The Two Types of Marketing

Welcome to my first newsletter! I must admit, I'm feeling a mix of nerves and excitement.

Today, we're going to delve into the exciting world of marketing and explore how to effectively promote your startup brand for long-term success. Are you ready to become a marketing pro?

The Two Types of Marketing

1. Performance Marketing

2. Brand Building

1 → Performance Marketing

Startups are often fixated on achieving short-term growth through efficient sales and marketing activities. They must do this quickly because they have a limited amount of investor capital to sustain them for a specific number of months.

To effectively implement Performance Marketing:

• Tap into existing demand

• Target a narrow audience, focusing only on those who are most likely to make a purchase immediately

• Communicate logically, highlighting product benefits, and promotional offers, and providing clear calls to action.

2 → Brand Building

Brand Building is equally important but opposite to the focus on Performance Marketing. Startups need to progress from initial stages to sustainable growth. Sustainable growth leads to long-term profitability, and that's where Brand Building plays a crucial role.

To successfully engage in Brand Building:

• Create future demand

• Target a broad audience, reaching as many people as possible who may have a future need for your product category

• Communicate emotionally, sharing the simple idea at the heart of your business in a way that evokes positive emotions.

High short-term growth is a very poor predictor of long-term success

The biggest mistake startups make is solely focusing on performance marketing while neglecting the creation of future demand and brand building. In almost every startup I have worked with, I had to advocate for a marketing budget dedicated to brand building. The issue is that performance marketing tends to be highly effective in the early years.

The startup launches a new product to solve a real customer problem in a unique way. They target a specific customer segment using cost-effective digital marketing strategies, leveraging Social Platform's impressive targeting capabilities. The initial results are impressive, with exponential growth achieved at a low cost. Venture capitalists and the media show interest. However, after around 3 years, the situation takes a turn. Acquiring new customers becomes more challenging and expensive. The ads lose their effectiveness, leading to slower growth and increasing cost per acquisition.

What happened? They skillfully converted all of that existing demand. They ran out of customers before they had done the critical job of creating future demand and focusing on Brand Building.

💡Takeaway → start focusing on brand building early on

If you enjoyed it, it would be greatly appreciated if you could share it with friends who might be interested in startup branding. 🙏🏼 💚

Next time, I will be sharing insights on "Startup Brands at Different Life Stages: What to Focus on."

Thank you,

Chris

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