I think I have probably caveated every article so far with “I’m not an expert”, so I asked one to join me. Chad West is the director of global marketing and communications at Revolut, which you’ve probably heard of (likely thanks to Chad) – need I say much more?
In this article we’re focusing on what a start-up can do at an early stage to get their product or service in-front of people in the right way.
The world of marketing can be a maze: it is vast and differentiated, but there are some core elements you should be constantly testing and optimising. Remember, different things work for different audiences and brands.
The core elements of the marketing mix manifest as the following:
You might have guessed from the title that these elements are rarely isolated but let’s dive into what each means. Chad has kindly supplemented throughout and has added some of his real-world experience later on.
Product
There are so many elements beyond just the service or product itself. For example, are there any ethical or moral considerations you need to account for? How are you holding/using people’s personal data?
The ‘product’ element also means understanding things like how often people are going to purchase or use your service, what additional value customers can get from your service, how it is packaged, what labels, warranties and guarantees you put on it and so on.
At ApTap we’ve tried to differentiate our brand from the rest, using a bright pink and blue colour scheme that cuts through the financial drab – inspiration for Revolut’s debit card? ;)
We abide by a customer centric philosophy but have spent a lot of time fleshing out what that means for other players in the value chain – sure we can make bill management easy for customers, but we also add value to banks and suppliers by driving user engagement and revenue?
Think about how you can instil an emotion in your target customer because that is truly what sticks. Ever thought “I’m never going there again” after poor service at a restaurant?
Price
Believe it or not pricing is of vital importance to your product/service offering… Ask yourself (and your customers) what kind of image your price portrays. Are you pricing for luxury or convenience? Here are some models and points that you might want to consider:
Who’s the target? Your pricing will differ drastically whether you’re targeting corporate clients or individuals.
What’s the customer lifetime value? A balance sheet focused approach, covering cost per customer via revenue per user and pricing accordingly, but make sure the customer is getting that value too!
Freemium, premium, subscription, cost plus, penetration… The list of pricing models goes on. There are some useful resources below to help you discern your best strategy, and specifically some notes on software as a service.
The number of customers who now pay for Revolut’s services increased 139% in 2019. By offering a solid core product, people got excited, and wanted more. Now Revolut is able to charge for premium features. This is an example of penetration pricing to build a user base, then development into a freemium/premium model, which should see Revolut break even in the not-so-distant future.
Place
How are you are going to reach your customers; distribution channels, geography etc.? Fundamentally this element is about distribution, which you can approach from a either or both of these angles:
Direct:
Going straight to your end consumer. This might mean you rent or own a shop or host an app in the app store that people can download or use. At ApTap we have a consumer facing app that allows us to test features and ideas and gather feedback. Revolut has been wildly successful here, while empowering users to go direct to other consumers – we’ll discuss this in the next section.
Indirect:
Using intermediaries or affiliates to sell your products or services. For example, at ApTap, we use banks as a distribution channel for our bill management services and in turn service suppliers like BT or British Gas use us to market their products.
At the end of the day you will need to test the best channels for your business. We decided that customer acquisition would be more sustainable from an indirect approach, rather than direct to consumer.
Promotion
This is what everyone thinks of when they hear “marketing”. Promotion is a loop of sender (you), receiver (customer) and feedback. Cutting through the noise can be incredibly difficult. Here are some examples of types of promotion in no particular order:
Advertising:
This could be online or offline, but it is generally an expensive technique and something I’d hold off on until you’ve proven product market fit and find some traction. You might find that doing a crowdfunding campaign after some initial traction can act as both a funding and marketing tool.
Public relations:
Really great for credibility and is built up often through social responsibility. At ApTap we are actively working towards partnerships with money and mental health advice services in the UK. Revolut has made it possible to donate to charities straight from your bank account!
Personal selling:
This is more pertinent for those selling services/products to businesses. There is so much to be said about sales – there will be another article focusing solely on this topic.
Product placement:
Pretty self-explanatory and not necessarily something a start-up can afford to do… Ever seen a coke can in a movie?
Sales promotion:
Be careful here about diluting your brand image with cheesy sales techniques. Putting on sales (i.e. 15% off for bank holiday weekend) can deter customers from purchasing regularly, while they wait for you to put on your next sale.
Word of mouth:
People talk, and if they’re talking about your product negatively or positively it will impact your promotion drastically. Included in this are network effects. Perhaps keep track of your Net Promoter Score to see how you’re doing?
Word of mouth is incredibly powerful. Chad talks about how they approached marketing via their community:
Community marketing is so underrated. Here are some things we did at Revolut which helped us scale to 5 million customers organically:
- Craft a human, friendly and transparent tone of voice, and apply it across all your customer communication.
- Host regular meet-ups with your customers, show them what’s coming up, ask them for their feedback.
- Let customers see your product roadmap. Let them help prioritise what you build, what you name things.
- Ask your customers what they want to learn about your industry and apply to your content/social strategy.
- Turn customers into lifelong brand ambassadors. Let them own a small slice of the pie via crowdfunding.
- Avoid burning cash on ads. Remember your customers are your biggest marketing channel.
In summary
It’s all about finding what works for you. As in everything start up related – keep testing! Try techniques that won’t see you burn cash, as you can start to commit capital to marketing efforts when you get a better idea of what actually works.
Take a look at what similar businesses are doing, devise what is and isn’t working for them, and see if you can do it differently. Remember the reduce, raise, eliminate, create matrix from the last article?
You can learn more about Revolut at https://www.revolut.com/