I gave a talk a few weeks ago at OneEleven in Toronto. The audience was mainly early stage startups looking to learn a bit more about marketing and sales. I covered some of what I consider to be the bedrock underlying principles of building a revenue or growth engine for an early stage startup. You can scroll down for the slides but I wanted to give some color to the slides here in the blog.
You Can be Awesome At Tactical Execution and Fail
There is no shortage of great resources that explain how best to execute a particular tactic. If you Google “How to run a great adwords campaign” or “Guide to Facebook ads” or “How to market using Twitter” you will see millions of articles, guides and how-to manuals. But flawlessly executed tactics do fail – and they fail often. Sometimes because it’s the wrong tactic for your market, sometimes it’s because the messaging or call to action for the tactic isn’t compelling, sometimes it’s because there are simply better tactics. Sure, we are all smart enough at this stage to be measuring and testing so we know when they fail, but there is a very real cost to endlessly testing and rejecting failing (yet perfectly executed) marketing and sales tactics. Obviously we all need to keep sharp on how best to execute tactics but tactical expertise alone won’t get you to a great marketing and sales engine for your business. Worse still, starting a marketing plan with a tactical plan can lead you into a spiral of wasted time, money and effort.
Detailed Customer Segmentation Comes First
So what comes before a tactical plan? Firstly you need a segmentation that describes the attributes and assumptions about the immediate target customer. This target customer is the customer you think you can most easily acquire in the next 3 months (not the customer you wish you could acquire 3 years from now). That understanding of who that exact customer is, why they are a great target for you, what is unique about them that makes them love your offering? Lame customer segmentation such as “We target SMB’s” or “Our target is Financial Services companies” will result in a lame set of tactics with lame response rates. Detailed, specific segments such as “Our target market is retailers with more than 30 physical stores, in the United States, that also have a significant online business” or “Small businesses with more than 5 employees in Canada that sell a service, rather than a product, and do not have a full-time office administrator” will lead to very specific tactics to test with a higher probability of success. Figuring out this highly specific customer profile will require you to speak directly to customers. Surveys and data can tell you a lot about what customers are doing but rarely give you insight into why customers do what they do. Customer discovery interviews take some skill to do well, but like any skill, you will improve over time. Importantly, these interviews should not be focused on selling a solution to the customer. The focus of these conversations is to learn more about the pain your solution addresses (and how a segment buys – more on this below). Later, with permission, you can sell the customer something.
Understanding the Buying Process
The next critical piece of information needed to build a better tactical marketing plan is a deep understanding of the target customer’s buying process. Any purchase journey has distinct steps and customers have different needs at different stages in that journey. For example, prospects that don’t understand that a category of solution exists in the market, often need to be educated about what they are missing out on today. On the other hand, in more established existing markets, customers may need less help understanding why they would want a solution at all and more help understand how competing solutions are different. Understanding where the bottlenecks are in the buying process is important because you will want to be able to map your marketing and sales actions to attack those bottlenecks. (Scroll all the way down to see more in the deck on slides 12 and 13 on this).
Finding the Root Cause of Failure – Incorrect Assumptions
Lastly, when a marketing tactic is selected and tested, often it will fail. One big mistake that many startups make is they simply move on to new tactics without really digging into the root cause of why the tactic didn’t produce the desired results. For example, you decide to create an email campaign targeting a specific set of prospects. The call to action is to register to download a piece of content. The response was lousy – the open rate was OK but the clickthrough rate was terrible. What have you learned? You made some basic assumptions about your prospects which led you to believe that this tactic would work and it didn’t. That means you have a bad assumption somewhere. What was it about the copy or the offer that didn’t appeal to your target prospects? Did you assume that this content was valuable to them and it turned out it wasn’t? Why not? What did your prospects expect to get when they opened the message? The answers to these questions will quite likely impact every other tactic you are running.
April,
Thanks for sharing as I wasn’t able to make it to the ‘live’ delivery of this presentation.
Historically, B2B complex sale marketers have struggled to get close to customers. Being able to speak to customers directly was slow and filtered through market research. Sales blocked or hampered marketing efforts to understand customers.
Now, as you point out, there is no shortage of marketing tactics available to generate revenue.
The tough challenge remains ‘why’….why do campaigns fail or importantly, why do campaigns succeed?
The key question: can marketing open a dialogue with customers directly and on a timely basis?
Through developments in social media, digital testing and online research, B2B marketing is realizing this opportunity now.
