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The Hierarchy of Startup Marketing Needs

6 Nov

For emerging businesses, it’s often difficult to know where to start with marketing. With finite resources, entrepreneurs need to focus on the things that will have the biggest impact at each stage of the business. Since marketing includes so many different types of tasks and activities — from researching customer needs to building demand — it can be challenging to find the right place to start.

While every business is different, it is helpful to think about marketing as a series of distinct activities with a proper sequence. The first thing to think about — getting your product right — is the precursor to everything else you’ll do. The most aspirational stages such as building broad awareness and love for your brand require all the other parts of your business and business model to be working well.


I think about the sequence or hierarchy of startup marketing needs as a simple pyramid with the essential marketing activities on the bottom and the aspirational activities on top. As entrepreneurs go up the pyramid, the marketing components become more expensive and more complex and return on investment becomes increasingly difficult to measure.

The pyramid has seven layers starting with a product foundation and building up to brand love. Here are a few thoughts on each of the levels of the marketing pyramid:

Product — You can’t build a great brand with a mediocre product. Marketing requires making promises to potential users and customers. If the product doesn’t live up to expectations, nothing else matters. Get the product right first before even thinking about investing in other marketing activities. Read more here.

Personality — The world is full of perfectly functional products that nobody cares about. The most successful products have personality: they are interesting, engaging, and likeable. They find their voice. They define what is special about the way they serve their customers and use their mission and values as a filter for product design and communication. They are willing to take a stand and fight for what matters to them and their customers. For more, read this classic blog post on Minimum Viable Personality.

ExperienceSo you have a product and personality, it’s now time to take the next step and make sure that every interaction with customers is as good an experience as it can possibly be. Great customer experiences are carefully crafted and orchestrated and — increasingly — this is the job of the CMO.

Experience is different for every company but almost always requires coordination across multiple people and disciplines. You may need to think through the purchase experience, the way you interact with customers, the experience of opening product packaging, the way that people reach you for questions,  or how customers  get help when something goes wrong. You’ll need to think about the way you communicate with customers, the way you thank customer for their business, the way that you train employees to create as consistent an experience as possible. It’s the visual identity that you use to make sure company or product and all of your communications recognizable.

DemandDemand drives sales which drives revenue and profits which are the lifeblood of any business. For this reason, too many entrepreneurs  jump first into demand generation before thinking about product, personality, and experience. This is almost always mistake.

For most businesses, the quality of the product, personality, and experience determine the economics of demand generation. If you product is differentiated, compelling, and enjoyable than your cost of acquisition will be lower. When you acquire a customer they will be more likely to refer their friends or colleagues. Good things will happen.

While there are a near infinite number of methods to generate demand, management of demand generation really comes down to a few metrics and techniques. The starting point for demand generation is to set a targeted cost per acquired customer (or product sale) based on the financial model of the business. The next step is to test — to try as many methods and messages and designs and to measure the results. The best demand generation methods are scalable and able to deliver large numbers of  acquired customers at the targeted price.

Demand generation is where many companies begin to invest significant resources on marketing as part of their business model.  The more revenue and profits marketing programs are able to drive, the more smart businesses are willing to spend.

Credibility — For people to trust a new product, company, or approach, they need a reason to believe. It’s marketing’s job to help potential customers understand why their offering is better than other alternatives that a business or consumer might consider.

In consumer categories, credibility may come from expert opinions, celebrity associations, exclusive distribution arrangements, or relationships with other businesses that people trust, among other options. In the seventies, for example, Trident’s claim  that “four out of five dentists surveyed recommend sugarless gums for their patients who chew gum” provided credibility for their saccharine-sweetened gum. Sporting gear manufactures relationships with prominent athletes and teams provided similar credibility for their products. For many business-oriented and technical products, credibility often comes from commissioned research, surveys, white papers, awards, or benchmark reports that help people understand the value of the offering.

Credibility comes next in the pyramid because it’s the first step towards broad awareness. To engage people who are less likely to be early adopters of your product or service, you’ll need to be able to demonstrate credibility.

