Avoiding the Number 1 Startup Marketing Mistake

08/19/2010

Trip Caution 150x150 Avoiding the Number 1 Startup Marketing MistakeThe past 2 days I’ve answered a bunch of marketing questions from entrepreneurs on Sprouter‘s new Answers forum for startups (more on that later).  There were a few themes that emerged but one really came into focus when I got this question:

What is the number 1 startup marketing mistake?

My answer?  They try to market to everyone.

I understand how startups get there.  There is a sort of straightforward logic that says that the more people that are aware of your product, the more will check it out and ultimately pay you for it.  This would work if your product was suitable for everyone (it isn’t) and you had a marketing budget big enough to reach everybody (you don’t).  The trick to effective marketing is focus your efforts on the segments that are the best fit for your product.  Those segments have the strongest need for your product and the best understanding of the value you offer.  By marketing to everyone, you run the risk that the folks that are the most likely to buy from you either never hear about you or when they do, can’t recognize the great fit your product is for them because it appears to be built for “everyone”.

Here are 4 reasons you should focus your marketing efforts on specific segments:

  1. Targeted Messaging and Offers are Always More Effective – If you are selling t-shirts for fashion conscious 20-something’s you will probably emphasize the styling.  If your business is selling t-shirts to kids sports teams you might emphasize the durability of the shirt or the low cost.  If you are selling t-shirts to everyone you’d either just talk about t-shirts in a boring vanilla way or touch on both style and durability (and  10 other things) so superficially that no style conscious 20 something, nor buyer for kids sports teams would think your offering was for them.  Messaging built to appeal to everybody appeals to nobody.
  2. Word of Mouth and Social Proof Works Best within Communities – Word of mouth travels through communities. If you are focused on everyone, chances are you will get a little word of mouth everywhere but not enough to really register within any particular group. If instead you focus on a particular segment it’s more likely that your story will get heard and shared within that particular community.  Customer examples, references, referral programs (and other tactics we put in the “social proof” bucket) are also more effective.  People can see that folks just like them (or companies just like them) are using the product in ways similar to how they would.
  3. Getting Heard Above the Noise is Easier in a Small Room than it is in a Stadium – Small companies are at a disadvantage when it comes to visibility in a particular market.  The broader that market is, the more resources it will take to be heard above the noise and the more you are going to be going head to head with the big guys.  By specifically targeting smaller markets, you have the opportunity to become a bigger fish in a smaller pond.
  4. Traction Builds on Traction – Acquiring customers is hard work when nobody knows who you are but after a while you start to be known in a market and customers begin to come to you rather than you having to always pay to get their attention.  Get good traction in a particular market and suddenly that traction will accelerate on its own.  This is easier to do when your market is narrow (for all of the reasons outlined in the previous 3 points).  Imagine how many customers you would have to bring on board to get to that stage if your market was “everyone.”

As I mentioned earlier in this post, the folks at Sprouter have launched their new “Answers” feature.  Sprouter is an online community for startups.  Their new “Answers” feature allows entrepreneurs to ask questions and get answers from a panel of startup experts.  I’m happy to be part of that along with folks like Amber MacArthur, C.C. Chapman and Dan Martell.  You can get access to the experts here.

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