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Entrepreneurialism Information |
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Double Down on Marketing
If you want to compete in the world of high growth startups, you better know how to play the marketing game. Marketing has become a big stakes game where companies are betting fortunes on the success of their products. Nowadays if you can't play the big marketing game you may not even get the attention of the customers you need to grow your business. So how do you compete if you don't have the cash to run with the big dogs? The answer lies in growing your marketing budget by doubling up on your marketing investments quickly. Chances are the capital you need to compete in this game is right under your nose, you just need to know where to look for it. Make marketing an investment The first step to growing your marketing budget is thinking about it differently. People used to think of their marketing budget as a line item expense that they wrote checks for throughout the year. It was almost like rent - a normal cost of doing business. The mistake these startups made was that they treated marketing like an expense. It's time to start thinking of your marketing as an investment that you expect to yield a return. Like any investment you would make in the stock market, your marketing investment should generate a specific monetary return in an expected period of time. For our purposes, we're looking for short term investments that will produce enough working capital to re-invest quickly to grow our marketing. Grow marketing, grow customers We all know that marketing attracts the customers we need to generate more sales. For this reason, if we want to grow our position in the market we're going to need to grow our marketing budget as fast as possible to grow our customer base. The key to growing the budget lies in generating cash flow from the returns on our marketing investment. Short Term Returns People used to take the long view of their marketing budgets - planning them a year out. This "set it and forget it" approach may work well for Ron Popeil, but smart marketers throw that line of thinking out the window. Instead, we budget our marketing based on months, or quarters at the longest. By looking for marketing opportunities that provide short term returns we create opportunities to increase our marketing budget rapidly with the additional capital we've generated. The faster we can provide a return on our marketing the faster we can put that money to work in the next cycle. The faster we put that money to work, the more money we generate from additional customers. The math is straightforward, but getting there can be a little tricky. Finding the winning hand It would be easy if we already knew what marketing strategies returned quickly and could just double up our bets on those efforts. Unfortunately we don't know what works until we try it, which costs money and time. Finding this winning hand to double down on can become a job unto itself. A popular way to test different messages and reach your target population quickly is Internet advertising. Unlike TV, radio or print, Internet-based campaigns are relatively cheap and highly trackable. Use the Internet to test out different messages, advertise on different Web sites, and gather feedback quickly from customers about what works. You can then apply your findings toward riskier (and more expensive) media. Your goal here is to find the campaigns that will give you the opportunity to invest significantly more dollars with a nice short term return. If it's the right campaign, you will be able to spend incrementally more every month, constantly rolling last month's proceeds into next month's increased marketing budget. Don't shotgun The last thing you want to do is try a "shotgun" approach toward marketing where you try everything at once and wait to see what happens. This can get very confusing because you often don't know what's working and what isn't. Instead, focus on a few strategies at once, measure them completely, and then try a few more. Double down Once you've found some strategies that work now it's time to put your money down. Invest heavily in those campaigns and keep plowing the returns back into the same winning hand. This is how you scale your marketing to create the types of campaigns that move markets and win customers. Fast growth companies are always looking for ways to exponentially increase their marketing spend, but only on campaigns that have a demonstrated track record for success. Next time when you come to the table with the big boys, look for that winning hand, double down on your bet and clear out the competition! - Wil Wil Schroter is a serial entrepreneur, author, and public speaker. Wil has been recognized as U.S. Small Business Person of the Year, twice as the Ernst and Young Entrepreneur of the Year (1999 & 2004), and is a member of the Business First Top 40 under forty. Connect directly with Wil at wschroter@yahoo.com. Visit http://www.goBIGnetwork.com.
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