Marketing is Your Commitment to Growth …
Investing in both marketing and sales requires ongoing commitment to ensure sustained growth and brand visibility. It’s crucial for B2B tech startups to allocate an appropriate budget for these functions. A common guideline is to invest 10-20% of company revenue in marketing, though this can vary based on industry, growth stage and specific business goals. Founders who disregard the need to invest in marketing will experience stagnant or slow growth, and as a result, challenging periods of financial performance. Even though small businesses may have financial constraints, they must commit to growth by ensuring there is a resourced marketing function capable of generating sales opportunities.
Momentum Builds Over Time
Your investment in marketing over multiple years compounds to build awareness that translates into more market momentum than the humble numbers could produce as a one-time investment in a single financial year. For this reason, you must start investing in marketing as soon as you can and never stop – it’s a continuous process. Just to be clear, investing in company-branded hoodies or any other branded trash is not helping to build your brand; it’s diverting scarce resources away from generating leads for the sales pipeline. In the early years of any startup, the focus must always be on selling by acquiring new customers as quickly and efficiently as possible.
Be Front of Mind
Being consistently present in your market allows you to increase awareness and build momentum over time. As you begin to build momentum over time, you can begin to ride the wave of brand equity you invested in during the early years. As you top up market awareness and goodwill with continued activity, you create a formidable presence in your target market that helps differentiate your business and makes it harder for competitors. Success breeds success, and as your marketing and sales teams learn more about what works when generating new leads and how to convert them to customers, they will continue to win more business and accelerate growth. This is why, once you start, you must never stop your continued marketing investment and activity.
Why Invest Continually?
If you do not continually invest in marketing and sales, your startup will stagnate and ultimately risk failure. It really is that simple. Even if you achieve early-stage success with limited investment, that is the time to increase your marketing spend and secure your future with continued growth. I sincerely hope this serves as a warning to founders unsure about the importance and benefits of allocating whatever limited resources they have available into marketing, and more specifically, lead generation activity. If you are serious about winning, staying competitive, keeping up with market trends and differentiating from competitors, then you need a strong and integrated marketing and sales function that is as well-resourced as you can possibly afford.
Take Control of Your Own Success
Maintaining a healthy investment in marketing helps a startup stay consistent and ensures the brand remains in the minds of prospects you would like to sell to. It’s not a good medium to long-term strategy to depend on customer or partner referrals to provide sales leads. Although both channels are welcome, they are usually both unpredictable and unsustainable. You must take control of your own destiny if you are to have any chance of sustained growth. Even if you have a bursting order book, a healthy pipeline and think you would struggle to serve new customers, NEVER stop investing in marketing and building your brand. Just as you can experience a peak in demand one year, the reverse trend is equally possible in subsequent periods. So, do not leave your financial performance to chance.
Never Stop Marketing
Things can change very quickly in the life of a startup, and situations can polarise from one quarter to the next. If you relent from sustained marketing activity to make your brand the number one in your category, I can guarantee your sales conversion will also drop off, and significantly. If your sales pipeline is healthy today, recognise that this is but a moment in time. Whilst you may welcome the good fortune, it is not an opportunity for complacency. In as short as one to two quarters from now, things could be very different. The temptation could be to throttle back your marketing, but if you do that, then you must expect your future pipeline to suffer from the opposite problem of not having enough sales opportunities to sell to in the future. Do you want too many or too few leads to sell to? I know which problem I would rather have to deal with.
What to Do if Your Order Book is Full
If you are concerned you are generating more customers than your small operations can onboard or service, this is a sign you are doing things right and not a sign to stop marketing and selling. In such a situation, when you win new clients, add them to your order book or create a waiting list, but be transparent with them about when you can deliver to them. Set expectations clearly, and then nobody can be disappointed. The chances are, making new customers wait a little will only make them want your tech solution even more. Explain to them at the appropriate stage in the sales process the timeline for delivery. If they are serious and convinced of the benefits of your solution, they will be prepared to wait, rather than restart the entire buying process with a different provider. Institutional investors love a startup that can show they are oversubscribed and struggling to meet demand. What better business to fund and scale?
Never Turn Real Customers Away
If you are disrupting the market, there may not be a like-for-like alternative anyway. Never turn business away from prospects that fit the criteria of your Ideal Customer Profile (ICP) in your target market, even if you cannot serve them immediately. You may be surprised how willing new customers will be to wait because you are limiting supply based on a success story and because you will not compromise the quality of service. Take a deposit and provide them with an onboarding timeline. This is more evidence that you are the right choice for them, and they will more likely be an excellent match and long-term customer. This is part of being relentless about growth.
Qualifying Out
Any target prospects you cannot immediately accommodate, who will not wait in line, may feel like a missed opportunity. However, they may be looking for a convenient way to qualify themselves out of the deal if they are still unsure. In the scenario where your solution is oversubscribed, you have the time to let new prospects consider their options, but always keep the door open for them to come back and re-engage later, rather than trying to force them into an already congested process. Any leftfield prospects that sit well outside your ICP criteria can be qualified out more quickly by you, without any feelings of guilt or remorse. This is good practice anyway, regardless of whether you are oversubscribed. Unless there are exceptional circumstances, be wary of breaking your business model for customers who aren’t a good fit. You must think long and hard before committing to something that could bend your business out of shape.
Are You Here to Follow or Lead?
For nascent B2B tech startups, building a strong brand is one of the many important steps toward creating a sustainable business. Using cost-effective strategies means that even with limited resources it’s possible to extend your reach and make a significant impact in your target market. Consistent investment in both marketing and sales is crucial for sustaining growth. If you do not have the appetite to dedicate between 10-20% of your revenues to marketing each year, then accept the business will only ever be a small player in your market segment, never a leader. If you are content with creating a lifestyle business, then this is probably fine. However, if you have bigger ambitions or investors demanding scale, only a dominant market presence will attract the customers you need. With a strategic approach to marketing and a clear brand identity, you can punch above your weight and achieve success, but only if you are consistent and committed over the longer term.
You may want to read: “Why Tech Startups Offer Equity to Employees.”