Awareness — For people to choose your product or service to solve a problem or meet a need, they need to know that your solution exists.

The first step to building awareness is clearly defining the audience that you need to reach. The narrower the audience, the easier (and cheaper) it will be to grow awareness. For a useful pharmaceutical that requires a prescription, it should be easier to get thousands of doctors to prescribe the product than to get millions of patients to request prescriptions. If you are selling auto insurance, you probably only want to reach people who own or drive cars.

Once you define your audience, there are many ways to build awareness. In the strongest businesses, awareness grows naturally and virally as your customers naturally interact with potential customers. Unfortunately, few businesses are lucky to have these dynamics. Other businesses need to invest to get their message out through advertising, public relations, social media or through the development of programs that encourage customers to recruit other customers.

Unlike demand generation techniques which typically focus purely on return on investment, many types of awareness investments are more difficult (but not impossible) to measure.

For consumer businesses, building broad awareness for a product requires strong execution on all of the levels of the hierarchy plus sustained investment in building awareness over time. In 2013, for example, 9 companies spent more than $2B each on U.S. advertising.

Brand Love — This is where every business wants to be: to have their product or services broadly known and loved by the people they target. Typically, it takes perfect execution on all of the above marketing elements to achieve brand love.

To get to brand love, you need to start my measuring every element of the customer experience. Using a tool like Net Promoter Score which looks at high likely a customer is to recommend your product or service.

But measurement isn’t enough to be great. You’ll need to get it right at every level of the pyramid including a great product, personality, a memorable product experience, and broad awareness in the markets that you care about.


The Nurture Fallacy: 5 E-Nurture Marketing Myths

16 Aug

Marketing automation companies have built a big business by creating tools for electronic “nurture” programs. Now, B2B marketers around the world are executing “e-nurture” programs designed to take prospects on a multi-step journey designed to increase prospect education and awareness, and ultimately, to lead prospects to buy.

It’s not uncommon to see B2B marketers execute complex drip and trigger campaigns with seemingly endless tracks and branches. In some organizations, nurture complexity has outstripped the ability of charting tools to diagram the planned  communication paths.

While marketers must focus on the customer journey, the current e-nurture fad fails to deliver on the value that it promises. Here are the five commonly held beliefs that I believe to be myths:

Myth # 1: “You can take prospects on an email journey”

While email remains an invaluable tool for marketing and demand generation, it is a horrible tool for guiding prospects on a linear educational journey. Here’s why: only 10.8% of email is ever opened, and only 30% of mail that is opened is actually read (the rest is skimmed).

Most nurture campaigns are built on the assumption that a prospect will internalize a core message or idea and will progress on the electronic customer journey from message to message. The fact is that very little commercial email is read, very few ideas are internalized, and very few people are persuaded by content delivered through email. While some portion of people who open may click through and interact with online content, that proportion is almost always a small single digit percentage of the overall campaign audience. By the time the next message arrives, the educational benefits of the previous message are almost always forgotten.

Myth # 2: “Content should be sequenced along an educational path”

To maximize sales conversion, email campaigns should promote the best content (based on conversion rate) vs. optimizing content to follow a progressive educational path. Nurture campaigns should be focused on sequencing content based on effectiveness by first merchandising the content with the highest impact that hasn’t yet been accessed by a particular prospect. It’s common sense: sequencing content based on performance vs educational narrative will always drive better results.

Myth # 3: “The more tracks and steps, the better”

As marketers build teams and programs around nurture strategies, they often drift towards micro-segmentation of the prospect database based on interest and sales stage. The result is an endless tree of options and content as prospect interest evolves and sales stages change.

For marketing and sales, the typical result is painful complexity and a proliferation of content required to address every interest/stage permutation. In most companies, a few pieces of content do the real heavy lifting and have the biggest impact on persuasion and conversion. A proliferation of nurture segments dilutes the impact of the best content and creates heavy demands for new content that inevitably underperforms and quickly becomes out-of-date.

