While many startup founders suffer from the "If I build it, they will come" delusion, the majority of small business owners know that marketing is key to building a strong business.
Planning for your great new idea to go viral and spoil you with riches is not a plan at all. Instead, you need a well thought out, diversified and well-funded marketing plan to get the attention of your current and future customers. Here are four things to consider:
First, your sales projections, marketing plan and budget need to be intimately intertwined. You likely won't achieve sales growth without the proper marketing. And proper marketing usually depends on strong sales results in order to have the cash flow to market effectively. It sounds like a chicken and egg scenario, but it's not. Marketing comes first.
As any startup can tell you, getting the word out about your business has to come before sales. So assuming you have a sales target in mind, work backwards from that number and challenge yourself and your team to define what the 'must do' marketing activities will be for the year.
Second, your marketing activities need to be diversified. No single activity will guarantee results. Conversely, too much diversification will dilute your message within any particular channel. Depending on the industry, I usually look for a combination of public relations and communications, website development, social media, trade shows and conferences and print advertising and direct mail.
As you execute your marketing plan, you will need to be ready to drop initiatives that aren't working, in favour of others. All the while, you need to understand that piling all your efforts into PR, for example, because it got you some easy and early wins, will eventually backfire on you. The most successful brands don't only market in one way to one audience, they diversify.
Third, whatever you do, do it well. I'd rather see a business do less volume of high quality marketing than a slew of shabby pieces or events that get a lot of exposure but say little about your commitment to excellence. That means that you need a fantastic logo, website, photography, trade show booth, business card, blog, press release, etc. – not just a low quality piece that gets something out to the audience for the sake of it.
Last, let's talk about budget. I get asked all the time what a business' budget should be. Everyone wants a formula they can plug into their projection spreadsheets. I can't support that. You don't start with a marketing dollar amount and work you plan backwards. Instead, you need to craft your marketing plan and see what the cost of those initiatives are. Whatever that number is, that's what you need to spend. You need to finance your plan, not build a plan around your finances.
In one startup I was involved in, we spent 25 per cent of gross sales on marketing in the first year. Needless to say we lost money that year, but we presented ourselves to the market with a product and a brand that was every bit as professional as our 50-year-old competitors.
We marketed ourselves as the company we planned to be, not the company we were at the moment. That's the key. You are marketing the future of your business, and it must leave an impression about the quality of your products and services, as well as the quality of your brand and company vision.
So for those owners with a December year end, now is a perfect time to realign your marketing plan with these tips and philosophies. In the absence of a marketing plan, you'll spend another year flying by the seat of your pants – and that won't let you learn much about what's working and what's not.
Chris Griffiths is the Toronto-based director of fine tune consulting, a boutique management consulting practice. Over the past 20 years, he has started or acquired and exited seven businesses.