Thanks,

Cindy

Brad Feld has a great post on how marketing in startups is broken. He despises the word “marketing” because it is often the weakest link in a startup company. He goes on to say:“Marketing” is vague and non-specific, often…

Brad Feld doesn’t like the term “marketing”:
I kept hearing the word “marketing” used generically. I despise the word “marketing” – it’s often the weakest link in a startup company. “Marketing” is vague and non-spe…

The question I have about your post is that while customers can be awesome sources of leads, testimonials and ideas, their ability to drive sales of a product is a cycle driven process. X people can only drive 10-X or whatever sales and then the next bunch has to join in. But when you only start with a few customers the process of getting from 10 to thousands is a few cycles away. On the other hand if you can start with a few thousand, getting to ten thousand is only one cycle away. And when you have a company that needs to get to 10,000 sales sooner rather then later to beat the burn then you sometimes can’t afford to wait for those first cycles to happen organically. That’s why you see companies spending so much money to get that first big batch of customers that can then evangelize the product. For a lot less money then latter on they get to a few cycles and save a ton of time. I agree with you that word of mouth has a lot of power but I would argue that it is just another tool in the chest of a great marketer. I think your problem with marketers is not the skill itself but rather people who suck at it. Steve Jobs is happy to be called a marketer because he is great at it. And as you can see with the Nano, a perfect WOM product that sells itself, Steve is still spending a ton on money marketing it.

We’ve realized that — especially in enterprise-class companies. That’s why we’re building a lead generation service for these companies. Not only are marketing VPs a bit flawed these days (most are very smart people who either have no idea what their customers really want or cannot remember what push-back from a customer felt lie and as a result are out of touch with the pain thier front-line sales team is going through), “lead generation” still takes place via over-engineered or not-so-well thought out programs (take your pick).

I’m what you might call, a “Recovering Marketer.” Funny thing is, I almost forgot why I phrased it that way — until I listened to “The Persuaders” a “Frontline” piece on marketing and branding (its still out there in streaming audio in 4-parts on their site). The report was great but to listen to the marketers talk (if you can really call it that), I was nearly physically ill. They are missing the point and shoveling more BS our way than ever before.

The thing they (and the non-lead generation-minded marketing teams of which you speak) are missing is the fact that if marketing is to be effective, if it is to generate leads, it has to be simple, clear, and most of all relevant.

Lead generation by itself isn’t enough, developing programs, opening one’s ears, and engaging in (paraphrasing Cornell West), “a constant state of self criticism” when reviewing your offering’s relevance (by product and industry sector) is the only way to organically grow top-line revenue.

I write about this because it’s the white space we’re going after (but this is not a commercial). It’s really sad how much they’re missing the mark.

Too many people on your side of the investment ledger invest and leave the lead generation up to the wrong people. We’re just trying to help them live up to their job description. If that happens, we all win; their products sell, your investments pay off, and the interruption a target company endures to hear a “marketing/lead generation” message is worth the opportunity cost (from an attention theft point of view).
Thanks for the post. I hope people don’t overlook this as a “soft” post, it’s important and more people should think about this.

Keep up the great thoughts and great work.

– Vince

The challenge for a start-up is how to get to that point.

Initially, a start-up needs to use traditional sales techniques to close orders from skeptical customers who have never heard of the company and its products. Once the company has achieved success selling to these risk-taking customers, the question becomes how to sell to the next type of customers. This next group typically wants to see that a company is recognized by the media (in advertising and editorial coverage) and frequently wants a referral from a satisfied customer they know and trust.

This second group represents the greatest growth opportunity for the company, so it’s important to handle this transition well.

Advertising and public relations activities (typically called “marketing”) are valuable in helping this second group of potential customers feel comfortable buying the company’s product. However, the starting point for generating revenue is capturing and processing leads from media, trade shows, blogs, and, of course, customer referrals. When lead management is handled by the sales organization, there is a greater likelihood that leads can be nurtured into prospects, many of whom will turn into customers.

Treating lead generation as part of the sales process has the added benefit that it can easily be included in the metrics used to measure the effectiveness of the marketing and sales process. This results in a higher return on the marketing and sales investment.

Our company has a service called KudosWorks.com that lets businesses automate word of mouth marketing by first capturing testimonials in a variety of multi-media formats and then accelerating customer-to-friend referrals with reward campaigns. As charter members of WOMMA (word of mouth marketing association) we have always known that the best way to gain new clients is by giving your customers the tools they need to recommend you to their friends.

I would love the opportunity to discuss this with you further.

Thanks
Herbert Ong
Founder and CEO
Genuosity Inc
http://www.kudosworks.com

Also, if they have pricing & your CPA pretty well set, there are performance-based marketing orgs for virtually every channel & marketing tactic – online and off. Even if you dont have a track record they will usually run tests based on a fixed CPA. We spent a year hunting them all down. They are always looking for new things that have pricing & CPA models that work.

They would be far better off firing their entire marketing staff, and would be profitable without the ineffective TV advertising.