Where is the power in digital marketing nowadays? And how do startups leverage it when raising funds?
We have asked Pedro Pereira, Head of Marketing at Uniplaces to share some of his thoughts.
In what ways is digital marketing relevant to an early stage startup?
Digital marketing has lots of benefits such as being cost efficient, quick to set up, easy to target and it doesn't require any sort of expert knowledge to start. Of course, to be able to scale your startup properly you will need insight or a skilled professional in order to be more cost efficient. But, if you're still a beginner, you can do pull marketing.
What is pull marketing?
Online marketing started with push marketing, which can be compared to outdoors. You would have a lot of banners and pop-ups on websites, pushing messages towards the users. But it started evolving into pull marketing, where the users go to search engines, write what they need and get a tailored ad.
Pull marketing is a good way to identify a product market fit and quickly set up a minimum viable product (a landing page showing the user what you are selling or trying to solve, for example). Traction or willingness to pay can be attributed by seeing how many users will give their email.
How lean can you be?
Let's take an example where you have an idea on how to sell shoes in a different way or a different kind of shoe, instead of designing the shoes, speaking with factories, producing them and start selling them to the users and later realise they don't want to buy your shoes (because they want it in a different design or colour or they don't even want shoes, they actually want socks), you can simply set up a landing page showing the type of shoe, only needing to get the design made with different colours.
With this option, you can measure interaction and willingness to buy by sending people from page search, typing "different shoes" or "buy interesting sandals". They will show you what they are interested in and then once you have an email database you can start selling them your shoes.
All of this with only one page, a few clicks and little spent on marketing. It goes without saying it also depends on how big a sample you want.
What is the number 1 reason a startup should embrace digital marketing early on?
For me the definition of a startup is to grow very fast. The good thing about information economy and digital marketing is that you can easily replicate or grow the spread of your campaigns by just dialling a few switches and turn a few knobs here and there.
What is the main difference between traditional marketing and digital marketing?
Regular marketing, compared to digital marketing, takes a bit more time. For example, if you are going to a conference you need to create a stand, get business cards, print out flyers, show up, etc. If it is outdoors or television, it is harder to track and you need to set it up months before you launch the campaign, not to talk about to go through the trouble of creating the video.
With digital marketing it is easier to do customer discovery, which is crucial for the initial stage of a startup. And, as we have been able to see, people are more and more inclined towards buying online.
How can you leverage digital marketing assets when raising funds?
A lot of people just show up at a pitch session without any real numbers, only arriving with an idea and some assumptions saying "If I got 1% of 1% of 1% of this market, we would be billionaires. So I value my business in 100 million euros." This never works. But, if you get there and say "I spent 500 euros of my own money, created some landing pages, tested different propositions for my business and I actually got a lot of users interested in my, for example, pink sandals made of cork. I brought a database with 2000 user emails who pre-registered to get these sandals." I think this shows a bit more interest than just arriving there and saying you just got this idea of doing some cork sandals in pink.
So online marketing helps you get initial traction. If you are a smart person you can do it all yourself, you don't need to start hiring experts before you even know if you have something people want.
Pedro's pearls of wisdom:
- Read before doing it
- Ask other people about their experience
- If you don't have any money, do partnerships with other companies that already work with your type of customer (for the shoes: who sells the boxes? Who sells the bubble wrap?)
- Don't try "one size fits all": try knowing your customer and when you do try to understand what drives them: their hopes, fears and insecurities so that you can improve your product and find out what is going to move the needle the most.