This is the third in a series of articles on Essential Understanding of Growth in 2020, contributed by Unmarketd, a curated marketplace for elite performance marketing and data & analytics experts. You can find the first article and the second article on TLD.
When your company gets funded, or often, as soon as your title on LinkedIn becomes “Founder and CEO”, you will be often inundated with agencies and gurus who try to advise you how to do marketing.
Alas, most of this advice is geared towards making you spend, rather than making your marketing effective.
The following two slides that we made should give you a pretty clear idea of the advice you should ignore, why, and what you should do instead.
For those who are not familiar with the marketing jargon, TOFU, MOFU, BOFU stand for Top of the Funnel, Middle of the Funnel and Bottom of the Funnel respectively.
The startup branding fallacy
Another area that founders and CEOs need to be acutely aware of is that branding for most of them is actually useless. Our argument as following:
- There’s a vast ecosystem of consultants, agencies, and other middlemen who are highly incentivized to have you spend $ and effort on non-ROI/non-performant activities. Early startups should opt out of all of this
- Anyone who’s been on the homepage of TechCrunch, AngelList, Hacker News, or even in the NYTimes knows that it’s a increase to your dopamine but not so much your customer acquisition 🙂
- Furthermore, the metrics-driven argument is obvious. Ultimately, the engagement in every product can be deconstructed into a series of user cohorts that join and decay over time. How does brand help these cohorts? Our observation: They don’t help much.
- One argument is that brand marketing can create buzz and word of mouth. OK if that’s the case, why does every brand-driven commerce company have >60% of their customer acquisition happen through paid marketing? Why do they have to buy all their customers?
- If brand marketing helps make acquisition ultimately cheaper, then why does every startup’s paid acquisition become less efficient over time, even as the company becomes more well known? The same arguments apply to startups’ re-engagement efforts.
Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected]