Is now the best time to increase your startup’s marketing budget?

Many startup executives believe that the more money they put into their marketing budgets, the faster they will gain traction. For B2B businesses, however, nothing could be further from the truth.

A 2021 CB Insights study found that nearly 4 in 10 organizations hit rock bottom because they exceeded their budget track or were unable to raise new funds. Spending too much too soon on marketing can lead to both of these problems.

B2B marketing differs from B2C marketing because it is usually more involved, requiring a dedicated sales team to close deals. You can’t just throw a bunch of marketing on the wall to see what sticks, you need to work closely with your sales team to listen and learn from customers.

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The Consequences of Overspending

It can be tempting to scale your business from the start with flashy awareness campaigns. But until you’ve done the work to find out what your sales team needs, fully understand your customers, perfect your product, and craft your message? Marketing can be a losing proposition in B2B.
For starters, you might end up saying the wrong thing to the wrong people because you haven’t listened to consumers long enough. It doesn’t make sense to get on a megaphone with the wrong message.

Even if you say good things, your product may not be ready to deliver the results you promise. Customers will be unhappy and share their experiences with others. You’ll end up spinning the wheels trying to earn back a solid brand reputation.

Premature commercialization can also present problems in raising capital. Let’s say you put tons of money into marketing and you only get 10 clients. Your customer acquisition cost will be exorbitant, which investors will not appreciate.

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Spend your marketing budget in the early stages

My company, a B2B SaaS provider, spent a lot of time strategizing before I really started fueling the marketing fire. We aligned sales and marketing from the start to refine our target audience and find out what customers needed. Then we expanded our verticals, developed industry partnerships to build credibility, and even merged with another company to expand our product capabilities. Now our product and our team are ready to successfully manage our marketing outcome.

Assess your readiness with the following questions:

Have you refined your message?

Focus on customer pain points and how your product or service solves them. You’ll have to spend time and money on audience research, but it’s better than wasting money on posts that don’t resonate.

My company saw the opportunity to fill a gap for our target market and targeted messaging around it. Our social media management software is intended for regulated industries, such as financial services and insurance, which must meet regulatory guidelines for electronic communications. One of the biggest problems in these industries is that most social media management software companies design their products for mainstream brands or small businesses. Regulated industries can’t rely on these tools to help them stay compliant, so we’ve built compliance checks into our platform and highlighted our purpose-built policy in our messaging.

Remember that you may need send your message up to a dozen times for it to ring. Sales will be key to establishing the core of satisfied customers you’ll need to build your credibility and reputation for future growth.

Is your product ready?

For many B2B startups, like those in SaaS, data can give you an accurate picture of how customers are using your product and where to improve. Make sure your offer can effectively solve customer problems before spreading marketing messages promising how it will help them.

Teamwork management tool Asana identifies “engagement” as one of its key benefits for customers. To save this message in its product, the company focuses on product research to measure how customers interact with the tool. One of the ways Asana collects feedback is through its “Voice of the Customer” program, which involves surveying customers about their satisfaction with the tool over time.

Ask, listen and improve over time.

Is your team ready?

Customers are increasingly demanding that their suppliers have the internal resources and framework necessary to chart a course for success. It’s no wonder Emerging LinkedIn Jobs in 2020 report found that customer success specialists are one of the fastest growing positions.

Your first job as a startup leader is to build a solid product and a scalable business, not to develop a marketing agency. Play it safe with your startup budget until you can tick all the boxes above. Work closely with your sales team as you research, listen, test and improve—THEN intensify your marketing efforts.

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