Let’s start off with a definition: what does marketing strategy mean to us? The internet is full of different and conflicting definitions so this can be a confusing question. The first thing I see from Google when I search “marketing strategy definition” is “a plan of action designed to promote and sell a product or service”, which probably isn’t quite right as we’d argue that a plan is more tactical and short-term than your marketing strategy should be. A marketing strategy should encompass so much more than that, from information about an organisation’s current situation and the competitive landscape through to its short, medium and long term goals and a vision for how it might achieve and sustain them.
We’re currently seeing a huge boom in startups cropping up left, right and centre, particularly in the Fintech sector. Starting a new business is more accessible than ever (so far, setup costs for Freshbat have sat well below the £500 mark). We’re also seeing more employees with an appetite for job opportunities that offer greater flexibility and the chance to make an impact than they would typically find working for a larger, corporate entity.
The fast-moving and ever-changing nature of startups is extremely exciting, but also poses huge challenges for those companies. One of the greatest challenges is, of course: cash-flow. However, another top concern for small businesses is competition in the market, with over half citing this as an obstacle to success in 2017. At the end of last year, the Fintech Times revealed that almost half of tech startups that planned to raise funding in their first 12 months failed to do so. And London has the lowest rate of startup survival in the UK, with only 50.1% of businesses formed in 2013 surviving past the three-year point.
So, whilst a startup venture can be incredibly exciting, the odds aren’t exactly in your favour judging by current reports. And when you’re starting out, ‘marketing’ may seem like one of those elusive, impenetrable functions that you have neither the time nor inclination to entertain at this early stage in your journey as a business owner. However, creating a solid marketing strategy is a core part of laying the foundations for your small business and can help mitigate the two critical risks of both cashflow and competition.
How a marketing strategy can help cash flow
Marketing can encompass a wide range of activities and one function it’s typically closely linked to is sales. Even if startups are investing in sales rather than marketing, there will inevitably be blurred lines between activities that are traditionally ‘sales’ and those that are traditionally ‘marketing’. Essentially, any activity you’re doing to take a either your product or service to market is marketing. And one thing we can guarantee is that it always takes a certain level of investment to generate interest in your product or service. So it pays to have a comprehensive strategy in place.
Your marketing strategy should work alongside your business/financial plan to give you an overview of not only what promotional activities you can manage in the here and now to achieve your business objectives, but also to give you an indication of what might be possible in the medium to long term. For example, let’s look at trends during a typical annual cycle. You might have a general upwards trajectory in terms of income and cash flow, but there may be dips during periods of less demand; perhaps there’s usually a dip in sales of your product just before payday each month, or maybe you have to monitor your cash flow more closely during the Christmas and New Year period when businesses aren’t using your services. By using your marketing strategy to build up the bigger picture, you can take a step back from the fine detail and plan your sales/marketing activity accordingly so you don’t find yourself overstretched and unable to pay the bills.
How a marketing strategy can improve your competitive advantage
At this point, we’d like to emphasise the importance of not making assumptions about the market you’re operating in or looking to break into. People in startups and larger organisations alike are often prone to making assumptions and basing activity on those assumptions, whether correct or not. If you’ve made a correct assumption, then lucky you. If not, it could mean you’re never able to fully cater to the needs of your audience/consumers, and in the worst-case scenario, your business could fail. A critical part of creating a strong marketing strategy is taking the time to gather data and market insight on both the external environment, including your competitors. Doing this will help you in a number of ways:
- By understanding the current external landscape for your product/service, you should gain more insight into what customers need, what they want and how they actually behave. It can be very dangerous to make assumptions on what your audience want, especially when it comes to generational differences. For example, there are vast differences in the way over 50s want to find out about products and services compared to the way you might try to attract younger consumers who fall within Generation Z.
- You can find out what customer demand is for your specific product or service and tailor your marketing strategy and sales activities accordingly. Is your product exclusively B2C or is there actually an opportunity you hadn’t realised for you to market it to other companies?
- Your marketing strategy should also help sense check if you’re operating in the right market. Are you trying to offer your services in a specific region where the market is already very crowded with competitors or would it be worth your while to try and branch out into a less saturated region?
- Are there any external risks/opportunities further down the road that you either need to mitigate or take advantage of? Examples of significant external risks for businesses in the current climate may include political events such as Brexit, financial aspects such as low interest rates and lenders appetites for risk, or technological advances that your competitors are adopting. Conversely, technology can actually present a huge opportunity too for startups who may have more flexibility to adopt new technologies and thereby start to gain competitive advantage over their larger, corporate counterparts.
- It not only gives you chance to gather this information but should also enable you to reflect on your findings and then develop a strategy based on facts rather than guesswork. This will be invaluable further down the line: maybe it’ll act as a starting point for your next strategy so you can see where you’ve come from and assess the point you’ve reached; you could use it to complement a business plan to show you’ve done your homework when you’re trying to secure additional funding; or maybe you have aspirations to sell your business on and the new owners will have a clear understanding of your business and the journey you’ve been on.
So, whilst we understand that a marketing strategy may not be at the top of your priority list when you have a million and one other things to with your small business, we’d really recommend making room for it. Your marketing strategy should get to the heart of your business and give you a great foundation to build on when it comes to planning your tactical activities that will help you reach your short, medium and long-term objectives.
If you’re keen to start developing a marketing strategy for your business but don’t have time to do it yourself then why not get in touch and see if we can help you out? You can email us at firstname.lastname@example.org and we’ll be happy to have a chat with you about your requirements.