It’s time to start marketing. Where do you get started? Ask yourself, the following questions:
1. What is the company goal?
2. How will the marketing team set objectives to support that goal?
3. Which marketing strategies will best drive those objectives forward?
4. What tactics should we execute for that strategy?
Ideally, the company has one primary company goal. For each relevant goal, you’ll want one to a few objectives. For each objectives, one to a few strategies. For each strategy, one to a few tactics.
Here’s an example of what the startup marketing plan might look like:
With this template, yo do the following. State a) the company goal, b) the marketing department objectives, c) the strategies each team in the department may support and d) the tactics the individual contributors will execute upon.
Your final framework might be a more detailed version of something like this:
This is called a GOST framework, standing for Goals, Objectives, Strategies and Tactics. Whether you don’t know where to get started, need a way to manage up, or wish to create clarity for your team, the GOST framework is a great way frame your plan.
To scale startup marketing, you’ll need to set a marketing budget, invest those dollars and report on results. You’ll wonder how much to spend, which channels to invest in and how to measure performance.
As you scale, the next level marketing budget challenges you’ll face may be how to:
Hit user acquisition targets while also justifying spend that doesn’t work yet
Unlock new channels as your most profitable channels hit a ceiling
Grow when marginal spend isn’t profitable, but blended LTV:CAC is good
Measure attribution without the expertise or bandwidth to perfect your data
Win the market when a competitor is outspending you
Here are guidelines to frame your thinking around marketing budget decisions as you scale.
Marketing Budget Framework From ScaleYourStartup.com
Define your spend by working media, non-working media and payroll
Divide your marketing budget into a) working media, b) non-working media and c) payroll.
Working media is money you spend on advertising. Non-working media is money you spend on non-advertising activities (e.g. software, SWAG, etc). Payroll is the fixed cost of your marketing team.
Working media is more variable and more scalable. You need to count this against your customer acquisition costs. Breaking out non-working media helps you isolate other investments on your CAC. Ad spend can be scaled up or down without the other budgets. Including operating expenses in your CAC calculation skews thing wrong way.
Bucket your working media into performance, test and brand spend
Within your working media, bucket your spend into performance, test and brand marketing. The performance bucket should include the majority of your spend. This includes the highest spend channels and those that work. The test bucket should include channels where you are still experimenting. These are channels where you are not spending quite as much and the spend isn’t ROI positive quite yet. The brand marketing budget may be harder to measure at startup scale.
When you report on CAC you may look at it a few ways. Performance only, all working media, fully-burdened including ALL marketing expenses. Depending on your audience, you may want to share different numbers.
Invest into ROI positive channels, but test new channels too
If you only invest in profitable channels, you risk hitting a ceiling. How do you invest resources against channels that aren’t quite working yet? Set a thesis, understand why you think the spend will work and why it isn’t yet, and begin testing.
Have you not optimized acquisition on this media source yet? Is your funnel still broken but you need the traffic to test improvements? Do you expect CACs will never be lower and your LTVs may rise over time? Do you have a marketplace business where demand also helps grow supply? Are you in a race for marketshare against a competitor?
If you have a valid thesis, set some parameters around how much or until when you’ll spend. If you don’t, kill the spend and use the cash for something else.
Level of brand investment depends on how important brand is to winning
If you are a performance marketer, you may shy away from brand spend. Push yourself to consider where this investment may help.
If you are a brand marketer, you may spend too much here and should cut back. Push yourself to measure ROI.
Investing in brand enables you to build awareness. Over time, this should improve organic acquisition costs, lifetime value and referrals. Some startups generate viral growth with minimal performance marketing spend. Other startups are in competitive spaces and brand is the primary differentiator. For most tech startups, brand is about the product experience. There are many good reasons to invest in brand. Know why you are doing it and pick a number that feels right for you.
Stack rank your marketing channels; focus marginal ROI not blended
When allocating budget, you should stack rank your channels based on LTV, CAC, payback and volume. Any channel that hits your LTV:CAC and payback targets, you should spend on. The one exception may be if the opportunity cost of your time isn’t worth the incremental volume.
Marginal returns may go down, but if organic is high enough on a blended basis your ROI thresholds may look okay. In a cash constrained environment, if marginal spend isn’t ROI positive you may want to pull back. In some cases your paid spend lifts your organic acquisition, and as such you can continue to spend.
Attribution won’t be perfect; keep it simple and layer in complexity later
Attribution is science, but there is some art too.
You may start off with one or two data sources. Google Analytics, promo codes, or a post-purchase survey are all a good place to start. You can then build a model and triangulate the data points you can capture.
Llast touch attribution will tend to favor demand capture channels such as SEM and SEO. First touch or a mixed model will tell a better story around awareness channels. A short attribution window forces you to optimize the bottom of the funnel. A longer window may enable you to go up funnel. It is a judgement call with tradeoffs. Make the best guess you can, run with it. Evolve the model as your spend scales and the tradeoffs become more material.
When the competition is outspending you, pick a niche to win
There are a few rules of thumb for thinking about this.
In a winner take all market, you may need to raise money and spend more to fuel your growth engine. If you don’t spend, you lose. If you do spend, you might lose.
In a market with room for more than one player, then you should consider what game you want to play. Can you:
focus on one geography, vertical or other area you can dominate with less cash?
tell a story about the health of your business?
position yourself as an attractive number two for someone to acquire?
Startups will often spread themselves too thin. With less cash, pick a niche where you can be #1 at, run the business well, and have some patience.
