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.