Setting the course for growth: effective marketing for start-ups

Marketing always works – that’s the good news. Every communication about a product or service influences how potential customers perceive it. Marketing begins with the first conversation about a business idea and continues with every interaction on the market, whether through direct customer contact, social media or other channels.

But is it enough for marketing to simply “work”? The effectiveness of your marketing depends crucially on how well you succeed in making your offerings immediately understandable, emphasizing their benefits and positioning them in the perception of potential customers as better or at least different from the competition’s products. For start-ups that are initially little known and have limited resources, it is particularly important that their marketing is not only available, but also targeted and effective.

Here are 6 principles that should guide your marketing from the start.

1. principle: Let your marketing team really market

Consider marketing as a central element of your business strategy. It is not just limited to advertising products, organizing events or running SEO measures, but shapes the entire 4P strategy: product, price, placement and promotion; and in combination the most important driver for sustainable growth – your brand.

Your marketing team is also the place that bundles the knowledge and data about the needs and behavior of your target groups and market segments. The marketing team should therefore work closely with other departments such as product development, sales and customer service to ensure that comprehensive market knowledge and a deep understanding of the customer flow into all areas of the company.

Marketing takes a leading role in this, focused on achieving key business objectives by increasing sales, customer base, profitability and market share. We can only speak of real effectiveness if we can prove that we are achieving these goals with our marketing approach.

2. Principle: Uses sales activation and brand building

You may know that only about 5 percent of potential customers in a market are ready to buy at any given time (current demand). These customers have a specific need and are actively looking for solutions, be it for personal consumption or for business purchases. In contrast, around 95 percent of market participants are not actively looking for solutions at this point in time (Future Demand). However, this group will be ready to buy in the future.

It is crucial for marketers to understand the difference between current demand and future demand and to recognize how these two states are related. As soon as customers are ready to buy – future demand becomes current demand – they often switch into buying mode based on existing preferences, experiences and recommendations. At this point, most people already have two to three providers or brands in mind, the so-called relevant set. This relevant set offers a decisive advantage, as it increases the likelihood that these brands will ultimately be purchased.

It is therefore essential for start-ups to both efficiently exploit current demand and to be present in the minds of the target group in the long term in order to be included in the relevant set. This requires a balanced marketing strategy that combines sales activation and brand building:

• Sales Activation aims to make efficient use of current demand by quickly and easily persuading potential customers who are already ready to buy to make a purchase. Measures for this include optimizing findability, providing a pleasant user and sales experience and minimizing barriers to purchase through effective conversion optimization.
• Brand Building is aimed at maintaining a long-term presence in the minds of the target group so that the brand automatically comes to mind when a need arises. This requires visibility, the creation of positive associations and a strong brand presence in order to be included in the relevant set.

Studies show, that a balanced combination of sales activation and brand building leads to significant long-term business effects such as increased sales, profitability and market share gains. For start-ups, this can mean initially achieving rapid success with sales activation, while at the same time building long-term brand strength through creative and targeted brand building.

Practical tip: Focus on the right category entry points

Category Entry Points are an effective concept for start-ups to approach brand building in a targeted manner. Category entry points are specific situations or moments of need in which potential customers are ready to buy. These moments can be temporal, such as seasonal events, situational, such as special occasions, or emotional, such as important life changes. For example, a company might think about buying new email communication software when it needs to improve its communication processes. Such moments offer perfect opportunities for brands to establish themselves in the minds of customers.

By identifying the most relevant category entry points for their product, start-ups can focus their marketing activities and ensure that they are not only visible, but also perceived as a relevant solution at the decisive moments. This helps to use resources efficiently and anchor the brand in the minds of the target group without risking wastage.

3. Principle: Competitive on a budget

A lot helps a lot! It is an inconvenient truth that effective marketing often correlates with the available resources: The more that can be invested, the stronger the marketing impact tends to be. For start-ups, which typically work with limited funds, this poses a challenge as they do not have the financial resources of large companies. It is therefore crucial to focus on the marketing channels and activities that have the greatest impact on their specific business goals and the particular conditions of their market.

