1,000 leads? It’s really hard to set a budget for marketing. But if you have the systems in place, you can easily buy customers without setting a firm budget.
Let’s say you spend $1,000 in advertising and you collect 100 leads through these ads, then you’re paying $10 for a lead.
When we assume that 1 of 10 leads buy your product (conversion rate of 10%), you pay $100 per customer.
Now, here’s where things get exciting.
Imagine you create a marketing plan to sell a product for $500 with a profit margin of $200.
How many times could you invest your $100 per customer?
As many times as you want. Spend $100 and make $200!
It really is that simple. But of course, your marketing funnel must be set up in the right way.
6. Customer Lifetime Value
You probably know that it is way more expensive to get new customers than it is to keep established business relationships.
Unfortunately, as a startup founder, you probably don’t have as many customers in order to focus too much on recurring sales.
Nevertheless, it is very important to understand your customer lifetime value (CLTV), even if you need to estimate some numbers to calculate it.
It gives you an even more precise number of the amount that you can spend to attract new customers and is also a good indicator to see what kind of customers are the most profitable one in the long term.
So how do you calculate your customer lifetime value?
Here are your numbers:
- Average spent per customer: 55 €
- Number of times a customer purchases per month: 3
- Average customer lifespan: 3 years
- Average retention rate: 70%
CLTV = 55 * 3 * 12 * 3 * 0,7 = $4,158
Do you see the difference between average spent per customer and the CLTV?
It is even worth investing more than $55 to attract a new customer when you are able to keep him for a long time and when he buys on a regular basis.
Of course, this is a very simple calculation. In a more advanced version, you would also include the cost of money and interest rate.
But this should give you a first impression what this number can mean for your startup marketing.
What to do?
- Take some time and calculate or rather collect these numbers with the tools mentioned above
- Put everything on a spreadsheet to get a clear overview
- Use the Ad Spend Calculator for a first quick calculation
- Keep looking at them on a regular basis
- Test and measure your activities to improve the numbers constantly
7. Focus on one metric at a time
Like I mentioned before, the metrics you can track are almost limitless. But not every metric is important, even when you think that it matters.
“Unique visitors” is a good example.
When you log in to Google Analytics and see that your traffic has been increasing for the last weeks, it is a great feeling. Unfortunately, traffic is a so called “vanity metric”. It pleases your ego and it is an indication of progress, but if nobody is buying from you, who cares?
So regarding your business model, the number of opt-ins, signups or actual purchases are way more important.
Therefore, you need targeted traffic in order to build your email list or customer base.
However, it is not only the right metric you need to focus on, but also the right time.
Focus is significant! Especially when you build your startup, it seems that everything is important.
“If You Have More Than Three Priorities, You Have No Priorities” – Jim Collins, Author of Good To Great
And you can even do better by focusing on only one metric at the time.
But what should be the metric you need to focus on today?
It really depends on your business model and the current stage of your business. But let’s say, for example, that you want to start a subscription business and have just started out.
In this case, the number of signups for the free version of your product would be an appropriate metric to track.
That means whatever you are working on, you need to ask yourself: Does it help me/us to improve our most important metric?
And by the time this metric will also change. For example, when you reach a critical number of signups and need to focus more on converting your users into paying customers.
What to do?
- Set up your preferred analytics tool
- Choose the most important metric to focus on
- Set a goal for the one metric that truly matters
- Focus on activities that help you to reach that goal
- Keep tracking your progress
8. Automate The Process
Marketing takes time. Especially in a startup, we still need to develop the systems to run our business smoothly or even partially on autopilot. In the beginning, we do everything on our own, but when we grow bigger, it is practically impossible to do that anymore.
Like you learned in this article, you need to focus on the right things at the time, track your numbers, test and measure and change everything when it’s necessary.
If you get a lead from an opt-in form on your website, there must be everything set up in order to react to that with an email or phone call.
Otherwise, there is a chance of losing a potential customer.
When you find something that works, simply do it over and over again, until you find something even better.
Remember that success in your business or in your life has been never just an event. It is a process and it comes from doing the right things consistently until you achieve your goal.
Fortunately, there are enough tools like Hubspot and Pagemodo to help you with almost every area of your marketing.
What to do?
- Find a successful marketing strategy for your startup
- Read 19 growth hacks to attract new customers to get some ideas
- Use tools like Zoho or Infusionsoft to automate and scale up the process
I hope this article gives you a good overview of various hacks that you can use to market your startup in a smarter way. If you’re serious about your growth strategy you should download our free startup marketing plan template.
Please be aware that this article doesn’t claim to be complete.
If you have any ideas how to complete this list, please comment below.