Avoiding the Number 1 Startup Marketing Mistake

The 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: 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...

Startups: 10 Reasons Customers Won’t Switch to Your Product

It’s easy for startups to fall into the trap of thinking that customers will switch when given the option of a clearly superior product.  The problem is that switching is often much harder for customers than startups realize.  Having a clearly better product is only one piece of the puzzle. Here are 10 reasons customers won’t switch to your product even though they understand the value of it: Migrating from the existing product is too expensive/time consuming – I put off migrating this blog from Typepad to WordPress for 6 months because I didn’t have the time to do it.  How much better would a photo sharing site have to be to get you to move your stuff off of flickr? I spent years marketing databases and data integration products.  If you want to give an enterprise IT guy a heart attack, tell him you need to migrate a gig or so of data from one platform to another. Skills – It took your potential customers a while to learn to use the stuff they have today and even if your product is much easier to use, the time investment required (even it it’s just their guess of what it might take) to learn it might be enough to turn customers off. Enterprise lock-in – Startups underestimate the power of an enterprise license agreement to stop even a small department from choosing to use a different tool from the corporate standard.  You may be able to fly in under the radar of a CIO that’s standardized on Microsoft or Oracle or IBM in a small department but the moment...

3 Startup Branding Mistakes

Many startups run by founders with little marketing experience worry that branding is something that they are missing and need to spend more time on.  I blame Apple for this.  I cringe when I hear startups tell me they need to do “marketing like Apple”.  The reality is that things that matter for more mature established companies are different from those that matter for smaller companies playing in less mature markets.  Here are three branding mistakes I think most startups should avoid: Mistake #1: Confusing Branding with Design (and Forgetting about Awareness) Design (particularly for your website) is important because it has a direct impact on your conversion rates and how easily people can find what they are looking for.  Branding on the other hand is about what people believe about your company, product and/or services.  For most startups, the problem is not that people have misconceptions about your brand, it’s that they don’t think about you AT ALL.  If nobody ever finds out about you, your beautiful logo, amazing crafted “brand values” and meticulously thought-out “brand image” won’t matter (please note: Apple does not have this problem).  In order to have a brand, you need to be known.  The best way for small companies to get known is to have an offering that a market loves (and ideally loves to talk about). Mistake #2: Believing that you have Control over your Brand Again, your brand is what people believe about your company, and it’s products.  As such, it’s something that a company can try to steer in a direction but buyers will ultimately control.  For example, in the...

Startup Messaging

I was lucky to be invited to speak at DemoCamp Guelph last night. There was an awesome crowd of smart startup people there and a great set of demos were shown. I gave a talk on messaging for startups.  I picked that topic because I think messaging is pretty hard and a lot of folks don’t know where to start to create better messages. The essence of my talk was that good messaging answers the following questions for potential customers: What the heck is it? (meaning can you tell me in plain language what it is that you do) Is it for me? (meaning does your messaging appeal to the segment that you are targeting) Why buy it from you? (meaning what are the compelling reasons to choose your offering over a competing offering) I also noted that these questions need to be answered for prospects in that order.  Trying to differentiate before people understand what you do is pointless. Here are the slides: Startup messaging View more presentations from April Dunford. I want to thank Brydon for inviting me to speak as well as everyone else that took the time to chat with me last night.  I spent years in Waterloo, both as a university student and later when I was working for Watcom/Powersoft/Sybase so it was fun to go back and see how well the startup scene is evolving there.  I need to figure out a way to spend more time out there. If you enjoyed that, you should subscribe!  You can sign up for email updates, subscribe via RSS or follow me on...

A Zero Budget Customer Advisory Board

I’ve run customer advisory boards at big companies and loved them but I’ve generally avoided running one at a startup because of the costs.  Recently however I’ve helped a startup launch a customer advisory council with zero budget.  Here’s what we did. The Setup: Starting With the End in Mind First we laid out the goals for the customer advisory board.  The company in this case has a low-touch sales model and the over-arching goal of the advisory board was to establish deep executive relationships with a group of around 20 customers.  Our goals went far beyond gathering product feedback.  The goals: product feedback and input on upcoming product releases insight into shifts happening in the market, discussing shifts in the customer buying processes feedback on potential changes to pricing and bundles getting customers engaged in marketing activities such as case studies, speaking engagements and other PR opportunities. The Prep: Selecting Who to Invite Based on what we were looking for we decided we settled on the characteristics of the customers we would like to invite: fit into our target segments had been an active customer for at least a year did not have a major open customer support issue (to ensure the meetings didn’t become support sessions) The Offer: Invitations and Expectation Setting We discussed whether or not we would need to offer customers something in order to entice them into joining the board.  In the end we crafted a message that centered around our desire to work with them to understand their needs and serve them better.  The “reward” for taking part would be that their input...

Vertical Marketing 101

I had two conversations last week with CEO’s about marketing to a vertical segment (such as retail banking, healthcare, or manufacturing).  It got me thinking about my experiences doing vertical marketing and what did and didn’t work.  In my mind, great vertical marketing comes down to executing well in three areas – Messaging, Content and Sales Enablement.  Here are a few tips: 1/ Messaging – Taking a horizontal product and putting a light coat of vertical paint on it is rarely effective because customers won’t find it credible. The best products for a specific segment were designed from the ground up for those segments.  That said, in my experience it IS possible to take what is essentially a horizontal product and market it to a vertical successfully if you are prepared to go very deep into specifics of how the product addresses the unique needs of the market.   If you value statements are things like “lower costs” and “ease of use” you aren’t there yet.  If you start getting into things like how your product can help companies be compliant with their industry regulations (such as HIPAA for healthcare in the United States, Basel II/III for banking in Europe, FERC regulations for energy companies in the U.S., etc.), how your product can deal with a particular problem common to the industry (such as managing a large number of part time employees in retail apparel or reducing carried inventory for manufacturing), you are getting closer.  Not only do you have to illustrate this in your messaging, you will need to prove your deep understanding of the segment in your...
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