What Startups Should Know About Leveraging Data to Begin Digital Marketing, Part 2
This is the second installment of a session that Adam Roe, of Atlanta-based digital agency FortyFour, presented to a group of entrepreneurs at the B2C hub Switchyards Downtown Club — actionable online marketing ideas and insights which any startup can apply . In the first installment, Adam addressed a key component of marketing our startup — building the best possible product. Here, he discusses choosing an initial marketing strategy, setting up initial Key Performance Indicators (KPIs), and understanding and measuring Viral Coefficient.
So how do we get our product or service in front of consumers in the first place? Realize that marketing is a key startup activity alongside design, development, customer validation, and fundraising.
Wait. This is important — and one of the most overlooked parts of launching a new B2C product or company. Let me repeat it:
Marketing is a key startup activity alongside design, development, customer validation, and fundraising. Budget for it. Plan on it. Figure out who can help you with it. And don’t just market your product or company. Consider taking it one step further: build marketing “into” your product and eCommerce experience. For example: What connections, incentives, and recommendations can you offer?
And what strategy should you pursue? In an often-overlooked step of the MVP process, Adam suggested we begin evaluating our marketing approach as early as possible.
Which strategy may work best for our new product or service? (See Figure 1) Consider a range of options, from going Direct to Consumer, selling Business to Business, going Retail, leveraging Multi-Level Marketing, and engaging or partnering in Cause Marketing, to engaging or creating Content Marketing. As a startup, you rarely can go head-to-head with established providers in a given space, so rethinking or adopting one of these strategies may help get your product or service in the hands of new customers — allowing you to outflank established providers. To emphasize this point, Adam noted that if you search for “Market Strategy” in Google, you’ll find over 550 strategies! Whether it’s the 3Cs, the 4Ps, (Google those as well) or a mix, start integrating a strategy into your product and business early. After all, marketing is one of the key differentiators between B2B and B2C business.
DIG INTO AND UNDERSTAND KPIs
Another undervalued activity in a startup is spending time determining KPIs (Key Performance Indicators.) Adam noted the importance of knowing, or learning, what you expect to be your KPIs. Not what results you expect, but what indicators you believe will help you and your investors evaluate the strength of your business: measurable indicators of success…or not.
Investors and partners look for people who understand the drivers of their business. Key to this is an understanding of the multiple touchpoints potential and actual customers have with our products and services — and what the expected next step is for each touchpoint. Adam emphasized “understanding touch-points and their next steps,” noting how much this can help us better dissect what is keeping us from improved, or ongoing, customer engagement and loyalty.
This doesn’t just apply to marketing; consider a range from customer challenges to operational problems when dissecting issues. Figure 2 gives a sense of the channel and opportunities we have to establish KPIs and begin testing performance.
VIRAL COEFFICIENT
One area of performance that Adam introduced the group to is Viral Coefficient. It’s a good KPI for measuring consumer audience growth in early stages. Essentially, for every new customer we attract, they bring one or more with them (See Figure 3).
If K is our growth measure, then a K value greater than 1 means our audience will sustain its own growth. Less than 1 means we need marketing help, conversion help, or are in danger of a stagnant or declining audience. But, as Adam further noted, achieving a value of 1 is harder than it looks. In other words, worth of mouth is still the most effective form of communication, but it means we need people to not only talk about our product or service, we also need them to engage others — to share, recommend, and advocate — and we need to have a satisfying experience waiting for them when they arrive.
In Part 3, Adam addresses starting with low-cost marketing channels like SEO and Search. Everyone talks about them, but how do you get started? Look for Part 3 this coming Friday.
// Special thanks to Aly Merrit for her ninja editing and Adam Roe
