We invest in businesses with the potential to build a ‘loved brand’. It doesn’t matter whether B2B or consumer, the ingredients for building a loved brand are similar: some kind of innovation that solves a need; a market within which there is room for the innovation to establish itself; getting the target audience to try the solution; then the consumer getting into a habit of continued use.
Most start-up businesses fixate on the innovation element – what is their product, service or experience. A good pitch will also bring to life the insight that got them there, to really help the investor to see the need and product/market fit. Some will do a good job of articulating the proposition and give confidence in the ability to engage the target consumer.
Where we are consistently disappointed is how seldom we see a joined-up marketing plan. A founder will often say that a large proportion of the hoped for investment will be spent on ‘marketing’ but without a plan that describes how. By the end of our distillation process, this is what Worth Capital hopes to have seen to give us confidence in a marketing plan.
1. Brand proposition
In essence, the story behind the brand you are hoping to establish – about your product or service, maybe about you and certainly about why people should care. A clear brand proposition will contain some form of:
· the purpose of the brand: for example, IKEA’s purpose it to ‘create a better everyday life for the many people’. A start-up’s brand is likely to (and should) be a little more focused to start with. Innocent Drinks’ is to ‘make natural, delicious and healthy drinks that help people live well and die old’. The purpose should define what you do – we exist to….? If you find that difficult, try defining what you don’t do, sometimes that marks businesses out from the competition. A purpose doesn’t need to be a perfectly crafted strap line, it is not likely to be seen by the public, but it should reflect what your business stands for.
· your target customer: who you think should notice and care about what you are offering – and why. The more focused this is the better. If you have several focused customer groups there should be a sense of priorities, possibly distinguishing between their value and the order in which you’ll go after them – these are not always the same.
For consumer businesses there is often a temptation to make customer segments all about demographics, e.g. ‘young Mums aged 25 to 34’. In our experience, and more so as traditional stereotypes break down, attitudes and behaviours are often more useful, e.g. ‘young at heart liberal minded women’. These lead you more directly to how and where you would target communications. It might help to create a pen portrait of your audience and mapping a day in their lives to tap into their mindset, attitudes and behaviours. It may also help you identify when are the best times to communicate with them throughout their day.
The target customer should link back to the product or service – how has it been designed to serve this market, or what purchase behaviours are there to illustrate the target consumer.
· what makes your business better than the competition: some will say your ‘Unique Selling Points (USPs)’ but, whatever you call them, what is it that makes you stand out from the crowd? Just having your wish list is not enough, you need to demonstrate what it is in your product, service or business model that will give consumers (and investors) the reason to believe you.
· what’s behind the name: if this is not perfectly obvious (usually a good place to be with a name) then what is the insight and logic behind your choice of name, including its relevance now and in the future?
· your tone of voice: the way you want to show up in front of your potential customers, the kind of language you would use, the style within which you’d want to communicate and the logic and insight behind them. If nothing has been created yet, this could be a mood board to illustrate the tone of voice. Whatever it is, this is a good time to make sure there is something that makes the brand feel real and tangible.
2. Communication plan
If the brand proposition should get everyone excited, the communication plan is about getting word out. This is always more difficult than anyone expects. Keep in mind that very (very) rarely does
anyone act on the first time they see a brand, it usually takes multiple and repeated interventions to influence consumer behaviour.
A decent communications plan will have lots of different activities and for each one:
· a description of the activities: e.g. conferences or LinkedIn advertising for a B2B business, Instagram advertising for a consumer eCommerce business. Think hard about whether the activity is going to make a difference, is it going to create a change in a consumer’s thinking or behaviour, is it going to help you stand out from the crowd?
· target audience: a description and a vague sense of the numbers – e.g. 15,000 first year students; 20,000 small businesses in Scotland.
· the expected impact: e.g. 3% click through, 200 footfall per day, 1% purchase.
· high level actions needed to make it happen – e.g. photography, copy, data analytics.
· any dependencies: i.e. couldn’t do before ‘such and such’ has happened.
· a first cheap and quick experiment to validate the potential: i.e. before significant effort and cost. This is most often overlooked, even by the biggest companies. What quick and dirty experiment can you run to validate that the investment is worth it, before spanking a whole lot of your marketing budget on a hope and a prayer?
· the cost: both in Sterling, but also in effort. With limited funds the choices you make to do something usually means a choice not to do something else.
· the return on investment: from the cost and the impact, e.g. this might be the cost per user acquired, or the cost of a average purchase.
Taking a step back and looking at this plan, and keeping it live through plenty of learning of what is working and not working, will lead to a clear sense of priorities and potential timings. So the plan becomes a schedule of activities that shows a considered level of communication across different customer groups. This can then be maintained as a rolling plan against which the success or failure of experiments and campaigns can be planned and monitored.
3. Consistency with the financial projections
Lastly we look for the investment needed in the communications plan to be in some way related to the projected marketing spend in the financial forecasts. So ideally there will be a spreadsheet element to the marketing plan that adds up the projected spend and expected impact over the course of the next, say, 12 months. Of course if the content of the communication plan would cost much more than the marketing spend forecasted then something is amiss. But more usually the content of the plan is much less than the projected spend on marketing, which suggests someone is making it up as they go along.
Then one point to note across all three components. No-one will expect a plan to be slavishly followed. The first plan is a starting point. It should be a solid foundation, but from which each component can be amended and finessed as more is learnt about the business, the brand, the customers and which communications channels are working well or not.
Enter the Start-Up Series today…
Winning the Start-Up Series will not only give you access to equity investment, but you will receive hands-on help from Worth Capital to work on, refine and implement your marketing efforts – as well as many other areas of your business such as operations, finance, sales channels, future funding & growth strategies.