A startup is a new company made by one or more entrepreneurs to introduce a unique service or product to the market. It is a ground company that often faces the challenge of attracting potential investors. Though a lot of startups fail, history’s most famous entrepreneurs created startups like Microsoft, Netflix, Ford Motors, etc.
Startup companies have an idea that needs development and nurturing before becoming a stable business in the market. That action takes a lot of investment, usually brought up by the startups’ family, friends, bank loans, grants by non-profit organizations, or some government-sponsored scheme. To prove their mettle in the market, the startups need a good marketing strategy.
Investing in Marketing
If a startup is already running low on cash, why should it spend extra on marketing?
Marketing is just a way of communicating the value of your product or service to the potential customer. As a startup, you need to build awareness about your startup, fetch loyal customers, and increase your sales to stay in the market. Spending an adequate amount on marketing will help the startup build up and expand. It also helps you to attract more clients through deals and promotions.
Digital Marketing as a Catalyst for Startups
We all live in an era where people spend more time on their phones shopping online than shopping in a store. You may have already heard from people about the importance of digital marketing as soon as you started to look for ways to approach more customers. Digital marketing is a valuable asset to your startup, whether it’s a product you are selling or some unique service you are providing.
It has become an integral part of our life to check social media, make searches, and buy products online. It’s hard to find a product that is not listed online for an average potential consumer. One must build an online presence to expand their startup online. The online market itself is competitive; one cannot compete in the market without online marketing.
To gain traffic and loyal customers, you must beat your competitors. Let’s take an example of the Zoom app, created in 2011, and Skype, created in 2003. With proper marketing and development, the new platform competed with the older tech platform and won. The efficiency of online marketing is what makes it worth the investment and cost-effective. For example, the Google algorithm ranks ads based on the users and their history. You are charged for ads by a method of CPI (Cost Per Impression). This way, only relevant customers are shown your ads, and you are charged only for the number of ads seen or clicked by the customer.
Targeting an audience is also a method for online marketing; in this method, you specify your potential buyers to the ad company. This specification can be gender-based, location-based, device-based, and others. Many ad companies offer a track record of your ads to know who is interested in your product and how you can increase sales. That being said, television ads or billboards don’t provide any reflection of such sort.
Should Startups Invest in Marketing?
Being a startup entrepreneur in this competitive era is not an easy task. As a startup founder, you get to bring your idea to the market, find investors and hope it doesn’t fail. With the low resource availability, one would think that keeping marketing to the minimum would be a better option than exhausting your investment in marketing.
It is proven from experience and research that good marketing keeps loyal customers in check and brings new customers. There’s also a concept that people use, “Build a good product, and your product will bring customers.” But basing your unique idea on just a saying is risky and doesn’t sit well with today’s market competition.
In Today’s market, the product follows the brand name. Therefore, your key goal while building your startup must be to build the name of the startup as an upcoming brand.
Our answer to the question “Should startups invest in Marketing?” would be to manage your budget in a way that you don’t forget the importance of marketing for your startup.
Startups without Marketing
Matt Hirst is a General Partner at West Ventures, a company that helps design, build, and launch brands. According to him:
“A key reason startups fail is because they undervalue marketing.”
Some startups undervalue marketing by waiting for a later stage in the development of the product, while others undervalue marketing as a whole. Creating a company from scratch is a challenging and complex process. When we generally read about startups from books or success stories, we get an image of wishful success that wouldn’t have existed otherwise, but the reality is that most startups crash in their first 3 years of opening.
An idea is as useful as its impact on the market, but marketing plays an essential role in communicating that impact. Lacking a market need is a big step to failure for startups.
How to Invest In Marketing as a Startup?
Marketing gives you early feedback for your product in the open market, helps you gain loyal customers, distribution paths, and gives you data on potential customers. In that manner, digital marketing is more efficient due to its data about your clients. Marketing needs to be your key goal from day one. You can think about how your startup will work in the long run; your brand name is as important as your product experience.
Allocating the Budget
Some businesses create the assumption that only spending a large amount of money will yield you a cost-effective advertisement. Not everyone can afford expensive billboards or Television ads. Generally, startups have a limited budget. Also, thinking that marketing is too expensive can increase the risk of slow growth in the long run. There must be a mediocre approach in deciding the budget for your marketing campaign.
Your first target should be to enter the market; for that, you need to focus investment in a few targeted areas, then add more as your business expands. Think about the share of budget divided among different platforms to be more diverse.
Whatever idea you may have, without adequate planning, it is just another thought. But when you mold your idea into a strategy that can compete in the market, this is when your idea becomes a brand. Marketing today and marketing a few years ago has an array of differences. With the advent of digital media, everyone is entering the free market with non-stop innovations one after another. So, if you don’t want your idea to fade away in history, you must devise a strategy.
While looking for a partner, don’t just look for one who believes in your story but also someone who can help you enter the product or service of your startup into the market. Think about your customer, and your strategy must involve the satisfaction of customers.
Your goal for marketing is to increase the number of clients along with increasing repurchase and customer satisfaction. With all this in mind, using deception will be harmful to your startup in the long run.
Return of Investment in the Long Run
Marketing your startup properly will assure you to enter the market smoothly and increase your sales. With time you will gain customers’ trust and form a solid brand name. After that, you just need to maintain your name and develop your product or service. This ensures you a guaranteed return of investment and a stable grounding in the market.
Many startups fail within a few years of getting started, and one of the major reasons (besides poor product/service) is the lack of a good marketing strategy. Whether you are a big/small business or just a startup, you need to invest in marketing to get ahead of the competition and spread the word among a wide audience.