4 Strategic Options for Startup Marketing when shit hits the fan
By now we all know that Covid19 and the impact of it is not something that will go away in 3 weeks. We are talking about 3 months of harsh measures at least and most probably we will have to deal with some form of impact for the next 9 to 12 months and maybe more.
Covid19 has our world in lockdown and on a weekly basis institutes and authorities are cutting their forecasts when it comes to the global economy and the outlook for 2020.
Impact on Marketing
Marketing in Startups is not the kind of inflated department with no strategic relevance but the mandate to spend that big media budget like in the corporate world.
Most Startups funded by Venture Capital and almost all startups that make it to or post Series-A have a Marketing Department that is much more than just the P for Promotion. Often driven by one of the founders these people influence product, steer pricing discussions, are involved in decision making around distribution and are responsible for brand and communication.
But these days it does not matter how important a department or a function is. Marketing these days is hard, everything will get a haircut and the question is how to allocate limited resources for the foreseeable future. Basically there are 4 strategic options where to focus your limited resources and budgets and why.
Product
You got your Seed or Series-A round at a pretty good valuation although your CAC was about to go through the roof and your churn was keeping you awake at night? Well, now is the time to break the news to your VC that your PMF is not where it should be and focus all your attention and resources on improving it within the next 9 months. Or your industry is just hit so hard, that you have to accept that currently there is no business to be made? One lightning example for the latter is the travel industry which is hit hard, or as GetYourGuide co-Founder and CEO Johannes Reck puts it: “It’s the biggest nuclear winter I’ve ever seen in online travel.” GetYourGuide, Omio and TravelPerk are all doubling down now on product and see the long term perspective. If that makes sense to your Startup, then maybe you want to check out the Product-Led Growth Summit on April 15th with some top tier speakers on the topic.
Price
Remember price elasticity? Maybe you want to look it up right now. Usually we are used to change and develop our product on a weekly if not daily basis. Not so much with pricing — we find it difficult to change prices or pricing strategies. Now is the perfect time to do exactly that. If you have strong indicators that you have a high PMF but struggle with User acquisition why not offering your product at a massive discount or even for free for the next 6 to 9 months with platforms like e.g. appsumo. You might not be losing a lot of revenue but acquiring tons of customers at a record low CAC. But don’t try to make a marketing stunt out of it connecting it in your messaging to Covid19. Only if you are sure, that you help those who need the help more than yourself.
Place
Did you experience channel conflicts or were unsure about the method of distribution you decided for initially? The current situation might be perfect to reassess your decision and potentially change it completely. We see and we will see dramatic changes in behavioural patterns in our society through the Covid19 crisis. Observe it like an anthropologist would do it and assess how that could impact the distribution of your products and services. Or as this post puts it: There are decades where nothing happens and weeks where decades happen.
Promotion
Most companies cut their media budgets to the bones, at the same time we see a surge in traffic on all major social media platforms and expect a drop in prices for reach due to the unprecedent drop in media spendings. A perfect time to strengthen your positioning and your brand relative to your competition. Maybe you feel like having the budget for it in times of boom, but making a difference now comes at a fraction of the price. And if you have a product that profits from the surge in the WFH revolution, like as Microsoft Teams, Zoom or Slack then think about increasing your media budget and learn from their recent $45m ads blitz. In the end we can be sure of one thing:
There’s more attention online than ever before. And it’s not going anywhere else for the next 6–18 months.
So maybe you’ll take the chance, because when this Covid19 is all over there are some brands to remember because they were spot on. As always:
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About the author
Dieter Rappold is a serial entrepreneur, angel investor and co-founder of Speedinvest Pirates, the growth Marketing part of the Speedinvest platform. He is an expert in digital marketing and growth with almost 20 years of experience in the industry. As a renowned keynote speaker in the field he holds several standing lectures at Universities for Digital Marketing, Social Media Marketing and Content Strategy.