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The Purpose of Marketing

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Is NOT to make your product sellable.

Most of us have the idea that marketing should make our product sellable; that we need logos, branding, great website design, and tight messaging in order to make our product sell. If that is why you are doing marketing, you’re in trouble.

Bad marketing works really hard to sell the product. It has too, because the product won’t sell itself. A lot of people can’t sell anything until their marketing is in full swing. That should be a red light.

Good marketing works really hard to inform people of the product and more importantly, expand the reach of people who are hearing about what is already a great product. The product doesn’t need cheap parlor tricks to sell it, it would sell itself. It simply needs more exposure.

The best marketing simply makes more people aware of a product that would sell without any marketing at all.

Not All It’s Cracked Up to Be
People buy great marketing once. If your marketing is what is selling your product, you’re in trouble. The overwhelming majority of sales are to existing customers and referrals from existing customers. Great marketing can actually make a nominal product even less referrable. When someone buys based on a very high expectation created by the marketing and it doesn’t deliver, they’re not going to refer it.

Is your marketing trying to sell your product, or make more people aware of the great product you have?

How to Know Your Marketing Sucks
1) The “marketing is the key” approach – You’re hoping your marketing will convince people to buy your product who wouldn’t buy it by just being presented with the product itself.

2) The delayed “magic” info – You make people listen to or read a bunch of hype, hyperbole, history, and hooks before you get to the “three things that will change your life”, or “the thing we’re selling that will transform your business”. Blechh.

3) The bait and switch – You pretend you are presenting an article, news, research, etc., when you’re just using these cheap parlor tricks to suck people in to your marketing. The Motley Fool does this all the time – I unsubscribed.

4) The free lure – it’s not really free.

5) The offer maze, or Pied Piper – start with the free lure, then talk some more, make a slightly bigger offer, talk, bigger offer, talk, the big offer. The 50’ long website that gives the big pitch after scrolling to the bottom. Cheap parlor trick. Real products don’t need this kind of marketing.

6) Focus on new clients – This is the big one. If your marketing is focused largely on getting new clients, you’ve got the wrong focus. It should be aimed at people who already know and love you, and it should give them tools and reasons for getting others on board.

Great marketing gets people to buy a great product who then carry the lion’s share of the marketing for you as Raving Fans.

Don’t use marketing to make your product sellable. That approach is sleazy, inauthentic and lacks any staying power. You’ll have to keep up the marketing assault on new customers in order to stay in business, and everyone will tire of you quickly.

Focus on Your Raving Fans
Use your marketing to give your existing customers (Raving Fans) simple ways to sell for you, and to expand the reach beyond your existing market, who will then carry the ball for you as well.

Use your marketing to build relationships with your existing clients. It’s much more powerful.

What to Obsess About at Startup

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And why

Most business owners obsess over the wrong things at the wrong time, costing time, money and even the business itself. What should you obsess over? When?

At startup we obsess over three things we shouldn’t:

1) The beauty and design of our product.
2) The beauty and design of our marketing (logo, business card, complex website, wrapping our van, etc.).
3) Focus groups, or other outside opinions that don’t involve someone’s wallet.

These are not things to obsess over at startup. They come later (in a future post we’ll discuss when these things become more important).

What should we obsess over at startup?
1) Sales – Are people buying right now, without fancy marketing, fancy packaging, or a fancy logo? Sales is NOT a focus group of people SAYING they would buy it, but cash actually exchanging hands. If this isn’t happening, don’t bother with a logo, website, focus groups or making the product prettier.

Nothing matters if people aren’t willing to buy the product long before it’s perfect. If the basic product isn’t enough to draw people in, then all you’ll be selling once you make it pretty is – “it’s pretty”. Google, Facebook, Basecamp, the automobile, cell phones, printers, TVs, radios, movies, cosmetics, you name it – none of them were very good when they came out, but sold anyway because the basic idea was really good. They got pretty later.

Focus first and foremost on selling a first generation product or service. If it doesn’t sell without the bells and whistles, the bells and whistles are very unlikely to make it sell more.

2) Close Ratios – How many Connections become Buying Conversations become Customers? Do I know the “close ratios” of Connections to Conversations to Customers? If I don’t know these numbers early on, I have no clue how to grow my business. After “Does it sell?”, nothing matters more than your close ratios. Knowing these defines all of your most important activity about how you will find customers in the early stages.

Example: I need 10 new Customers a month, which means I need 30 Buying Conversations (33% closing ratio), which means I need 90 Connections (33% ratio). If you don’t know how many people you need to reach to make a sale, you’re employing the Random Hope strategy of business. Good luck, because luck is all you’ve got.

3) Profitability – not “Am I profitable right now?”, but “Will this product/service be a profitable business?”

I worked with one client who I encouraged to make a few prototypes quickly, and take them out and see if they would sell. Instead they did focus groups, spent tens of thousands on product design, focused on product name, logos and branding, and put together a highly complex integrated marketing program with a great website, email campaigns, social media, etc. The product did not sell.

Marketing is what you do AFTER you have a viable product that sells on it’s own merits. Marketing will not make it sell, or will only make it sell nominally enough to fool you into staying in business.

When I started Crankset Group, for almost the first year I had no business card and a simple billboard website (1/2 page-no scrolling, almost no info, one email address), just to prove that most businesses don’t need marketing at first. They need to sell something.

Marketing is not the key to selling your product. Producing something that people want to buy before it’s beautiful is the key. If they will buy it when it’s slightly rough, they’ll love it when it’s refined.

At Startup, Profit Potential is Good
And don’t be fooled if your product or service sells like hotcakes right out of the gate without good marketing. Check your pricing and make sure this business will be profitable.

A few years ago in the TV series “The Office”, Michael Scott started his own paper company. He was able to pick up a lot of clients very quickly, seemingly proving he had a great business. Then his accountant told him that his pricing was too low and the more clients he landed, the more money he would lose.

Top line revenue is not profit. Profit is the number at the bottom after you pay for everything else. Because you may have startup expenses, you won’t actually see profit right away, but the profit potential must be very clear from the outset. Get outside eyes on this (i.e., accountant). Like Michael Scott, you almost certainly will be clouded, believing you see profit potential where there is none.

Sales, Close Ratios & Profitability Potential
People buy great marketing only once. If your product isn’t sellable without great marketing, it will die quickly. Word of mouth is the most powerful marketing you have. Make something people want, and serve them as they buy it. If it sells and it will make you profitable, then you can employ marketing to expand the reach of a product that is already viable.

Next week we discuss what to obsess over after you begin to grow.