The Differences Between Traditional and Startup Marketing

The Differences Between Traditional and Startup Marketing

You’ve spent months, possibly even years, testing and perfecting your product. Now you’re faced with the task of telling the world about your amazing thing. If you’re a typical startup,  you probably have a small budget, a tiny, hard-working team, and an audience different than an already-existing brand. The truth is, traditional marketing doesn’t always work for startups. How you market your startup must be different from the marketing strategy of a larger company.

The Unique Needs of Startups

With an “unproven” product, startups are often taking a risk allocating time and money to marketing initiatives. They make considerable assumptions about their target demographics and often hope for the best. With little to no historical buyer personas or data to compare to, marketing a startup comes with a best-guess approach. Their best arsenal is a detailed competitive analysis, being able to leverage the names of their investors, the amount raised from their funding round, and launching a really needed and really GREAT product. Ahmm, right? At the beginning of the process, all a startup can really do is build, measure and learn. An iterative approach is the best one when it comes to product and marketing improvements. If they aren’t careful and strategic, wasting money on any sort of marketing campaign can be their demise – AirTime and Color are some recent examples. Scary, huh?

Traditional Marketing Techniques Defined

The American Marketing Association defines marketing as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”Traditional forms of marketing include print (newspapers and magazines) and broadcast (television and radio) advertising, direct mail, and telemarketing. We’re all familiar with the multi million dollar ad campaigns on popular media launched by big established brands. A 30 second spot during the Super Bowl can cost a brand $4 million. Chanel’s 2004 ad campaign with Nicole Kidman set them back $33 million, making it one of the most expensive television ads ever produced – it also resulted in record-breaking jewelry sales that year. For these commercial spots, big brands are spending most of their money on production costs, talent and the privilege of media placement, which ultimately, is rather excessive. Not to mention, traditional media (television, radio and print) are aren’t the only vehicles for amplification. There are many other channels on which you can amplify your product or service, and most of them are digital. As for direct mail and telemarketing, unless your startup is a pizza delivery service, don’t bother. These forms of “interruption marketing” are annoying and disrespectful, and will not likely lead to much customer acquisition. Rather than interruption, the key is relationship building. It takes time, but relationships are built by listening (social media is a great tool for this), offering solutions to problems, and establishing loyalty and trust.

Why Traditional Marketing Doesn’t Work For Startups

The average startup can’t afford to book Nicole Kidman for an ad spot or paste their logo all over billboards on highway 101 in San Francisco. And even if they could afford it (using the money from their investors), it’s likely a horrible mistake. It is true that you need to spend money to make money, but it has to be strategic. This is where customer acquisition costs (CAC) need to be calculated. How much can you spend to acquire a new customer? Big brands like Coke have rough estimates, but they can’t easily calculate the exact value of their billboard ads and YouTube channel to the customer. It’s a range. Startups don’t have the same luxury - at least not yet. They need to slowly build upon a steady base of dedicated customers, those that will champion the brand through thick and thin. From alpha and beta users, to a larger scale approach, how a startup reach their future customers is an art. The ultimate question startups ask is “How much should I spend on Marketing?” The answer: 3%. Three-percent of your total revenues. But wait! Startups don’t have revenues. So then what? Well startups should focus on the cost of their time versus the cost of dollars spent on marketing the product. Surely, having raised a round, inclusive in that pitch was a certain percentage allocated to promoting your new shiny product. You would be ill-informed to think that you could do it any other way. Launch a product with no marketing? Stupid. So what matters is not how much you spend, but how you spend it. Not only is a massive campaign with celebrities beyond any startup’s budget – it probably isn’t the best way to reach your market. As well, your audience is more digital, and possibly even more skeptical, than traditional audiences. Your ideal client or customer is less likely to be swayed by celebrity endorsements and more likely to seek out word-of-mouth validation from their community or highly respected influencers. That said, your startup marketing plan can benefit from keeping a careful eye on major brand campaigns, and selectively using these tools, scaled back and adapted for your niche. One of the few traditional marketing techniques that works for startups is sponsoring events. While a startup may not be able to sponsor a major league sporting event, even low-cost local events are a good way to get noticed. Sponsoring events makes it possible to reach your target market, generate leads and make new contacts. Help potential customers remember who you are by giving away swag or holding a raffle (which is a great way to collect emails for your list!).

Low Cost, High Impact: How Startups Do It

Startups need to reject the traditional model and market their product on their own terms. Growth hacking– using social media, content marketing and guerrilla marketing – is a growing technique in which an educated marketer, with a metrics and conversion based mindset, approaches a startup’s marketing initiatives with the end result in mind. Yeah, Paul Graham hates the buzzword “Growth Hackers,’ but we still believe the position is real, cliche or not. A solid digital marketing plan can easily be outsourced for just a few thousand dollars a month, and can have more of an impact than television ads. As KISSmetrics founder Hiten Shah noted in a recent tweet, “Content marketing costs 62% less than traditional marketing and generates about 3X as many leads.” Some key points to keep in mind when marketing your startup:

  • Think about who you’re marketing to and why.
  • Create a portrait of your ideal customer and then figure out how you will reach that person and their friends.
  • The power of word of mouth can’t be underestimated – and social media is essentially a modern way of recommending stuff you like to your friends.
  • Employ good storytelling in your branding and guerrilla marketing tactics.

Finally, although public relations falls under traditional marketing, there is some value in smart, timely PR. A little media coverage of a new launch or innovation can go a long way, and definitely keeps everyone talking about your startup. The perfect combination for startups is a mix of content marketing and PR.

How Onboardly Gets Startup Marketing

Not to be overly self promotional, but I do have to mention why we ‘get’ startup marketing. Our methodology can be used across most industries, but we have elected to work with startups because we love how agile, responsive and open they are to trying out new ideas. Smaller budgets mean bigger challenges. Execution is key but measuring the right metrics is pinnacle to success. There’s no need to force your startup to fit an old model. The good news is that boring old business-as-usual marketing is out. Lean, mean marketing machines are in – and by utilizing digital tools and telling the story of your product, you can make your startup’s budget go far, no matter how small it is.

Are you a startup interested in non-traditional marketing techniques? Which ones are you currently or looking to use? Leave us a comment.

Photo Credit:

What do you think?

One Comment

Great article. It’s definitely hard to define the main communication strategies to implement. It’s not only a question of marketing budget for production and media, but also how to allocate resources.
We found from experience that often times when developing content marketing, we have to do it ourselves – since we’re the subject matter experts. Explaining it to contractors would be time (money)-consuming and could get you started, but would hardly be a process for new, creative content generation.
In startups, the human resources are usually scarce and multi-tasking, so it’s very possible that allocating someone to create an article might impact product development, billing, customer service, or other process.
That’s a struggle, but needs to be done.
Another important topic is about how long to insist on some efforts or channels. As we just saw, even content marketing has a cost, and social media is decreasing the reach generated from free content, forcing us to pay to promote.
Sometimes a “free” media strategy might bring results too late for a startup. A paid media strategy might take too long to prove itself worthy, too.
In my opinion, the best balance is to remember the 4Ps of marketing and make sure you have a killer product at a good price, and a good distribution network. Make sure you include good customer service in “Product”.