The balance of power is shifting toward consumers and away from companies…the right way to respond to this if you are a company is to put the vast majority of your energy, attention and dollars into building a great product or service and put a smaller amount into shouting about it, marketing it. - Jeff Bezos
When it comes to growing a startup or a small business, figuring out the right way to spend your limited marketing resources can be a challenge. The conventional wisdom is to try to understand what the competition is doing and then to find a more cost effective and efficient way of doing the same thing. This approach is clearly a risky strategy. On one hand, you can end up wasting your budget on unproven strategies, or on the other hand, you may spend too much on the things that only "could" work.
These are two companies offering almost identical services but who took very different approaches to their marketing strategies.
- Both had social components.
- Both jumped on the quantified self movement in it's early days.
- Both integrated with Facebook and Instagram for sharing.
- Both have online dashboards.
- Both focused on strategic partnerships, Nike with TomTom and then Apple. Strava with Garmin and a long list of other partners.
Instead of investing their limited resources in trying to go head-to-head with Nike, Strava took a more consumer-centric approach to their marketing strategy. Nike invested the majority of their marketing budget on building awareness for their product. They did this by partnering with influencers like Casey Nistad and investing heavily in online advertising. Strava, on the other hand, focused on incrementally improving their product and then sharing the product updates with their current and prospective customers. Their marketing strategy centers on sharing the impact their product has on real customers, not just celebrities.
Strava took an arguably better approach by keeping their “influencer” marketing cost low and reinvesting the savings into their actual product. Having a better product in turn gets more users, which in turn gets them more dollars to tell more stories, which in turn... you get the picture.
I’ve personally used both apps. I loved that both apps allowed me to share my runs, were thoughtful about the way they baked social technology into their products. Instead of having “sharing” being an afterthought the way it worked felt considered.
That's the baseline. I now exclusively use Strava to track my runs, despite Nike’s huge marketing budget and celebrity endorsements. Here’s why, their marketing is focused on gaining exposure, not improving their product.
So founders, if you take one thing from this illustration it should be this: invest in your product. You can’t just build it and they will come. Instead of trying to adopt the competition's marketing strategy, focus on what makes your brand unique, invest in improving it, and tell that story.
To do so, avoid blindly following conventional wisdom. Instead, start by asking yourself these five questions about your competition's strategy:
- What was the conventional wisdom at the time this strategy was put in place?
- What resources were needed to deploy the strategy?
- If you were to deploy the same strategy, how would you measure success both qualitatively and quantitatively?
- Is this a scalable strategy that can be operationalized?
- What would be the minimum test you could use to validate your assumptions about the strategy?
- COCO Dreamcast with Anna love Mickelson - How to create a minimal viable test.
- Hacking Growth: How Today's Fastest-Growing Companies Drive Breakout Success - Using data and technology to inform your growth strategy.
- Killing Marketing: How Innovative Businesses Are Turning Marketing Cost Into Profit - Forget the traditional way of categorizing marketing, treat it as a profit center.
- David and Goliath: Underdogs, Misfits, and the Art of Battling Giants - Malcom Gladwell - Change the way you look at your competition.
- Sprint: How to Solve Big Problems and Test New Ideas in Just Five Days - This is how you get your team to adapt and experimentation mindset.