Lean Marketing for Your Startup
By Hayut Yogev, CEO of Gaia, a venture strategy marketing firm | 30.10.2016
Customer-oriented marketing allows you to grow revenues with fewer marketing resources and far greater results
It’s high time to debunk one of the greatest myths in marketing of startups. In a conversation with the marketing manager of a startup that develops and sells enterprise software, she informed me of one of the most commonly heard, yet false, axioms regarding marketing. “You need to spend big on marketing if you want to bring in the big bucks.”
Wrong.
The truth about marketing budgets
Unfortunately, as many companies can attest from experience, you can spend a fortune on marketing without achieving the breakthrough that will generate revenues. However, highly focused marketing, also known as lean marketing, is what generates the most revenues in the quickest and most effective manner.
The concept of the lean company was developed by Eric Ries in his book, The Lean Startup, which was published in 2011 and became a bestseller in the US. The book is based on the insights Reis gained as an employee of startups that failed because they did not understand the wants and needs of their target customers and because the focused too much time and energy on the launch of the product they believed in. The mistake, as Reis astutely analyzed, is stated succinctly in the following sentence, “It was working forward from the technology, instead of working backward from the business results you’re trying to achieve.”
Marketing, as I define it, means seeing things from the customer’s perspective. Since the money we want is in the customer’s pocket, if we want to get the customer to use and/or pay for the product, we need to understand which customers are the best fit for our product, how to define the product from their perspective, how to properly define the market and the category to which the product belongs and recognize the greatest value that will motivate the customer to use and purchase it. Those are the basic definitions around which marketing activity should be built.
Marketing based on the four answers to these dilemmas is the leanest, as it is focused on the customers with the greatest potential for our product and on the relevant messages that will motivate them to buy it.
In the Internet era, social networks allow marketers to leverage Internet connections to reach anybody at any time. And it because of this revolution in technology that customers have gotten used to searching for and adopting new habits and products. This is precisely why lean marketing is the most effective and best fit for all startups just getting started.
The use of lean and focused marketing will not only allow you to save a great deal of money, but it is also the marketing with the greatest chance of introducing a new product and creating the quickest breakthrough to the international market.
What are the four principles and stages at the heart of lean marketing?
- Proper and quick mapping of the market and defining the answers to the four basic dilemmas: What is the product from the customer’s perspective? What is the definition of the market/category in which you should be playing (and leading)? Who are the primary and secondary customers for the product? And what is the value that will motivate them to use it?
- Defining the company’s goals and objectives for the short term: Define goals and objectives for the launch period and/or for the next six months.
- Building a marketing plan of action: Based on the basic definitions to achieve the company’s objectives. The plan is, in fact, a matrix of target audiences and of the most effective activity.
- Regular monitoring and measurement: Checking success of each activity against the targets set for it.
Timocco, an Israeli startup that develops and markets interactive games for children with special needs, is an excellent example of the success that can be achieved through lean marketing. After two years of spending money on marketing and sales efforts that did not deliver the expected results, the company underwent a brief process to remap the market and defined its basic assumptions. It then used them to prepare a marketing and sales plan. First of all, Timocco defined the initial target countries by mapping the market and considering the resources and tools at its disposal. The next step was deciding on the type of distributors that were right for the products. It then created a plan of action for each target audience based on the basic definition of three target audiences: therapy institutions, therapists and parents.
Over 90% of the plan of action is based on Internet activity:
- On relevant forums, bloggers and social media groups
- Managing a professional community
- Quarterly newsletter oriented specifically to each target audience
- Managing a diverse and active blog. Writing relevant content for each of the target audiences.
- Internet-based public relations and maximizing the effort through social media
- Sending mailers and conducting webinars for the professional communities
The other 10% is dedicated to professional conferences in the two countries selected and, of course, Israel, Timocco’s home market.
This plan of action, a large portion of which is based on free advertising and activity, allows the company to achieve its objectives in less time than expected and, most importantly, positions Timocco as a market leader in its field.
The precise definition of the target audiences and tailoring a marketing plan for each separately makes it possible for startups to reach their customers quickly, receive feedback about the product in real time and generate use and very significant revenues in a short time – all while slashing time to market. This is the winning formula for lean marketing that leads to a breakthrough.
