How Startups Need to Think About Marketing Today
No doubt the life of an entrepreneur is hectic, especially in the current environment! You’ve got to accomplish everything, seemingly all at once, with not enough people or money to get it done. For most young companies trying to break through and accelerate their growth curve, the focus is on product and sales. Marketing has the reputation of being an expensive endeavor of secondary importance, to be considered “later”.
This article is meant to change that point-of-view and clearly demonstrate why marketing is a fundamental aspect of any young companies’ priority list, up there with the MVP, the investor pitch, and the first few customers. And most importantly, why marketing needs to be a core component of an investor pitch – especially an exit, defined as either new investment or company sale.
Scaling the Hockey-Stick Growth Curve
In the typical investor pitch, the focus is on the product’s unique features, the enabling technology, and of course the potential sales pipeline. Knowing that investors are looking for outsized returns, the pitch always leads to the usual hockey-stick revenue growth curve projections. But that won’t happen without marketing. What is the scalable model that gets you there without hiring an ever-expanding army of salespeople? The answer is marketing. However, in many of these investor presentations, the plans and the models used to explain what marketing can do are a bit flat, sometimes even naive. Seemly created by the engineer-founder, the CFO, or an inexperienced marketeer. This needs to change.
Marketing Has Changed
Years ago, companies relied on their marketing department to do great branding that made the company appear modern, credible and interesting; look good at trade shows; and get people to call. Things are very different now. Today’s marketing function has become a crucial component to a company’s growth strategy, more so than at any time in history.
That’s because today’s customers – whether consumer or B2B, are doing around 70% of the research they need to make a purchase decision before a company perceives that they are a prospect. As the online experience becomes the dominant source of product information and selection, the “MarTech” (marketing technology) stack is growing more sophisticated, more effective, and more necessary than ever.
The Latest MarTech Rage: Intent Marketing
The “MarTech” stack is so complex these days – its capabilities are truly remarkable. The latest rage is “intent marketing” which can identify exactly who is hunting around the internet for information on a product. And for those companies who tap into this readily available knowledge – it will no doubt provide a leg up on the competition and help increase sales. But that’s just one idea, there are so many others. Today MarTech enables marketing to seek out and nurture good prospects – and hand them over to the sales team. Overtime when enough experimenting and refining have been completed, the marketing team has a very effective competitive weapon to scale the business.
Meeting Investor Expectations
Without such capabilities, a sales team is not only uncompetitive but not scalable. Instead of spending time with prospects at the bottom of the funnel who have demonstrated interest and even intent to purchase, salespeople without effective marketing tools are stuck wasting their time with low quality leads at the top of the funnel, or even worse, wasting their time cold calling people who may have the characteristics of an interesting prospect, but have not actually shown this interest.
Today’s FinTech investors are looking for companies that know how to scale efficiently, and these marketing tools have become expected. Not necessarily the specific tools, but certainly the outcomes. When a company is measured against the portfolio’s benchmarks – these tools are essential, especially to the levels that are needed to satisfy investor’s expectations on high growth and high efficiency.
Growth Beyond Sales
While the sales pipeline is very important to a start-up because it represents serious and measurable near-term revenue, it certainly does not explain to investors how the company is going to gain market traction and accelerate growth in order to meet their investor’s expectations of hockey-stick growth.
Investor pitches must have a significant marketing section that explains a lead generation and nurturing process, similar in detail to product development or revenue model. It must have a credible business model that projects how each marketing channel will perform in terms of expense and results; and it must explain how the plan will enable the sales team to scale, seemingly beyond the boundaries of a sales-only approach. This presentation must be convincing that marketing has the ability to super-charge the sales team, maximizing their results because they are only dealing with highly qualified prospects – which makes their close rates significantly higher than without it; as well as superchargers all the other sales metrics. These are now the table stakes.
Marketing – Not Just for Big Companies
Granted, the big marketing campaigns we all know and talk about are for big companies with lots to spend. CapitalOne, Geico, QuickenLoans, and others like them spend billions. But there are many effective marketing programs that young companies can afford and must find the time to pursue.
The first step is to clearly articulate the business concept, why it’s superior to existing alternatives, and the customer’s pain points. Although this seems obvious and understood by everyone, from my experience looking at hundreds of startup and high-growth company websites, most need a lot of work. Without question – if your message is wrong, then none of your marketing can be right!
After that, there are a slew of affordable marketing programs. Some are foundational like blogging and creating industry survey report that establishes the company as a subject matter expert and helps with search engine optimization. There are highly focused programs often referred to as account-based marketing programs that are hyper-focused on key accounts in partnership with the sales team. And finally, there is affordable software that will produce the magic mentioned earlier and super-charge a sales effort.
Marketing is For All High-Growth Companies
When you are building that investor pitch make sure your plans include a serious look at how marketing will enable the company to scale and gain traction in the marketplace. Know the metrics that investors are looking for and show how marketing will enable sales to attain what appear to be aspirational goals. Today’s MarTech capabilities are truly amazing – and should be part of the growth plan.
About the Author
George Ravich is a veteran of the FinTech and InsurTech industries, having been CMO of five industry leading companies. During his 25+ years as a marketing leader, he has become known as an innovator and subject matter expert on transaction banking, predictive analytics, and digital transformation. He leads his own marketing consulting firm that is focused on building the marketing foundation for high-growth companies, as well as developing a marketing function in preparation for an investment exit. George has been an active member of the FinTech and InsurTech communities in New York, Hartford, London, and Israel. He was a mentor for the New York based FinTech Startupbootcamp and was a mentor for SWIFT’s Start-Up Challenge. He currently is a mentor for the Startupbootcamp Hartford InsurTech Hub located in Hartford Connecticut.