Myth # 4: “Prospect activity tracking is the secret to an effective nurture program “

Since only 10.8% of email is opened, a basic nurture practice is to resend messages to people who ignore the first message to try to get their attention a second, third, or fourth time. Continue reading

The Perishable Lead: Why Don’t Good Leads Ever Get Recycled?

31 May

At this point in my career, my marketing teams have generated hundreds of thousands of leads that never received a call. If sales and marketing alignment had been perfect, these leads could have generated billions of dollars of pipeline and many hundreds of millions of dollars in revenue. In addition, these teams have generated more than 100,000 leads that have been followed-up just one time, often with a single email, voice mail, or phone conversation.

For most organizations, recent leads are an incredibly valuable asset that is inevitably underutilized.Why?  The fact is that most B2B organizations do not have sophisticated enough lead scoring and routing processes to recycle great leads that, for one reason or another, never turned into sales opportunities.

So what does it take to effectively recycle leads?

  • A sophisticated scoring process: To effectively recycle leads, companies need to score the lead at least two times. The first score is based on the initial inquiry and the successive score is based on time-based degradation as well as subsequent prospect engagement. Unfortunately, this is very difficult to get right. According to Sirius Decisions, “Best-in-class companies define and execute targeted nurture efforts specific to disqualification reasons, product interests, industry and buyer role. An emerging best practice is to score disqualification reasons and weight responses to nurture-specific offers distinctly from non-nurture actions to recognize progress along a prescribed path designed specifically for reactivating recycled leads.”
  • A multi-pass lead routing process: To effectively recycle leads, you need the ability to present aging leads back to sales for follow-up calls and conversations. To get this right, organizations need to be able to granularly track the initial disposition of the lead and then to re-present the lead to sales at the appropriate time based on prospect activities or time-based follow-up best practices.
  • Strong Lead Generation Analysis Capabilities: In most organizations, sales follow-up capability is limited. Smart organizations are able to dynamically prioritize sales follow-up by balancing the quality of the lead, the level of prospect engagement, and the degradation of the opportunity resulting from the passage of time. According to Sirius Decisions, “Best practice organizations perform deal reviews on recycled leads that progress into active opportunities to determine common attributes. When observable events are identified (e.g. contract expiration with a competitor), marketers can incorporate them into recycle-specific scoring models.”

For many organizations, the first step to lead recycling is to drive second or third contact attempts to recent leads that have never been reached. Beyond that, organizations typically focus on nurture marketing programs to recent leads with the hope of driving prospect re-engagement. As CRM and marketing automation tools continue to improve, smart companies will figure out how to value and prioritize aging leads and to target sales efforts towards the highest value prospects.


McKinsey: 2/3 of Companies Betting Heavily on Digital Business to Drive Revenue Growth

30 May

A new study by McKinsey & Company on “Minding your Digital Business” examines the rapid growth in corporate investment on Big Data & Analytics, Digital Marketing & Social Tools, and Flexible Delivery Programs and the sky-high revenue expectations that businesses are attributing to these new digital business strategies.

 The fact that McKinsey completed the study as a “Digital Business” report and not an analysis on analytics, sales, or marketing is a reflection that increasingly every business is a digital business. According to the study, 68% of companies rate “Digital Marketing & Social Tools” as a top corporate priority, 65% rate “Big Data & Analytics” a top investment priority, and 56% says the same for “Flexible Delivery Programs.”

The expected impact of these digital business strategies is sky high: 66% of companies expect a positive impact on operating income over the next 3-years. Of this group, 35% expect an increase of 10% or more.

For companies, data and analytics will likely be the biggest driver of business impact. As digital interactions with customers generate unprecedented reams of data, companies are organizing to turn insights into revenues.

Practically speaking, this is easier said than done. Companies report that organizational structure, IT infrastructure, a lack of quality data, and internal leadership gaps limit their ability to achieve their digital business objectives.

See the full study here.

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