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The Digital Native Marketing Trap, Another Startup CEO Blindspot

trapI’ve already alluded to the “digital native marketing trap”, a syndrome that plagues many startup CEOs who were birthed in and grew-up with online and the Internet. For them, everything can be done online, because they only see online marketing via growth-hacking techniques, user activity and analytics data.

And there is another parallel trap,- the startup CEO who is too focused on their product and its features, even if they are growing a community and creating new categories around their products. It’s a trap because they see that as the only answer to marketing.

In both cases, that’s not enough.

There are 3 types of marketing you need to think about:

  1. Product Marketing: focused on product features and their differentiation.
  2. Digital Marketing: manifested by online campaigns mostly (has almost replaced direct marketing).
  3. Corporate Marketing: brand and market position related.
 

Most startups do well in understanding product marketing and online marketing, but they fail at corporate brand marketing, and they ignore the power of the pull that a strong brand can give them.

I have written plenty about how to grow your brand as a startup, and why it’s important:

  You can push push push, but at some point in time, you need to grow your brand, and that will pull customers and users to your product with less effort into it.

Get out of your online cocoon, and get into the real world which includes physical touch points, and also includes reaching the market that you don’t currently have, and let your prospects know that you exist.

Don’t be that digital native startup CEO who falls in the online+product only marketing trap.]]>

Why a Strong Brand Means Higher Growth and Better Valuation for your Startup

Beyond having an amazing product, nimble engineering, and a great team of people, marketing excellence is the next big differentiation factor that startups should focus on. And within marketing, a smart brand strategy is one of the biggest levers available. Ignore it at your own peril.

Sadly, the typical marketing books that we are still relying upon were mostly written during the era of large company marketing, and focused on established brands. If you already have a market position, own some market share, and are releasing one product after another, the kind of marketing you need is very different than when you’re a startup with nothing to begin with. Marketing an existing brand is very different from building and growing a new one. And if you hire a marketer who has always worked with established brands, their experience will not include what it takes to create a new brand.

In part, the recent explosion in “digital marketing” has overshadowed our activities and understanding of marketing practices. In reality, marketing has 2 sides: a quantitative/measurable one, and a non-quantitative one that appeals more to the mind, perceptions, expectations, experiences, feelings and emotions of the market. This non-tangible side of marketing is the most difficult to understand by a startup CEO who is typically either an engineer or a product-focused founder who has never experienced, witnessed, nor worked with great marketers and understood the how, what and why of marketing. That non-quantitative side is also harder to measure, and rather is the impetus to a trickle down effect with results that become visible much later.

Overall, startup marketing is different. In the same way that your product evolved from being an embryo (starting as a Minimum Viable Product), to a more mature version, marketing also needs to evolve and grow with your startup evolution.

Marketing’s Role Changes Based on Your Stage

We could break-up marketing’s role into three different phases of evolution, each with various needs and activities according to the following table:

Startup Stage

Need

Key Activity

Marketing’s Role

Early

MVP Iterations Hacking growth

Looking for Product/Market Fit

Value Proposition

Growth

Quantifying and systemizing growth

Expansion via Repeatability

Messaging Differentiation

Scaling

Market Leadership

Brand Awareness

Brand Strategy

Most startups figure out what they need to do in the early and growth stages, and that type of marketing is very focused, specific and rather quantifiable. But things get more tricky and difficult in the later scaling stages when you need to let marketing become an effective weapon that differentiates you in the market. In the scaling stage, working on your brand becomes a key aspect that needs to be developed proactively. And it starts with a strategic brand assessment and positioning development exercise, with the goal of developing a comprehensive brand messaging architecture that can be deployed in the marketplace.

Enter Brand Strategy Development

Brand strategy is a soul searching type of work that you do in order to find your unique brand position as it should be amplified into the market. Few people do brand strategy well, as it takes a trained eye to pick out the needed insights, and it is typically done from the outside, by a brand strategy or marketing professional expert.

A common pitfall some startups fall into is to hire a brand agency who will sell their “branding capabilities”, but these types of projects typically fall short of providing anything of strategic value, as they will gravitate around the brand visual identity, which is one the last tactical steps of brand strategy. Here’s an example of what a brand agency sees in terms of “brand strategy”, and you must avoid this type of work because of its low value: 7 Components of a Powerful Brand Strategy.

A brand is a lot more than a stylized name, color, sound or logo.

Another mistake is to assume that the internal marketing department can figure this out. Unless you have a marketing CMO or VP who has had experience with real brand strategy, you will fall short, and undoubtedly land in the realm of the first pitfall category. A third type of mistake is to fumble your way via A/B testing of marketing slogans on the website landing page, and take that as an accurate brand messaging test.

But you can’t short circuit a proper brand strategy development.

When you start developing the brand strategy, you need to interview several customers, prospects, and partners; conduct a competitive assessment, a market assessment, a review of what analysts or experts are saying about you; and then you can start to develop some hypotheses to determine your key differentiators. You need to extract your single most powerful differentiator, the one idea that you should be identified with,- that one promise that you must make and keep to build your business.

