New-to-the-world: strategic marketing for startups and small business Mike | April 26th, 2010
strategy |?strat?j?|noun: a plan of action or policy designed to achieve a major or overall aim.
Many Internet startups reside in new market segments that are still evolving and have yet to be fully defined. In our case “crowdsourced creative services” is a new category in an old (and very large) market. It could be defined as a “alternative method for sourcing creative services, in which the buyer accesses an online community of providers and requests that community to collectively perform the service.” Our business model, and others that are popping up every day, is still so young that the milk in my refrigerator is nearly as old. A challenge faced by many of these businesses is to find a way to introduce to the market, and to their potential customers, a new-to-the-world product, service, or category.
Creating competitive advantage in an established category typically involves understanding what the customer wants and giving it to them. But, new categories and new products require an approach that differs in a significant way: instead of giving the customer “what they want,” the approach must be focused on educating the customer, and helping them to “learn” what they want. This is a dynamic approach and one that recognizes the evolution of a customer’s knowledge of a product or service over time. This represents a great challenge for startup marketers: how to build awareness of the new product, teach customers ways in which they can use the new product, and associate this knowledge with their brand. In their article “Market-Driving Strategies: Toward a New Concept of Competitive Advantage,” Gregory S. Carpenter, Rashi Glazer, and Kent Nakamoto explore this dynamic and powerful approach and suggest that businesses can greatly influence what customers “want” by helping customers to learn.
We have been thinking a great deal recently about our own strategic approach to marketing and how this relates to other startups and small business. We recently completed our first survey of many of our buyers and are gleaning some valuable insights about our own position in the market for creative services, and how we can leverage these insights going forward. Our approach is to apply these insights to a goals/strategy/tactics framework: set our marketing goals, determine the strategy to achieve those goals, and develop tactics consistent with executing the strategy. For instance, we confirmed through the survey that the vast majority of our buyers are very small companies, with under 10 employees. On a very simplistic level, our GOAL is to get these small businesses to visit the site and post their projects; our STRATEGY might be to make them aware of crowdSPRING, and teach them how an alternative way of sourcing their creative services can provide them great value; and our TACTICS might include search or display advertising, public relations, and social media outreach.
Goals can be quantitative (drive x visitors to the site over y period of time) or they can be qualitative (build a community of entrepreneur-customers), but they must be clearly defined and they must, at least in part, be measurable. How can a marketer measure progress against a stated goal unless they have some yardstick to use for comparison, whether that is indeed the number of visitors or the level of customer engagement as determined by repeat visits or content generated and uploaded.
Strategy is a little harder to nail down. A marketer can take a general approach (drive traffic, close sales, increase margins) or can be very specific (build awareness through mass media to educate small businesses about our category and service). Two different marketers might approach the strategy (and the strategic statement) very differently, but again this should always serve the ultimate master: your goals.
Tactics can and must serve the strategy that is defined, whether general or specific. This is where the marketer gets to the mostporno detailed level of the campaign and where resources are allocated based on the overall goals. Many small businesses are limited tactically due to modest resources, but this should not be taken to mean that there are not tactics which can be executed with minimal economic investment. Public relations campaigns, word-of-mouth and viral marketing, social media campaigns are examples of tactics which many small businesses execute on a limited budget.