“I don’t have the time or the money for marketing, I need to focus on running my business.” This is probably one of the most common complaints about marketing in the startup and small and medium enterprise (SME) world. Although different in their concepts and context, these two worlds face similar challenges, from finding the right people to execute a professional marketing strategy, to an almost daily need to respond to fierce competition. The list goes on, but all roads lead to Rome, or more specifically, all challenges start due to lack of money and/or time.
«The growth engine of the business»
Too many times these daily struggles and limitations turn marketing into a nice to have rather than the must-have it deserves to be as the growth engine of the business.
Even then, with limited budgets and time, these smaller businesses need to make some tough decisions on where to focus their marketing efforts, because now more than ever, there are almost unlimited ways to promote their business. There’s offline marketing, with local advertising, branding, events, press releases, and trade shows as just a few examples. And then there is digital marketing with SEO (search engine optimization), social media posts and monitoring, influencers, email, PPC (pay per click), and more.
With so many choices and limited resources, as a startup or SME, promoting your business without a marketing strategy isn’t a viable option, you’re just betting on luck. It’s like playing roulette in the casino by spreading your chips across the table. You’re diversifying your options and associated risk by allocating fractions of your budget to different channels or targeting different types of personas, but in the end, you are not as confident as you would like to be that you are delivering the right message, to the right people, at the right time and place.
Advertising without a marketing strategy can be a costly lesson. So, while it’s good to have alternatives, it’s crucial to fine-tune your approach to determine what’s best specifically for your brand.
Marketing is crucial
Logistics and operations are essential, but if the goal is sustainable growth and to stay relevant to your customer, then brand positioning marketing is the first step. Start by defining what business you are really in, what are you really selling to your customer.
Let’s have a look at the example of the travel accommodation market. All those companies are in the business of selling a place to stay right?
So how did a startup like Airbnb become one of the biggest recent business success stories in the world? They started by accommodating a need for extra income for homeowners and a uniquely localized experience for travelers. While others were focused on the functional aspect of the market, Airbnb saw travelers not just as customers but as people who were not satisfied by the homogeneous market of travel accommodation. They started with functional benefits, of course; otherwise, they wouldn’t have been seen as a relevant player in the travel accommodations market. But to differentiate themselves from the rest of the pack, Airbnb integrated a more meaningful and engaging human experience (HX).
So, when asked which business Airbnb is really in, the answer is not the travel accommodation business, but the authentic local experience business. More specifically, they looked for customers who had a discovery and explore mindset. And this is what many tourists look for when planning their vacation.
But how can any company, including SMEs and startups, determine the business they are in, which customer target is the right target, what’s the perfect message, and where and when to promote it?
The answer is understanding humans, comprehending their lifestyle, behavior, needs, motivations, desires, fears, and most of all, their tensions. This is exactly what Airbnb did to identify a huge opportunity. But while big companies have the budget and the time to access Big Data from different database sources and delegate a team to gather real-time information, how can a smaller company like yours with limited resources take a human-centric approach, and identify and meet customer needs both functionally and emotionally without substantially increasing your marketing budget?
The main thing you can do that doesn’t cost one more cent is to stop thinking about what you and your competition are doing and shift your focus to what the customer needs. Don’t rely on how different your product is and how word of mouth generates awareness. Even if you cross the first barrier and get the word out, you still need to build loyalty and make sure that the differentiating benefits of your product and brand offering don’t become meaningless.
The second step is to find alternative ways to gain insights into your customers’ needs (functional and emotional) without paying for costly databases. Usually, these alternatives or simplified versions might be considered incomplete or not as good. However, they have the same potential for SMEs and startups as Big Data has for corporations since the reality and the needs are different. SMEs tend to start local or with hands-on customer understanding because they live and work in close proximity to their customers. Startups usually talk directly to potential customers and aim for an open niche in the market. These two characteristics place you closer to your customer than the big guys and you can use that advantage to acquire data (customer surveys, after-sales support, etc.) and get even closer to understanding customer needs.
Being a small team also offers an advantage in terms of brand benefit analysis since there is no big history or background; you don’t have multiple branches of the company to consult and get buy-in. This makes it much simpler to get a relatively complete and timely understanding of the brand’s value. That knowledge is how you start building your marketing strategy.
Brand Benefits Analysis
To develop an engaging brand experience, identify and list all functional and emotional benefits that can be delivered by your brand to create and sustain customer value. This will allow you to identify what are the must-have features to compete in the market, how you can differentiate from competitors, and if there are any relevant features of your brand that your customers may not know about.
This step in the human-centric methodology can be equally developed in large organizations or SMEs and startups. It is not an incredibly scientific process with validated customer research; it is a very good quick and simple solution that uses the knowledge of the people inside your organization who know the brand and are in close contact with your customers.
First, prepare a question guide that can stimulate some thinking about the brand and how customers perceive it. Then gather all the people in your organization who have an intimate knowledge of your product and your customer and run an internal brand assessment session. As people start writing down the benefits of your product while answering the questions, the next step is to look for patterns and commonalities and align those attributes into bigger benefit areas. Finally, you get to name those bigger benefit areas.
