I recently requested topics from the members of Marketing Meetup and this was in the top three. You can see other videos in this series, together with supporting documents, by visiting www.screenmatrix.com.
While the previous video concentrated on Marketing Without Money, today I am looking at how and where to start. I am not going to discuss Google PPC or Analytics, nor any of the other products, platforms or ecosystems like Adobe, Salesforce, HubSpot, Marketo and so on. They are tactical tools used to implement a policy. I am talking about how to arrive at that policy. I will be talking about budgeting today, assuming you need to create and justify a budget to launch your project or product.
There are five stages. Reading the manuals and textbooks, you may think Market Research is the first step on the critical path. However, there is a crucial step before that, the genesis of the product. If you are an entrepreneur, this will be your own creation, but if you are a marketer, whether in-house or contract, you will need to have this presented to you in the form of a brief, a business plan or some other form of communication. A good product is your best marketing asset.
So Step 1 is to refine your business plan, marketing plan, product offer and campaign materials. You will need them to manage internal resources and contract with external suppliers and affiliates. Make sure you are confident in them. Too many marketers lap up the brief they are given without question. You have been brought in to use your skills and experience, so re-examine the assumptions in the brief or Job Description you have been given. As an entrepreneur, this is the stage where you need to test your business plan so hard you break it, then rebuild the pieces into something stronger. You should know your revenue targets, so work back through your conversion funnel and arrive at a budget for media spend based on your target CTR, CPM and OTS.
For example, If you target 100 sales per month and your conversion rate is 1% you will need 10,000 Clicks per month. If your CTR is 0.1%, you will need OTS of 10,000,000. If your CPM is £2.50, then your monthly media budget will be £25,000. Bear in mind, that is just your media cost. Your Cost of Acquisition will be perhaps double that and your total cash burn will be much higher as you will have to account for overheads, production and other costs. Let’s say it takes a prospect five views of your ad before they click on the link. Are there enough potential customers out there to support your projections?
Sounds impossible doesn't it? It is not impossible, obviously, but it is difficult. The fact is that 90% of startups fail. 10% of startups fail before they reach their second year. In the UK in 2022; 38% of startups failed because they ran out of cash or failed to raise new capital, 35% of startups failed because there was no market need for their product or service and 20% of startups failed because they were outcompeted, so 55% failed because of poor marketing. Interestingly, only 8% of startups failed because they had a poor product. McDonalds is not successful because it makes tasty burgers. Failing to plan is planning to fail as they say in the SAS. Not many businesses start with £25 grand a month for media, so refine and cut back to what is essential. Can you start with ten customers a month? Can you get your first ten customers by word of mouth or an email campaign? Can you build organically until you can afford £2,500 a month on media. That’s £500 a week. It should be affordable to most small businesses.
The next stage is related to the first. Stage Two is validating your internal documentation with reference to external factors; gap, competitor, on-line and, most importantly, customer analysis. Your existing customers are the most important marketing resource to which you have access. Analysis should be both qualitative and quantitative. A customer may be full of praise for your product, but is he a profitable customer? A more significant buyer may be more pragmatic in his assessment of your product benefits.
Stages 3 and 4 are creative and placement or as they are otherwise known the message and the medium. Don’t think about revenue to start with. Think about market share. Think about where it will come from and why.
I am going to say for the average business, media is the first step, while the message follows. The reason for this is that if you are launching a perfume brand, then the whole range of sponsorship, events, celebrity endorsement and media such as Vogue and 48 sheet posters might figure in your campaign plans. However, if you are launching an App to help coarse fishermen find the best riverbank and keep count of their tally, you will primarily be relying on digital channels. Your media controls your target audience and this, in turn, will determine the creative treatment for your messaging.
Do not, whatever you do, let this kill your creativity. Deploy every asset you have. Use your street frontage, your signage opportunities, your local and specialist print media and your charismatic personality side to gain exposure and awareness. Just accept you will also have to put a standard form headline, text images and video onto Google PPC and social media to gain direct responses. Use this as a bare minimum only. This is where we are now. Everyone is on Google MS, Amazon and so on. You still need to stand out.
Stage five is measurement and reporting. Campaign ROI. If you are a subcontract marketer this will be written into your contract. If you are an entrepreneur, post campaign analysis often gets forgotten.
If you are the marketing decision maker for any digitally enabled business, you are where the rubber hits the road. You will doubtless have fewer resources, less to spend, than you would like. Less even than you consider to be essential, but if you get the basics right you will find a way, because you won’t waste anything. Clarity, simplicity and precision are your friends.
If you are an Entrepreneur, you will doubtless want to do it all your own way. By all means, disagree with me, tell me I don’t know what I am talking about and shout to the sky you will do it your way, full speed ahead and damn the torpedoes. That’s what entrepreneurs and startups are about and that’s why I love them.
Just bear in mind you cannot build bricks without straw. If you want to avoid your business becoming one of the 90%, or even worse one of the 10% you must come up with a reason why your way will succeed when others have failed. Why is it better? What can you do which no one else can? Usually, the answer is You. That is why it hurts so much to put it on the line. If you have measured all the metrics, done all the analysis and, knowing this, you decide to go ahead anyway and give it your all, then if all else fails at least you have my respect. As Randle McMurphy shouts towards the end of “One flew over the cuckoo’s nest”, “At least I tried”.