March 2, 2015

The Elusiveness of Startup Marketing ROI

marketing ROI

When talking to startups about marketing, one of the most frequent questions is “what are the deliverables?”

There is another way to look at it: startups want to get a handle on ROI. If they’re going to spend money on marketing (a strange concept for many startups!), what can they expect? Is it higher sales, an increase in leads, more social media followers, etc?

For startups, marketing is a different creature. Unlike sales or software development in which you can see tangible progress, marketing success can be  subjective. This is particularly true for early-stage startups looking to establish a marketing foundation that sets the stage for other things to unfold.

Early-stage startups need a well-articulated story that puts the spotlight on unique value propositions, key benefits, and leading features. A good story lets startups venture into the world in a coherent way to connect with target audiences.

But here’s the rub: It is difficult to measure the ROI of core messaging and storytelling. How can you measure the ROI of a good story? What is the impact of unique value propositions that resonate with target audiences?

These marketing components can be measured subjectively based on whether people (internal and external) believe they hit the mark. Do they sound good? Do they make sense? Do target audiences believe they are authentic and believable? Do customers quickly understand what our product does and the value it delivers?

These questions may generate positive responses, but how is their impact quantified? It is a difficult question to answer. It is like MasterCard’s “Priceless” commercial starring Bobby Orr about the value of “no goalies”.

This makes marketing ROI elusive for startups that are reluctant participants. It is frustrating to spend money on marketing when it is hard to assess the value. In some respects, it is an investment based on faith rather than tangible results.

For marketers, it means their work gets questioned. What have been doing for the past weeks/months? How come we’re not seeing an influx of new leads and customers given the money being spent? Does it make sense to spend money on marketing?

But here’s the marketing reality for early-stage startups: the money spent on marketing is an investment that will, hopefully, pay off in long-term. While it’s difficult to see tangible short-term results, the marketing work plays a key part of a startup’s growth. In many respects, it lets them walk before they run.

Buying into the value of marketing is a necessary evil for startups. They may not have a strong grasp of marketing, but they have to believe it delivers benefits, even though they’re difficult to measure….at least for now.

For start-ups and fast-growing companies looking to jump-start their marketing, I offer strategic and tactical services. Everything from building marketing engines to telling better stories through messaging/brand positioning, and reaching audiences by developing engaging content.

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