It is important to focus on the core benefits of the brand rather than trying to cover a very wide benefit pattern. Focus on what you do best. Trying to own too many benefits will fragment your brand and make it harder for your customers to understand what you are trying to tell them about why your brand is different, better, and special…to meet their needs.
For SMEs and startups that don’t have the resources to purchase expensive industry reports, it is still possible to get a good understanding of the market and your business potential by resorting to market reports available online for free or by doing some additional desktop research. It might be more time-consuming, but if you stick to reliable sources of information, you can still find valuable insights that can guide your competitive assessment.
It is important to assess your competitors by understanding the market from the customers’ point of view and, as a result, identify defendable positioning on the market and potential communication spaces available. Again, you can often do this more readily than the big company’s brand teams because you interact daily with your customers. Certainly, your sales team does, and these are some of the best marketing people every organization should make better use of.
By analyzing your competitor’s communications, you can get a pretty good feel for their value proposition, what brand benefits they are communicating, in which brand territories they are positioning themselves, and even which type of customer segment they are targeting.
High Impact Customer Targeting
Without the resources to quantitatively identify the segments that can drive the highest business growth for your brand, you will have to do it qualitatively.
There are several criteria you need to take into consideration. The ideal target for your brand will be a segment: 1) that is open/willing to consume your category; 2) whose lifestyle, values, and needs are aligned with your brand personality and benefits; 3) that has a disproportionate influence or aspirational power on the rest of the customers in your category.
After identifying the type of segment that fits these criteria, you can start developing a customer profile to ensure a perfect understanding of the target segment across all relevant stakeholders.
You need to go deeper than demographics to understand their lifestyle, motivations, functional needs, and emotional tension points. Imagine yourself as the customer and think about your daily life. It’s easier than you think. If needed, you can group a couple of people that fit in that segment and do some in-depth interviews or focus groups. Go on some sales calls or simply spend some time in the store watching customers as they buy. Act like a confused customer who can’t decide what brand to buy and hear the response from someone in the process of selecting your brand to buy. These hands-on approaches can give you some clear directions for the development of your brand positioning strategy.
Brand Positioning Strategy
With a clearer understanding of your brand’s benefits and insights into your target customer segment, you can now develop a meaningful, deliverable, and defendable brand positioning strategy to maximize your brand’s potential and establish a strong emotional connection with your customers.
This is a vital step that most SMEs and startups either disregard or don’t go into deep enough. If you ask them what their brand positioning is, most will reply with a nice sentence related to the brand essence or reason to believe without anything to substantiate it. Try to build it from the customers’ perspective and develop a structured brand architecture.
The Motivational Hierarchy of a Brand
At Garrison Group, we use the Customer Motivational Hierarchy model.
This brand architecture methodology is built on three pillars based on the target’s need states and tensions points and divided into three levels: cost of entry benefits to be included in the customer consideration set, differentiating benefits, and the crucial emotional experience that is the cumulative result of delivering on all three of your brand pillars.
The main advantage of a Customer Motivational Hierarchy model is that it aligns the functional and emotional benefits of the brand based on how motivating those benefits are in driving actual purchase behavior and brand preference.
First, you need to establish your customer target needs when they decide to consume your category. This will determine the cost of entry benefits. The cost of entry level establishes the benefits required to be a part of the competitive set; it relates to a specific category need of your targeted customer.
Now, look at your tension point for your customer that specifically relates to how and why that need is particularly important to them. That tension point will propel your brand differentiation benefit to something more powerful and unique and yet connected to the basic need. Your point of differentiation for each brand pillar should help to release that emotional tension point within the customer. That’s how you create brand preference.
By coordinating those inter-related brand pillars with their need states and tension points into a crucial experience you will be able to create a powerful emotionally engaging brand experience.
Having a detailed description of the target and a more customer-oriented brand architecture is what you and your marketing/sales team need to create more effective communications.
At this point, you know how to deliver the right message to the right people and that you need to do it at the right time and place when they are open to receiving information about the category and your brand. Engage them when they want to be engaged rather than interrupting them and turning them off.
Developing a human-centric customer journey helps you identify the best touchpoints of when and where your potential customers are most receptive to your message. In this way, you will ensure that for every dollar spent, you are maximizing your ROI – the right message to the right target at the right time and place.
Whether you are doing all communications internally or with an agency, once you finalize the strategy it’s very important to ensure it’s understood across all relevant stakeholders. Developing clear briefings and/or workshops on the segment description and insights, and brand strategy will maximize the impact, strengthen the brand equity, and ensure a great execution of the marketing strategy.
Keep marketing on the front line
SMEs and startup owners are masters when it comes to feeling time and financial resources pressure. But marketing can’t be seen as an extra or a nice-to-have luxury that big corporations are lucky enough to have the money and the time to prioritize. Leverage your proximity to your customer and develop some tools that are easy to implement, like the ones we’ve described.
It’s time to make marketing a priority. You can develop a marketing strategy and set up goals without increasing your budget substantially. Just keep marketing on the front line, define a budget for it, and stick to it. Marketing will not only tell people that the brand exists, but it will also drive brand preference and purchase intent before and during their purchasing process. It will encourage customer loyalty after the sale to buy again and encourage others to do so as well.
Rui Santos and João Pedro Pina are both Marketing Analysts at Garrison Group’s offices in Milan, Italy.