[ad_1]
According to the U.S. Bureau of Labor Statistics, 2 out of 10 new businesses close in the first year of operation, and 9 out of 10 startups fail (Startup Genome data). Despite entrepreneurs’ colossal motivation and a strong urge to make a great product, they often make mistakes that could have been avoided.
CEO & Founder of Refocus, Roman Kumar Vyas, will tell you about the most common mistakes that every marketer and entrepreneur should avoid.
#1 Not Understanding the Market
You came up with a new product and decided to launch it on the market right away. At the same time, you have no idea of the market needs and your target market. If the market is declining, your project has a chance to go down at the start.
EXAMPLE: The launch of a mobile-video platform, Quibi, was a big failure, despite high expectations and impressive investments. Between Warner Bros, Lionsgate, MGM, and more investors, the streaming platform has raised around $1.8 billion overall.
In addition, the company was managed by the magnate and former chairman of Walt Disney Studios, Jeffrey Katzenberg. With those resources came great promises to rock the market for streaming television. Quibi wanted to compete with TikTok, YouTube, and other popular services.
How could Quibi fail? A complete misunderstanding of their consumers and the trends of the market.
- The quality of films and T.V. series was inferior to competitors — Quibi accepted projects that HBO or Netflix did not accept.
- According to Sensor Tower, the app has been downloaded 4.5 million times, but 92% of users refused to renew their subscription after the trial period. Among the reasons for the refusal were the quantity of content and the high cost. Quibi has asked for $8 per month with 175 shows in the first year of launch, whereas Netflix offers for $9 about 2,000 films and 3,800 TV series.
- Quibi was advertised during the Oscar broadcast. But the viewers’ average age hits 56 years old and over. Moreover, instead of advertising shows, Quibi promoted the platform itself. 70% of the surveyed Oscar and Super Bowl viewers thought Quibi was a food delivery service.
ANSWER: Ways to avoid this mistake:
- Conduct market research — market volume and total addressable market (TAM). Explore assessments of different players, read, research, and consult market experts.
- Identify if the market is growing or not. If it’s growing, then at what pace? Study the data for 3-5 years and the forecast for 2-5 years.
- Study industry trends and market preferences. Watch for new products and solutions like food delivery aggregators, sports services, or how your target market reacts to these trends.
- Do a competitive analysis. (i.e., how many companies there are, how long they have been on the market, and what their market segment is)
#2 Failing To Understand Your Audience
Have you launched an ad campaign, but no one clicks on the banners? Most likely, there is an issue with defining the audience and communication.
EXAMPLE: When the Refocus team launched its marketing agency, they promoted the product on the U.K. market — the installment card. [credit card.] “With no doubt, we decided that the product would be most in-demand among girls, simply because they love shopping and often make expensive purchases. It was a big failure, so we lost hundreds of thousands of pounds [dollars] in the ad campaign.”
“Realizing our mistake, we decided to do a deep research — CustDev. It turned out that the most relevant audience segment is men 35-45 years old. So, unfortunately, we spent a lot of money and time running irrelevant ads.”
Marketing should be flexible: if you understand that something goes wrong, you should find a solution and change the situation ASAP.
ANSWER — Ways to avoid this mistake:
- Interview clients using the JTBD methodology (the essence: the client hires a product to do some work). You need to find 7-9 respondents from each audience segment for a representative sample.
- Analyze the received data and look for standard and repetitive phrases.
- The data about JOBS, will be the basis of meanings for creatives (banners, videos) and landing pages.
- One of the critical tasks of CustDev is to understand the client’s pains and JOBS. If you stop for a moment and adjust communication, you can increase your profitability. This is logical because the product is made for the client; no one will tell you how to satisfy the client’s needs better than them.
Recommendations:
- The Mom Test by Rob Fitzpatrick.
- Lean Customer Development by Cindy Alvarez.
#3 You Don’t Follow the Trend in Creatives
Marketing changes all the time. So you need to keep an eye on trends and develop your creativity. Your creatives should be eye-catchy; otherwise, you will lose all your budget with no profit.
ANSWER: Ways to avoid this mistake:
- Follow the trends regularly. For example, unpacking videos are the most popular and have the best C.R. You are familiar with this type of video when a happy customer unpacks the product and explains why it is needed. Another popular format is production video, where customers can see the stages of production. The CEO videos of executives discussing their products and product review videos from ordinary customers are also trustworthy and effective.
- Explain the JOBS of the product in the first 3 seconds. In this case, you will draw your customer’s attention.
- If your ads put users to sleep, don’t expect them to click. Your creatives must break banner blindness and have a bright design.
EXAMPLE: Hoof Doctor provides hoof care and farrier products for horses. The company launched the ad campaign with a product review video from its customers. In this video, the man spoke about the advantages of the product and his experience. It wasn’t a scripted video. Instead, it was spontaneous with an imperfect speech from a real customer who bought the product. This video increased the level of trust among the target audience.
#4 You Don’t Have an Elaborated Sales Funnel
You can have great marketing, but it’s pointless if your sales funnel isn’t so great. A poorly elaborated sales funnel leads to money wasted. What could go wrong? For example, a client opens a website, sees it’s not mobile-friendly, and the call to action (CTA) button isn’t working.
How often have you left a request or feedback on a website but never got an answer?
ANSWER: Ways to avoid this mistake:
- It’s better to adjust the analytics in every sales funnel stage and control all the data in real-time. It’s crucial to understand how people move from every stage and then go away. Your goal is to optimize the sales funnel as much as possible. For better user experience — make your website mobile-friendly. The lead form should be convenient and easy to load. Otherwise, customers will choose your competitors.
- Add triggers in potentially weak stages. Work on the trigger strategy — set up push notifications or emails so that users don’t leave if you can’t fix the funnel quickly.
#5 Forgetting the Importance of Analytics
One of the most serious and expensive mistakes entrepreneurs and marketers make is the lack of a system for collecting and analyzing data on marketing effectiveness. As a result, you can’t manage what you can’t measure.
ANSWER: Ways to avoid this mistake:
- Every digital project should start from analytics. You should measure Conversion Rate (C.R.), Click-Through Rate (CTR), Cost per Click (CPC), and other essential marketing metrics.
- Control the sales data: use Customer Relationship Management (CRM) properly, and enable call tracking.
- Use the system of end-to-end analytics — it’s a data combination of all steps from the banner to repeated purchases in CRM. For example, knowing which ad channel or ad campaign converts money better is necessary.
EXAMPLE: The online store of German premium cosmetics, Phyris, initially chose cosmetologists as the main segment of the target audience. The company focused on communication on the texture and the effect of creams — functional JOBS. The conversion rate was very low.
After getting CustDev, they realized that their customers pay a lot of attention to cosmetics packaging. Owners of Phyris didn’t expect that having a beautiful cream in the bathroom is essential for their audience.
When a guest sees aesthetic jars in the bathroom, they think that the person who uses them is in another league. The social JOB turned out to be more important than the functional one.
So they began to use images of jars in premium interiors in ad creatives and add better infographics on the product card. The advertising campaign paid off perfectly, and the company received several million. The conversion rate increased four times.
Understand Motivation — Learn from your mistakes.
In his book Business The Speed Of Thought, Bill Gates wrote: “Learning from mistakes and constantly improving products is a key in all successful companies.”
Don’t be afraid of mistakes — they happen to everybody. If something is wrong with marketing — dig deeper, find the problem and fix it.
You don’t have to wait until all the budget is wasted and gone, and it’s too late to make a difference.
Image Credit: Internal article photos provided by the author. Thank you!
Top Image Credit: by Alena Darmel; Pexels; Thank you!
Source link