What are the best marketing strategies for startups? How can you pick the best strategy for your new company?
There are many marketing strategies for startups. Marketing is an important part of your business, and choosing the best marketing strategies for entrepreneurs will help your business launch and stay strong.
What Are the Best Marketing Strategies for Startups?
Many Silicon Valley entrepreneurs underestimate the importance of distribution, which encompasses whatever it takes to sell your product (advertising, sales, marketing, and distribution channels). But understanding distribution and having a plan for it is critical to a company’s success. Marketing strategies for startups should be part of designing your product.
We often overlook the importance of distribution because society in general looks down on salespeople and advertising as dishonest and manipulative. Silicon Valley entrepreneurs take this a step further—because of a bias toward building rather than selling, they often believe their product is so superior it should sell itself: if they build it, customers will come.
But customers won’t buy your product automatically; you have to sell it, which is more challenging than many entrepreneurs and engineers realize.
Marketing and Advertising: Underrated Strategies for Startups
Marketing and advertising are effective for selling low-priced products for mass consumption—such as package goods sold in supermarkets—that don’t lend themselves to viral sales or traditional sales by reps. There are marketing strategies for startups that can help.
For example, to sell laundry detergent in large retail outlets, Procter and Gamble creates television commercials and newspaper coupons, and it designs its boxes to be eye-catching in stores.
Advertising can be effective for startups as well—but only when your customer lifetime value acquisition costs make traditional or complex sales methods unfeasible (since the human labor cost of sales exceeds the value of gaining a customer). The company selling $100 eyeglasses, Warby Parker, was able to get its affordable glasses in front of millions through quirky TV ads.
On a cautionary note, startups shouldn’t be tempted by the ego boost of a high-profile ad campaign—it’s generally a waste of money to vie with larger companies in an unending battle for attention via TV stunts.
Viral marketing is the cheapest and fastest way to sell a product—by using it, people encourage additional users to participate. Facebook and PayPal both grew quickly through viral marketing. Every time someone shared with a friend or made a payment they pulled more people into the network. This is one of the common marketing strategies for startups.
Viral marketing or distribution can trigger exponential growth. The effect should be seamless and fast. YouTube videos or internet memes can be seen by millions in a very short time: In just seconds, people see a cute post, feel a glow, and share it.
PayPal started with only 24 users (employees). But the company achieved extraordinary growth through a form of viral marketing by paying people to sign up and refer their friends. In a few months, PayPal had hundreds of thousands of users. Because they charged customers a transaction fee, revenue exceeded their customer acquisition cost. Marketing strategies for entrepreneurs helped achieve this.
The company that’s first to dominate a key market slice with viral capability will ultimately dominate the entire market (be the last mover that no one else can match), if it expands judiciously. PayPal first dominated a key segment—”power sellers.” Once the company had corralled these intense users and began expanding, no imitators could catch up.
Besides selling your product, you need to sell recruits, employees, and investors on the value of your company. You’re part of your product, and you’ll need to know marketing strategies for entrepreneurs.
Some entrepreneurs fall for the human relations “lie” that their company is so good people will be clamoring to work for it (this is like the “great products sell themselves” distribution lie).
The funding version of this lie is that investors will be knocking down your doors to invest.
However, great attention doesn’t come without a public relations strategy for selling your company to the media. While entrepreneurs may be wary of the media, they shouldn’t try to ignore it. Marketing strategies for startups should definitely include it. Media exposure can help you attract customers as well as employees and investors. Any good job candidate will research your company—what comes up in a Google search should be part of your overall public relations plan.
The best marketing strategies for startups may take time to master. However, make sure you develop the best marketing strategies for startups before you launch, and have a solid plan.