Marketing is telling your message very clearly and simply to a segment of the market who has never heard about you, with the goal of making them want to interact with you (by buying your product/service or using it). You don’t just market to your existing customers or users with the hope they will relay their enthusiasm and advocacy to their peers. You need to do more than that.

A brand architecture includes the following elements:

  • Brand Attributes (a series of qualities and strengths your brand possesses)
  • Brand Position (and its key statement)
  • Brand Messages (customized by audience segment)
  • Brand Communications (via customer touchpoints, living it internally and physical environment/sensory)
  • Brand Visual Identity and Standards (the design, styles, and guidelines that will govern the visualization of your brand)

If you have a strong brand, the perception and the reality are close to each other, because your promise and your delivery are total in sync.

Branding is how you transcend and project your values into the customer mind, and the memories you leave them with, each time they use your product. It could have little to do with the product features, but rather everything to do with how the customer feels after they interact with your product.

Branding is how your prospects think about you before they experience your product.

Simplicity and clarity are part of a strong brand messaging. The message must be easy to understand. There is a genius behind crafting a memorable message that sticks in the mind of your prospect, as a smart position that matches what you are really about.

Starbucks’s promise is not great coffee, but rather comfort in a place that’s not your office and not your home.

Here’s how Brunello Cucinelli, the CEO/founder of the company sporting his name, a world leader in the cashmere products, explains his brand in an interview reported by Om Malik. It is a case where he clearly associates his company’s purpose- “dignity” with his brand. For Brunello Cucinelli, his brand is that catalyst that unites the inside of his company to the outside market that consumes his products. “I wanted the brand to have my face. I wanted the product to convey the culture, life, lifestyle, dignity of work. I wanted a profit with dignity. Because the press all talk about the moral ethics of profit. Why can’t we have a dignified profit then?”

Better Growth and Higher Valuations

A strong brand has two key beneficial aspects: growth and valuation.

A strong brand creates pull in the marketplace, because it lets your mindshare be larger than your actual marketshare. When a large number of business prospects know about you, you render your sales people’s job easier because the prospects they encounter will have heard about you and already have a favorable opinion of you. That way, the salesperson can focus on their job without an uphill battle, or time spent trying to explain who you are. And in consumer markets, a larger mindshare means more users will eventually decide to try your product.

Startups that don’t focus pro-actively on building their brand are making it harder on themselves to command a higher valuation in the venture or capital markets. As much as users and engagement contributed to your early valuation, brand and its strength are an amplifier of your market value. It is like a premium that the market or investors bestow on you, as a reward for having penetrated their minds and the market at large.

Grow your brand in order to grow your startup.

Messaging, Positioning, Branding for Startups: What Happens After Product/Market Fit

Many startups do a poor job explaining crisply what they do, especially during their early stages. They often confuse or ignore messaging, positioning, and branding.

But as soon as product/market fit is achieved, and you enter a phase of predictable, steady growth, the stakes get higher, and you need to up your marketing game. Maybe that happens at about 20 employees, or maybe at 50 employees, and I’ve even seen 100-employee startups who still haven’t given serious attention to their strategic marketing efforts. I’d like to help them change that.

Messaging, Positioning, and Branding are intricately related concepts, and represent 3 important slices of startup marketing. Messaging is the series of orchestrated and planned communications tidbits you want to tell the market about you, in the simplest and clearest possible way. Positioning is what you do to the mind of the prospect, not what you do to your product. And Branding is a promise you make to your market and something you deliver in your product that makes your customers love the experience you give them.

Until your product speaks for itself, you have to do the talking, and you need to follow through with an easy to defend position, crisp messages and a brand promise that you live up to.

Sometimes the narrative takes care of itself by users who define well what you are about. Sometimes it doesn’t. The message is not always embedded in your product unless you are Twitter, Instagram, Snapchat or Facebook. But these are anomalies.

The bigger your footprint becomes, the more formal you need to be about your messages, and the more you need to keep repeating them, accurately.

So, I’m starting to write this long awaited book that I’ve signed-up for at FG Press, a few months ago.

This book is going to help startups quickly assess and develop unique positioning that transcends the very essence of their brand, and that evolves out of an effective messaging strategy.

A common mistake that startups make is they forget to reach their prospects. Instead, they cozy up to their customers and users, and stay there, because it’s more comfortable. But Positioning is not aimed at your customers. It is aimed at your prospects, i.e. the market you want to reach and the minds you want to penetrate. How you reach them is a concerted effort, because you can’t just rely on virality and referrals.

Done well, a brand will tilt demand towards your products and give you an unfair advantage.

Branding is not about the color of your logo or the font you adopt. That’s called visual identity, and it is part of implementing your branding, but only one element of it.

Branding is not just what the market knows about you, but more importantly, it’s about the experience they are left with, when they use your product or are thinking about it. That doesn’t happen overnight, nor on its own.

