6 Game-Changing Marketing Principles to Stay Ahead (From my Experience Mentoring startups)

Gaining competitive edge for modern marketing organizations

(Courtesy: DALL.E. Image generation keeps getting better)

Some of my most humbling and rewarding experiences are emerging from mentoring early-stage startups to help them build marketing capabilities. This experience has sharpened my skills and strengthened my pattern recognition. As a lifelong learner, these engagements also allow me to delve into my favorite pastime: learning & building capabilities while tinkering with marketing tools and platforms. Through these experiences, I have developed a deeper appreciation of few marketing principles and patterns that hold true for any business regardless of the maturity stage, and for me, mentoring the startups have brought these front and center -

1. Holy grail for fixing Customer Acquisition Cost (CAC): Conversion rate optimization

I typically end up spending quality time with a couple of founders every month and in the past months, when I ask them to list their top challenges, CAC pressure has been in top 3 for most. This is not limited to early-stage only. Mature businesses across all industries are facing the same dilemma

Fact is - CAC attributed to paid channels is on an upward trajectory since last 5 years and is potentially unsustainable if not mitigated.

Managing Customer Acquisition Cost (CAC) is increasingly crucial for every business and especially startups where the repercussion of mismanagement are more acute, directly affecting burn rates. Since 2018, cost-per-clicks in paid marketing channels has risen by 1-3% on average across industries. Per word stream data, 2023 was even more challenging - Largest spend channel, Google Ads data shows an 3% increase in ad engagement(CTR) but a 5% rise in CPC due to significantly higher pricing/competitive pressures compared to any of the prior years. This, accompanied by 10% decline in conversion rates is causing cost-per-lead to go up by 20%. You can’t directly influence everything , however you directly control the user journey once they are on the landing page and can make step changes to improve conversion rates.

As upfront channel level cost-pers from performance channel rise, it will be essential to ensure that funnel/journey conversion rate gets better to compensate for the deficit. Conversion rate optimization is the key to improving CACs and gaining that ROI edge. CAC pressures are real, but they are manageable with a focused and strategic approach. Another mitigation tactic is relentless focus on enhancing organic presence.

(Case in point- In my prior role, going from static to interactive lead gen form improved the conversion rate by 32% and made the economics viable for a product that was on sub-optimal ROI glidepath)

Word stream data below

2. Product Market Fit (PMF): Focus on Satisfaction First

PMF is a balancing act between 3 key dimensions - demand, customer satisfaction, and scale, which is eventually driven by cost-efficiencies. All those 3 dimensions should be firing on all cylinders but here is the catch -

Demand, Customer Satisfaction and Scale can be in conflict with each other

Think about it - you can generate great CSAT scores by deeply discounting the product and creating demand, but you can’t achieve scale because it will be cost prohibitive. PMF is achieved when target customers are buying, using, and recommending your product in significant numbers. It is easy to fall into the efficiency/economics trap while figuring out PMF.

The successful founders realize that cost-pers and burn ratios are important, but solving for customer satisfaction is paramount when they are in the 0-1 customer acquisition phase.

Optimize satisfaction relentlessly until customers love the product and can't do without it. When customers are satisfied, they become advocates, spreading the word and driving organic growth. Focus on delighting your customers, and both demand & scale will follow. Measure satisfaction through Net Promoter Scores (NPS), customer satisfaction scores (CSAT), and churn rates. These metrics will guide you in refining your product and ensuring it meets the needs of your target audience.

3. Appreciate the Role of Creatives

It breaks my heart to see how underappreciated the role of creative is (and is becoming even more given the all the airtime towards Gen AI ). In this article’s context, I am defining creatives broadly, ranging from display ads and search ad copy to billboards and social media content.

Creative drives 40-60% of campaign results. Yet, creative content often remains an afterthought, treated as a routine task rather than a critical element deserving thorough consideration.

Last week, one fintech founder I am mentoring simplified their hero copy, leading to a 22% lift in landing page progression (just imagine the transformational nature of a simple tactic). This oversight can make or break a campaign. Don’t treat it as an afterthought; make it a focal point of your strategy. A well-crafted creative can tell a compelling story, evoke emotions, and drive action.

4. Obsession with Customers: Action the Feedback

Customer centricity is a buzzword, but successful founders/businesses walk the talk. Uncovering customer insights and acting on them is vital. We can get overly focused on optimizing cost-per-click without understanding why 95% of traffic is bouncing on Landing page. Is it choppy messaging, confusing imagery, or flat positioning? Fixing some of that would automatically take care of cost-pers that matter

Current Focus: 70% Cost-per-click, 30% Insights.

Suggested Focus: 50% Cost-per-click, 50% Insights.

Customer obsession means going beyond surface-level metrics and diving deep into customer behavior. It's about understanding not just what customers do, but why they do it. By focusing more on insights, you can identify and address pain points more effectively, improving overall customer experience. This approach ensures that you're not just attracting visitors, but converting them into loyal customers.

Tools to Use:

- Heat Maps: Visual tools showing where users click, scroll, and spend the most time on a webpage, revealing areas of interest and frustration.

- User Feedback Loops: Regularly collect and analyze user feedback to identify trends and areas for improvement.

- A/B Testing: Run controlled experiments to test different versions of a webpage or product feature.

- Customer Journey Mapping: Visualize the customer’s journey to identify touchpoints and areas for improvement.

5. Product Positioning: The Overlooked Story

Some of the brilliant founders get this right from the start. They take the time to craft a positioning statement that speaks directly to the needs and desires of the target audience ; Positioning is the bridge between your product and your market.

It's the story you tell to make your product stand out in the hearts and minds of potential customers.

Effective positioning goes beyond listing features; it focuses on the emotional and practical benefits your product offers. When you nail this, your product doesn't just exist—it resonates.

Finally, Positioning isn’t about features and technical details; it's about the user and the benefits. Think: "For [targeted customer], [product name] helps [value or benefit] by [how it stands out]." Adapt this format to your channel and medium.

6. Last but not the least - The Habit of “Repetitive” Storytelling

Here's my general formula for success:

30% Story + 30% Business Model + 30% Execution + 10% Luck.

While critical for everyone, storytelling can be a dealbreaker for early-stage companies. In the early stages, resources are limited, and the brand is still taking shape. This is where storytelling becomes paramount. It's not a natural trait for some of us and needs to be acquired, but it’s a transformational habit worth acquiring and nurturing. A compelling narrative can tug at investors' heartstrings, differentiate your product in a crowded market, attract customers, and foster loyalty. Over time, the benefits of storytelling will compound and permeate all areas of business and life.

When telling the story, talk about why business exists and how it can make a difference. Successful storytellers make it sound like a gripping novel, filled with challenges, triumphs, and a vision for the future. They make it repetitive and leverage every forum to everyone behind the mission

How do you know it’s working ? When your stakeholders are bored of hearing it, That means it has percolated wide and deep.

This applies to businesses of all shapes and sizes. So, try to practice storytelling. Share your vision, your mission, and the unique journey that brought you here.

Back to Fundamentals:

As you can tell, while there are newer trends, timeless fundamentals stand the test of time: Understanding your customers, telling a compelling story, positioning your product correctly, managing costs, and relentlessly focusing on customer satisfaction. By adhering to these timeless principles, anyone can navigate the complexities of growth and achieve sustainable success. For me, mentoring startups brought all of these principles to life.

#Startups #Marketing #Storytelling #CustomerCentric #PMF #Creatives #Positioning