Just kidding. I love you. I really do. You’re creating some of the most innovative products, changing lives, and making the world a better place. I admire you.
Great. No problem! I can help you with that.
So many times I am met with something like “We’re a start-up – we have no marketing budget.”Here is something I would love to go shout from a mountaintop:
“Marketing is NOT free!!!!!!!”
This is a quick and easy formula of how much money you need to allocate to your marketing efforts based on your users goals. (This does not take into account PR efforts)
X = Customer/User Goal
For a million users, you’re looking at a necessary marketing budget that ranges from $50,000 – $5,000,000 (PLUS the cost of execution)
There is a huge misconception that technology start-ups just need to use social media to market their product. Even if you’re promoting your product through a grassroots social media campaign, there is still an associated cost – time. This is either your time or the time of someone you have to pay to help you.
If you can not answer these questions, you should not begin your marketing efforts.
- What is your cost per acquisition per new user or customer? (How much are you willing to pay per new customer?)
- What is the lifetime value of your customer? (How much money will your customer make you over time? Will you make more profit from this customer than loss in the long run?)
- What are your marketing goals? (Are you trying to increase engagement with your brand, drive more sales, or something else?)
- How will you measure results? (By increased sales? By blog comments? By unique visits to your website?)
- What’s your conversion rate? I can drive all of the users in the world to your website. However, if you can’t convert them, you’re wasting your money and time.
If you have no marketing budget your application or website will FAIL. Marketing is the business function that connects consumers to products. For some reason, a majority of start-ups seem to have missed this class during business school.
Whoever said “If you build it, they will come” was not a marketer.