Thanks for another good post!
Robert Lesser
Hi Robert – thanks so much for the comment!
You know, it’s funny how hard it is to get close to customers when really, that’s where all the good stuff happens. I have found it hard in big organizations where sales is sometimes a gatekeeper to accounts and so building my own set of personal relationships with customers was a challenge. In small companies I think a lot of time people don’t get close to customers because they think customers don’t want to talk to them (which is almost never true). There are a lot of reasons I like org structures that blend marketing and sales together – one of the big ones is that it removes the barriers between marketing folks and customers and encourages those relationships to form.
Hey Robert, interesting comment. What stood out was your line about sales blocking marketing efforts to understand customers. I think that’s a bigger problem than figuring out why campaigns fail. Get sales and marketing to talk it out. Find out why sales is putting up obstacles. Everyone supposed to be on the same team. Imagine how much more effective sales and marketing programs could be if both departments worked together instead of against one another. Once you get both teams talking you’ll be surprised how quick you’ll find out what’s working and what’s not.
Andrei,
Thanks to you and April for responding to my comment and discussing sales/marketing relations.
Have worked both sides of the ‘fence’, I don’t disagree with the sales perspective but rather with the unproductive tactics chosen (i.e. blocking).
I don’t see this as a sales & marketing alignment issue but rather an opportunity to improve the ‘prospect’ experience.
If the sales person is trying to nurture a deal or close a customer, it’s not a good idea for marketing to intercede and potentially delay or disrupt the relationship or conversation.
Second, involving salespeople in probing on customer behaviour and response to marketing campaigns is not core to their role and is unlikely to be supported.
The more pragmatic approach is for marketing to use digital methods that are preferably unobtrusive and that do not take sales away from selling.
Hope that clarifies!
Robert
Hi April,
what do you think of the idea to host a medium sized event for Beta Users (unfortunately we dont have the resources for something fancy) ? We want to run a closed Beta phase before going live and users who use the product (upon invitation from us) in that time are invited to the event. The goal would be to strengthen identification with the brand and possibly create multipliers or evangelists. Early stage community management if you will. What is your opinion? Do you think that is worth the money you put into it?
In general I see a lot of benefit in getting a bunch of engaged customers together. I’m a big fan of advisory boards for that reason – everyone gets something out of interacting with their peers, and the company tends to learn a lot from the discussion. I would make sure to set out specific goals for the event – is there an agenda? What will the users come away with? What are the rules for the event? How will you measure success or failure of the event?
For example I ran a customer advisory board for a mature brand and we made it very clear that this was not a customer support forum and we wanted the folks to in some ways take off their customer hats and put on their advisor hats. That worked well for framing the event as an information exchange. The goal was to strengthen our relationships with those customers by giving them an opportunity to give us early feedback about new product features we had coming down the pipe. Our measures were around Net Promoter Score with those accounts as well as a “share of wallet” increase in those accounts. We saw good gains in both. Obviously this is a big enterprise example – your goals will be different if you are a B2C company or selling to mid-sized businesses. The important thing is to go in with a goal in mind.
Thanks April. Cheers from Germany
Great post as always, and I love the redesign as well.
I’m curious if you had/have any thoughts on traditional PR for a startup (ie agency). Do you think it has much value? And if so what types of metrics do you like to use to track ROI. Given your philosophy on testing and iterating through value proposition and tactics first, I assume you have some strong opinions of if and when to spend the “big bucks” associated with PR.
Thanks Jason and thanks for the comment!
I think where you have a market that consumes media that you can create with PR and that media can help move your targets along in the buying process, it’s totally worth the investment. The key it to understand what metrics you are trying to move and tracking against those.
Measuring the impact isn’t always as straightforward as measuring clicks to conversions (non-digital is always a problem and even a lot of digital isn’t going to lead to a directly measurable traffic/click action). I’ve done some attribution stuff by survey (asking customers where they hear about us) and other things but I can’t say I have ever felt awesome about my ability to put a number on the value of PR.
For me – it becomes more about deciding if I have a newsworthy story to tell that I know would influence customers, and if so, would it be worth it to pay to amplify that story beyond the one on one conversations we are already having. If I don’t then I wouldn’t expect PR to help me much until I did.
April
Great advice “Do I have a newsworthy story?” That’s a great centering question. Great way to avoid chasing vanity placements and getting too dazzled by lots of impressions that may not lead anywhere. Thanks!
April, Thank you very much. Great article