Marketing is a lot of companies’ go-to method for fueling business growth.
There are situations where hiking your marketing budget is appropriate. If you’ve got a great product, strong product-market fit, an excellent customer success team, and a good understanding of your demand cycle, marketing dollars can and should be deployed.
But if you lack any of those things—especially a great, differentiated product—making a huge marketing investment is little more than putting lipstick on a pig.
No matter who you might fool in the short-term, no amount of marketing can save a substandard product.
There are several key boxes to check before you make a substantial marketing investment. And if you do, you’ll set your company up for much more sustainable growth than if you try to supercharge a product that isn’t ready.
What to do before you make a substantial marketing investment
- Start with a quality product. This should go without saying, but the best way to grow your business is to have a product that: a) Solves a real consumer need and b) Has a competitive price point. The truth is, when great products fall into the hands of people who need them, they tend to sell themselves.
A great example of this was AWS. AWS offered public cloud services at a price point that was orders of magnitude lower than what it took to provision physical servers. Startups were early adopters, and their enthusiasm made it so that AWS, which started with no sales team, could catch fire.
The last piece of this is a strong customer service team—a team that enables your customers to get the most possible value out of your product.
- Plan for sustainable margins—as early as possible. I think people got spoiled by the easy-liquidity environment that we all experienced for the last decade-plus. It made it seem like profit was an afterthought, that growth was the first and last priority, that margins would figure themselves out.
It’s never too early to think about margins. The less you do, the more you’ll be blindsided by the costs of scaling. It’s very uncommon that bad margins at Series A have suddenly become comfortable margins by Series D.
- Pick your partners wisely. Early in my company’s life, I decided to engage a PR firm. My first instinct was to go for the sexiest names—New York and Los Angeles firms that everyone had heard of and everyone wanted to work with.
This couldn’t have been more misguided. We weren’t a big customer, meaning we weren’t a top priority for them. Several huge invoices later, we hadn’t gotten anything like the results we expected.
Switching to a smaller, boutique firm was a completely different story. Results came, at probably a third of the cost of the giant firms.
The same goes for investors, distribution partners, or anyone else who’s with you for the development of your business. Find partners whose values align with yours, who have intimate knowledge about your demographic, and who are going to treat you like a VIP.
- Spend into your strengths. I’ve written before about how my company saves its marketing dollars for the more demand-heavy times of year. For us, that’s the beginning of the school year and the holiday season, when people are thinking about ways to hydrate themselves sustainably (or give gifts that make it possible for others).
We also know that Q1 is a pretty slow time for us, and so we don’t engage in heavy marketing activities then. We use that time to strategize over how to make the most of the rest of the year.
All of what I’m saying gets back to sound fundamentals. Start with quality, prudence, and strong partnerships, and only then start fanning the flames.