Category entry points are a key factor here. By focusing on those moments that have the highest probability of conversion, you maximize the effectiveness of every euro invested. Once you have found the right category entry points, you should allocate sufficient resources and budgets to occupy these over your competitors.

Another important aspect is the balance between sales activation and brand building. Initially, it may make sense to allocate a larger part of the budget to sales activation in order to achieve quick sales successes and ensure the survival of the start-up. Over time, however, you should increasingly invest in brand building in order to build long-term customer relationships and brand awareness. The ratio depends on your market, but budget splits (brand building/sales activation) often tend to be 60/40 for B2C markets and 50/50 for B2B markets.

4. Principle: Positioned to win

The right positioning is crucial for start-ups to successfully assert themselves in an often saturated market. A clear and consistent positioning enables a company to stand out effectively from its competitors and build a strong bond with its target customers. The positioning serves as a common thread for all company activities – from product development to communication.

When formulating your positioning for marketing, you should consider three key points:

1. Definition of the relative value proposition: Your positioning should clarify the most important advantage of your product in one sentence. This advantage must not only be desired by your target groups (value), but should also be better or at least different from that of the competition (relative).

2. Transformation into a story: Your positioning should transform interchangeable product features into an easily understandable and appealing story.

3. Scope for creativity: The positioning should make it possible to find creative ways to effectively address different target group types. This should not only be reflected in your brand building and sales activation, but should also be seamlessly integrated into the overall customer experience.

Some good examples:

• HSBC: „The World’s Local Bank“ (B2B Banking)
• Ritz Carlton: „Ladies and Gentlemen, serving Ladies and Gentlemen“ (Hotel)
• Salesforce: „The Customer Company“ (SaaS)

5. Principle: Create “distinctive assets”

A central element of effective marketing are “distinctive assets”, i.e. brand elements that are unique and recognizable in your market and that shape your identity as a company. These include logos, slogans, a characteristic style or even specific sounds and rituals, for example:

• Coca Cola: curved lettering and the specific bottle shape.
• Nike: „Just Do It“-Slogan and the Swoosh-Logo.
• Apple: bitten apple and the minimalist product design.
• McDonald’s: Golden Arches and the characteristic „I’m lovin’ it“-Jingle.

These assets make a company unmistakable and ensure that it remains present in the minds of customers. The strategic use of these assets in all marketing channels helps you to communicate consistently and effectively – and thus build a strong brand.

6. Principle: Be creative!

In a world where we are bombarded with advertising messages on a daily basis, creativity is the key to attracting attention and building an emotional connection. It is the second most important driver of marketing effectiveness after brand awareness and plays a decisive role in whether a company remains anchored in the consumer’s memory or remains invisible.

Creativity helps to bring a company’s strategically developed positioning and distinctive assets to life in a way that is not only informative, but also entertaining, new and emotionally appealing. It should create positive associations and lead customers to choose a product or service in the future by making connections, usually subconsciously. Creative marketing is characterized by its ability to surprise, motivate and empathize while targeting relevant category entry points.

In short, creativity in marketing is not optional, but essential to prevail in a highly competitive environment. Data shows that a large proportion of B2C and B2B marketing is perceived by target groups as neutral and unappealing. This is an opportunity for you as start-ups to use creative approaches to convince your target group and gain the trust of your customers.

Conclusion: Marketing is not a question – Marketing is the answer

Marketing is a constant force that works from the initial idea to the ongoing interaction with the market. The ability to shape the perception of potential customers makes marketing an indispensable tool for any business, whether start-ups, scale-ups or corporates. The real question is not whether marketing is important, but how you use it effectively to drive growth and success.
The principles presented provide a foundation for communicating your product or service in a clear and engaging way, emphasizing relevance and presenting the offering as superior or clearly differentiated from the competition. For young companies with limited resources, it is therefore crucial that marketing is not only present, but that you target and strategize your measures.

A guest article by Sebastian Wicke, Solokarpfen
sebastian.wicke@solokarpfen.de