Choosing a name for your startup can be a long process in which you advise with dozens of people - your team members, co-founder, family. It's important to remember a few things in the brainstorming process in order to avoid potential unpleasantness and unnecessary budget spent.
Originally published in the Techstars Blog
Setting a marketing budget before defining a marketing plan is like putting the cart before the horse. Although there are plenty of online resources that can help you get a general idea of how much your marketing budget should be (depending on the number of years your startup exists, the industry in which it operates, etc.), preparing a marketing road map should come first.
Your marketing budget may change during the budget year, but to make it feasible, it should be built together with a plan that fits the goals of the company and one you could work with on a daily / weekly / monthly basis.
Before creating a detailed marketing plan including budget allocation to the various channels, deadlines, owner and more, there are 5 things to consider:
Startups are agile, and the answer to the question “who is your target audience” may change over the lifetime of the start-up. However, when you initiate your marketing efforts and build a plan and budget, there must be a clear answer to this question. For example, is your product an innovative a/b testing widget aimed at marketing executives in Fortune 500 companies? Is it an app targeted at teenagers ages 12-17 who live in English-speaking countries? Generic marketing targeting e-v-e-r-y-o-n-e (or “anyone who would want to buy the product”) is bad marketing. Even if you want to target multiple audiences, you must define them and often will need to narrow the list of audiences down, depending on your available capital and human resources.
Some would choose to build a persona (or persons) of the potential audience, to better understand who the potential client is and which pain they have that your product can solve. There are several excellent guides online to help build persona and a free Persona builder by Xtensio.
Once you defined who your target audience is, set your goals for the period of the marketing plan. One goal, for example, can be positioning yourself as an expert in the industry (thought leadership). This can be done by guest columns written by the founder/CEO in relevant blogs (for example, Bessemer Partners mapped Israeli cyber security startups for TechCrunch to position themselves as experienced investors in this industry). Another goal can be increasing sales. This may lead to focusing your budget on paid advertising.
A goal can also be recruiting new employees, and for that you may want to reach out to tech blogs who cover cool office spaces like this article in Fortune. There are additional goals you can have, and the answer to the question what are your goals could be “all of the above.” But, in order to prepare an effective and executable marketing plan, I recommend prioritizing these goals.
3. Marketing Channels
After you set your audience and goals, the next question is where can you find the audience. Going back to the example of targeting marketing execs in Fortune 500 companies, the chance of them reading an article mentioning your company at AdAge or AdWeek is higher than them reading such an article on Mashable. If you target the 12-17 age group, are they on Facebook, or like all of us, moved to Snapchat? Try to understand where your target audience spends most of its time online. Often, the chances of finding good and targeted leads will be higher in niche industry blogs. I worked with a company that targeted c-level executives in the hospitality business. The best leads we got was from an article on a small blog, but one that all c-levels in this industry are subscribed to. Sometimes, being featured in a large publication is a matter of ego more than ROI.
While building the marketing plan, ask yourself if there is currently someone on the team that will be able to carry the plan out. If not, is there a need (and budget) to hire a full-time marketing person? If you have an existing team, do you need to hire more people or would outsourcing services like Fiverr and UpWork make do? There are opinions supporting and opposing hiring freelancers, but from my experience, it depends on the person. You can hire an employee with zero dedication and a contractor who gives 120 percent into the project.
This point is derived from the four points above. Only when you set your target audience, objectives, optimal marketing channels and structure of the team will you be able to better understand what budget is needed. The marketing budget should be consistent with the growth to which you aspire. If you decide on a fixed monthly marketing budget throughout the year, it will be difficult to expect that it will support a growth. Start with a realistic budget – both in terms of available resources and also you in terms of your goals (it’s difficult to demand a 10 percent MoM growth with a fixed monthly marketing budget of $1,000). Consider long-term and short-term factors. For example, investing in content and SEO is a long term investment (Google will kill any tricks you try ;-)). In contrast, a PR campaign can and should be limited in time, so you can allocate only a few months out of the budget to it. If you decide to work with a PR agency, you can limit the work to 3-4 months. In addition, as the company’s general budget may vary due to external factors (drop in revenues, declining recruitment, etc.), the marketing budget will vary too, and that should be taken into account as well.
Need some pointers on how to create your marketing plan? Comment below 🙂