Business planning has evolved from a 300 page document written by economists and analysts to the more modern business canvas and more directly the lean canvas.
The Lean Canvas and other canvas models are built on hypotheses about a business and testing these or validating these hypotheses to build a viable business model before making major investments.
A significant element of the business plan that should be approached this way is the marketing strategy.
In the book Traction : A Start Up Guide to Getting Customers authors Gabriel Weinberg and Justine Mares write “Almost every failed start-up has a product or service. What failed start-ups don’t have are enough customers.”
As I mentioned I have worked with over 200 Entrepreneurs and the key challenge that the majority face is generating prospective customers or marketing.
It has always been that a new business owner would spend a lot of money on marketing channels that they are familiar with or have a bias for without knowing what to expect or with false expectations on the rate of return.
Traction is the best way to improve your chances of start up or growth success.
What is Traction?
Traction is the sign that your company is taking off: that you are meeting goals for gaining attention. Traction is growth. Wise investors would probably be willing to take a risk on a start up that is gaining traction – the attention of a market even before they make any sales because they are getting to see the proof of the potential before making the investment.
There are 19 different marketing channels that help start-ups gain traction.
Search Engine Marketing
Social and Display Ads
Search Engine Optimization
Engineering as Marketing
These are the most effective marketing channels for start ups to implement as a preliminary marketing strategy to gain qualitative evidence of customer demand.
Let me give you an example of how I implemented this for a client:
An Entrepreneur had a bold and unique coloured lipstick line that she wanted sell online.
She had 2 main challenges that we had to address first:
- She only had samples because she was still developing the formulation and key features that customers wanted
- She did not have an online base of customers
Some of the production timelines were out of our control so we focused on the 2nd challenge, that she did not have an online customer base to place orders at the time of launch.
We focused on building a traction strategy.
We identified what the best channels were to generate prospective clients:
For her business these included:
- Viral Marketing – Because her product is visually appealing we focused on creating stimulating photographs for social media featuring models of her target market in her product samples. We create the social media accounts and started following profiles that fit her target market with her brand name as a hashtag. We offered incentives for followers and reposts.
- PR- The Owner has a very touching personal life story that we translated into a “feel good / triumphant overcomer” piece that was picked up by smaller media companies which helped share her brand name and gain speaking engagements.
- Content Marketing – We used her social media including You Tube to again create a visual appeal and post content related to fashion and make up tutorials
- Targeting Blogs – Her product was designed to appeal to people who like to express themselves in bold unusual colours so we sent the content to blogs that targeted the dancehall, fashion and LGBTQ communities with a goal to gain followers on social media.
- Business Development: We approached hair salons to allow her to set up a pop-up shop on Friday evening and Saturdays and offered discounts to Make Up Artists seeking testimonies and photographs from their clients which in turn they could use to promote their business as well. The goal was to again get the product into the customers hands, try it and take photos which eliminated the cost or photo shoots giver her budget and then post to social media.
- Sales: This was implemented once the product became available but any events that the Owner was attending as a vendor or speaker she had an attractive display and product available at the event for sales. At live events we set sales goals and branded her domain name.
- Affiliate Programs: We created preferred services for clients that referred customers including discounted shipping and free trials of new products
- Trade Shows : This included hair shows, fashion shows trade and shows with a smaller entrance fee to gain social media followers and product testimonials.
- Offline Events : She held a great launch party and showcases her brand at parties and events held by her target market. This was to create brand awareness and generate direct sales
- Speaking Engagements: We developed a simple bio and approached youth based organizations that are always looking for inspiring speakers which hired her to speak about herself and business. Again creating greater brand awareness and photo opportunities for social media.
- Community Building: Through her social media we were able to engage her customers and to post pictures of themselves in the lipstick and featured them as the beauty future of the week in her brand and added them to the referral program.
All of this was done on a budget of no more than $500 and the goal was to generate an online base of prospective clients that had already validated that they liked the product and to now let them anticipate all marketing and sales online.
Now 19 marketing channels is overwhelming but there is an approach you can take find the ones to start with.
It is called the Bulls-eye Framework
- Brainstorm reasonable ways that you could possibly use each channel.
Do not skip any channels because you don’t know how to use them.
Think about speaking engagements and who would be the ideal audience.
Think about blogs that are speaking to your target market and how you could place
an ad or sponsor it.
- Rank your brainstorming efforts considering:
a) which traction channel seems most feasible and promising right now
b) which channel seems like it could work
c) which is a long shot?
This will also require that you evaluate the cost of each and the timeframe it takes to achieve the desired metrics.
- Prioritize the top three channels that seem most promising.
Here set a timeframe to test these best channels and record the efforts.
Set parameters for positive action and negative actions such gaining customers vs spending more than the product costs.
- Test your ideas in the real world. The goal is to find out which of the priority channels is worth focusing on and making a bigger investment. You want to know:
a) How much will it cost to acquire a new customer through this channel
b) How many customers are possibly available through this channel
c) Are the customers that are responding the ones I want?
d) Collect feedback on the product or service features to improve on the offering and meet
- Focus on the traction channel that is netting good results and wring every bit of traction that you can out of that channel before competitors identify it and it becomes saturated and the price of that channel goes up.
This is why you are encouraged to consider all of the traction channels in the brainstorming phase and overcome biases for ones that you may only be familiar with.
If nothing is working within in your timeframe or budget then you can re-visit the brainstorm list and choose another channel to test.
Ultimately traction is about cost effectively testing some or all of the 19 key marketing channels to gauge customer response and activity to your efforts and then using this data to invest in a bigger campaign to gain the most traction or conversions from it.