In this book, some of the questions that will be answered include:

What is positioning? Does the market define a position for you, or do you play a role in shaping that position? How do you orchestrate the positioning and messaging delivery internally and externally? What role does your product have in your market position, at each phase of your evolution? What is the relationship between positioning, messaging and branding? How do you implement consistent messaging via content marketing, your website, media, influencers, and anything that touches the market? When do you seriously need to think about positioning? How do you link positioning to your go-to-market approach? How can your positioning help place a premium on your value (and valuation)? How do you turn your brand into a competitive advantage?

I will draw upon my life long work experience at large and small companies. I will subtract what’s not relevant anymore, and will add what’s new and applicable today for the world of tech startups.

Hewlett-Packard and Cognizant were the source of my classical schooling in marketing, but those years were augmented by several more recent years of startup experience, and the whole thing is complemented by researching, observing, interacting with, advising or mentoring a couple of hundred startups in the past year and half. The uniqueness I bring is how I’ve combined traditional principles of messaging, positioning and branding by known visionaries such as Jack TroutAl Ries and Scott Bedbury, and applied it to the world of startups.

Startups don’t have to re-invent everything, but past learnings are here for them. Those that mix it up with their current experiences will get ahead of others.

So, here’s the book structure I have in mind. Your feedback can help to shape this content.

BOOK STRUCTURE

Messaging

  1. The Hierarchy of Messages
  2. Honing Your Value Proposition
  3. ​Segmenting your stakeholders
  4. Developing a Messaging Matrix
  5. Implementing Messaging

Positioning

  1. The Mind is the Battleground
  2. 8 Principles for Positioning
  3. Common Mistakes
  4. Re-visiting Marketing Warfare
  5. Go-to-Market Linkage

Branding

  1. Easy Brand Building Steps for Startups
  2. Your Competitive Context
  3. Your Brand Attributes
  4. Implementing the Brand
  5. Living the Brand

+ Tools, Templates and Samples

Why You Don’t Need To Worry About Branding Until After Product

At what point does a startup need to seriously work on their branding?

The short answer is: after product-market fit, and after acquiring a large number of customers.

So let’s talk about Branding.

Branding is bigger than your product. It’s part of the love affair that your customers, prospects and the market in general, will have with you. It’s what you stand for, the emotions you evoke inside your customers’ hearts, what they will remember from experiencing your product, and it’s also what you stand for in terms of values and causes you may associate with.

Brand power, done well, has infinite value, and it keeps growing almost forever. Whereas market share has a finite limit, mind share doesn’t. The mind welcomes great ideas, makes room for them, and likes to keep them forever as long they bring good feelings, or offer a real benefit.

As a startup, if you begin to worry prematurely about your brand, you are really wasting time.

Airbnb didn’t start working on their brand strategy until their Series B raise of $112 million in 2011. Starbucks only started working on their brand when they already had about 200 stores, and only two of them were in New York.

Startups need to worry first about getting users to use their product. And from a marketing perspective, they need to worry about Messaging and Positioning.

The trilogy of marketing in post product development for startups is: Messaging, Positioning, Branding, in that order. I’ve already written at length on these two topics in The Only 5 Types of Messaging You Need, and Positioning: The Battle for Your Startup.

Messaging must be clear, precise, and targeted. You must speak to your audience and name them inside your message, i.e. for whom you are solving the problem, and then explain the value of your product, service or solution. Don’t delay your Messaging even if your product-market fit isn’t nailed yet. Rather, evolve it every step of the way, as you evolve your product-market fit. Without clarity, you will stumble. Your customers and prospective users will be confused, and they will go somewhere else. Clarity and brevity are necessary attributes to your messaging.

Positioning is everything you say to enter the mind of your prospect. Positioning is not what you do to your product. It is what you do to the mind of people. It’s the position you occupy in it. Positioning is about how you can draw a distinction between you and the competition.

All startups start with low brand recognition, and they grow it initially via increased usage of their product, but there comes a point in time when they have to start putting more wood behind the product usage arrow.

Here’s why Branding needs to be done after you’ve had a lot of traction in the market.

It’s because the initial step in the branding process is to do what is called a “brand assessment”. It consists of asking your customers, prospects and employees some questions in order to get an accurate qualitative picture of what they are thinking. It also includes an assessment of the competitive communications landscape to understand what your competitors are saying. So, you need to have some market footprint in order to extract meaningful data, or your data will not be meaningful enough for your interpretations.

Here are some additional elements of Branding “work”:

  • Brand attributes and strengths
  • Brand visual identity and design
  • Brand communications and propagation
  • Living the brand internally and via touch points alignment

Not taking branding seriously when you have reached a large number of users is a serious sin. My rule of thumb for thresholds are $10 Million if you’re in B2B, and 10 Million users if you’re in B2C, after which you must start official corporate wide brand building efforts. And if your current marketing department doesn’t have the chops to do this, then you’ll need to get outside help for it.

Every company has brand strengths and a brand story. It is your job to find them, harness them, live them, communicate them, and exploit them to your advantage. A great product might get you a few million customers or dollars, but a great brand will let you grow forever even beyond that.

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