In summary
There are no “right” answers. There are rules of thumb, and the best companies usually break them and create their own rulebook.
If you are scaling into new geographies, I wrote this for you.
When managing a startup across multiple geographies, you may wonder how to best:
Align on vision
Allocate resources
Communicate progress
At SpotHero, a consumer marketplace for parking, we had this problem. We first launched in Chicago. We knew we had to expand to new cities, but the odds were against us.
Several competitors were already national. They had been around longer. They had launched in new cities first. They had raised more money. Not to mention several other existential threats we faced. Many folks thought we were doomed before we ever got started.
But, we prevailed.
To solve out geographic scaling objectives, we built a plan. We called our plan the “National Domination Plan.”
The National Domination Plan was one slide. Its power was in its simplicity.
The National Domination Plan had a few key elements:
Tier of Market
Goal by Tier
Geographies by Tier
Defining KPIs
Resource commitments by team (e.g. Sales Staffing, Marketing Budget)
Specific strategies or tactics for each tier of market
The National Domination Plan can look something like this:
Having a National Domination Plan is important for a few reason:
Allows you to both operate new markets and others at scale.
Reminder that your goals may differ by stage (e.g. “soft launch” vs “scale”)
Enables you to set expectations for KPIs to balance new vs existing markets
Specifies on resource commitments by team to minimize bottlenecks
Clarifies to everyone what you will and won’t do.
Communicates why some markets are performing better than others
Here’s what it might look like as you start to fill it out:
Using the National Domination Plan, a voice over might sounds something like this:
“We tier our markets from 1 to 4, each with a unique goal. For Tier 2 markets, our goal is to optimize from a launch market where we test to a market with profitable unit economics. Texas is the main geo in Tier 2. We’re improving LTV/CAC from <1 to the 1 to 2 range. In order to get there, we need sales to hire an account manager to optimize our existing merchant relationships. We will also double advertising. We’ll do this by launching our search engine marketing ads on Google. Once we hit an LTV/CAC of 2, we’ll move Texas to a Tier 3 market to focus on scaling volume with more sales and marketing resources.”
A few years after implementing our National Domination Plan framework, we:
Scaled to 300+ cities
Emerged as the market leader
Acquired multiple competing companies
Gained the biggest marketshare across every city
Earned recognition as one of the biggest consumer marketplaces in North America
The plan worked. This framework can be applied to almost any business trying to scale by region. If you are running that type of business, you are welcome to repurpose my National Domination Plan for your own startup. Would just love to hear from you if you do!
To grow customer acquisition, you can chose one of a few lanes — performance marketing, virality, or content marketing. In theory, content marketing is easy.
You pick an audience. You create content that is relevant. The content must entertains, educates or inform. You then distribute the content on the right medium at the right cadence with the right call-to-action. That’s about it.
The challenge, of course, is that A+ content marketing is an order of magnitude more impactful that B+ content marketing. If you are going to do pick this path, you have to get it right. Really right.
So, the question is where do you get started?
Define your audience
Define their customer journey ( From I didn’t know I had a problem all the way through to loving your product and referring their friends)
Build a content marketing matrix
This post is about how to build a content marketing matrix. The content market matrix is the framework for your team to create impactful content for your audience.
To get started, you map out the stages of the customer journey across the columns. Across the rows, you list each persona you target and/or the different products and services you offer. Across the bottom, you list the call-to-action. Then, in the cells, you define the content you want to create for each stage of the journey for a given target buyer or product offering.
Content Marketing Matrix
Your content marketing matrix should look something like this:
To use the Content Marketing Matrix, simply:
Define each persona, product or service (rows)
Set each stage of the funnel or buyer journey (columns)
State where to find your audience across each stage of the journey (medium).
Decide what the next step you want them to take is (call-to-action).
From there, simply create the best piece of content on the internet. Maybe it is the first guide, the most comprehensive or more entertaining. Make it about them, not you. Publish it in the right spot, promote it to the right people. Don’t ask people to buy, just ask people to take the next step. Rinse and repeat.
Acquiring app downloads is much harder than acquiring web traffic. The main reason is because mobile acquisition channels aren’t as mature as web acquisition channels.
One day paid advertising within app marketplaces will exist and Mobile Install Ads will be available across more platforms, but we’re just not there yet. In the meantime, one of the best ways to drive app downloads in by appearing on TV. Here’s two case studies of how to get more app downloads by appearing on TV.
Last week, I was interviewed for a 3-minute segment on NBC Chicago.
You can watch the segment here:
As a result of the segment, we saw a big spike in app downloads. Below is a graph of daily iPhone App downloads by day, and you can see the spike the day we were on NBC Chicago.
Not surprisingly, a national segment can make an even bigger impact. Here’s a segment with ABC World News that featured us in December.
As a result of the national segment, two amazing things happened.
First, we got a ton of app downloads. Here’s the chart of iTunes downloads, and there were a ton more for Android.
Second, as a result of the surge in app downloads, CBInsights wrote a piece featuring us as one of the Hottest Apps in the iTunes App Store. This piece drove a second small bump in app downloads the day it was published.
Of course, one might ask if PR is scalable. While media hits don’t happen daily and don’t compound, as an app gets more downloads and more positive ratings it tends to rank better in app stores. Here’s an example of how our app store ranking is consistently improving, in large part thanks to big press mentions.
All over the web you can read about app store optimization, mobile install ads and more, but TV is honestly one of the most effective and cost efficient way to drive awareness and app downloads for non-gaming consumer focused apps.
