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Lean Marketing: The Tool That May Save Your Startup Thousands of Dollars and Failed Marketing Campaigns

Lean Marketing: The Tool That May Save Your Startup Thousands of Dollars and Failed Marketing Campaigns

What is Lean Marketing?

Based on manufacturing principles first applied by the Toyota Motor Corporation and later refined by entrepreneur and author Eric Reis, the lean process is fundamentally about using data, iteration, and validation to shorten product development cycles and see quick results while maintaining a high degree of flexibility. In a startup context, the bottom line is that lean methodology provides a way to rapidly tweak strategies to adapt to changing trends and conditions while maximizing efficiency, minimizing waste, and creating measurable customer value, even for small teams struggling on a shoestring budget.

At its heart, the lean methodology is about forming hypotheses, performing experiments to test them, and then deciding whether to continue with the current course of action or pivot to something else entirely. Operating in a lean mindset means accepting that change is both inevitable and necessary to success – instead of investing enormous amounts of time and resources into a marketing campaign and hoping for the best, the lean framework provides a way to reduce risk by emphasizing analytics, adaptive learning, and iteration. It seems like corporations have already figured this out and have saved themselves billions of dollars in the process. Startups, on the other hand, are still lagging behind and are making unnecessary and costly mistakes that lead them to continue dying off. The old way of doing things just simply isn’t going to lead to longevity for a startup or small company.

For a glimpse of successful lean marketing methodology in action, one needs to look no further than Basecamp, a web development startup that bootstrapped its way from a four-person team with virtually no startup capital to a company that is currently valued at over $100 billion. From the beginning, Basecamp incorporated lean principles into virtually every facet of their business. Instead of a complicated site full of testimonials, ad copy, and portfolio examples, the original Basecamp website simply detailed what services were offered. The team turned down hundreds of offers from venture capitalists, preferring to stretch their budget to the limit by using customer feedback to make data-driven decisions that allowed them to bring a viable, profitable product to the market as quickly as possible. The team of four people grew at a glacially slow pace, hiring only when absolutely necessary in order to preserve an intimate and efficient environment, and unconventional choices, such as eliminating all non-essential meetings, allowed them to maintain a higher level of productivity than competitors with larger workforces.

Lean Marketing

What Sets Lean Marketing Apart?

One of the most valuable and creative ways you can use lean methodology to power your startup’s growth is with lean marketing. While traditional marketing and lean marketing strategies might share the same general end goal, the processes involved in reaching that point couldn’t be more different. Speed and adaptability are cornerstones of the lean marketing methodology, and this approach can be seen at every stage of the campaign.

Traditional marketing often utilizes cumbersome, task-based waterfall timelines that often fail to keep up with the rapid pace of change that defines modern marketing, creating situations where a campaign is unable to change course and react to new market conditions until it is already too late. In contrast, lean marketing relies on the use of small trial campaigns to constantly evaluate what is and isn’t working so that campaigns can be continuously improved through swift and data-driven changes. Lean marketing breaks large deliverables into smaller mini-projects and aims for a timeline of weeks, rather than months, between concept and delivery.

A similar approach can be seen in how lean marketing principles are applied to the testing phase. Traditional marketing is risk-averse, involving layers of approvals and decisions, creating an environment that stifles experimentation and dramatically slows down the testing process. Conversely, lean marketing treats failure as an inherent part of the process and an opportunity to learn, encouraging experimentation through a rapid cycle of “test, learn, iterate” that quickly identifies best practices through data-driven trial and error with a strong emphasis on customer feedback. Not only that, but startups and small businesses can make especially good use of lean principles by leveraging free tools for those tests, such as by surveying customers through SurveyMonkey or Qualtrics or by doing simple A/B testing via a combination of Google AdWords and Google Analytics.

One of the most notable advantages of lean marketing is the extremely low barrier to entry, which makes it especially attractive to startups running on a tight budget or without a large audience to leverage. A cornerstone of lean startup strategy is the concept of the MVP, or minimum viable product—in simple terms, a stripped-down product (often little more than a landing page, static website, or proof of concept) that can be offered to customers to observe how they respond to it and whether they would actually spend money on it.

A perfect example of the MVP process can be seen in Buffer, a small startup that aimed to create an application to schedule and automate Twitter posts. Buffer’s MVP consisted of a page with merely three bullet points outlining how the service worked, and a second page with a mailing list sign-up and a notice that the app was still in development. After distributing those pages through social media platforms and confirming that potential customers were interested in the app, the team at Buffer took the next step by adding an additional page with some clickable pricing plans to gauge how many people would actually be willing to spend money on the service. Using the positive data gathered by this extremely fast and inexpensive MVP test, Buffer immediately began putting together the actual, functional product, taking the startup from nothing more than an idea to an actual product with paying customers in only seven weeks.

To get a more practical understanding of how all of these differences come into play, let’s imagine a scenario:

Two startups—one using traditional marketing methods and one using lean marketing methods—come up with an idea for similar apps that include features A, B, and C. The traditional marketing team uses their meager budget to run a cost-efficient “fire and forget” campaign focused on raising brand and product awareness, confident that demand will be high for their app and that customers will be happy to pay the $15 monthly subscription cost they settled on in a meeting. But once the app reaches the market, customer reviews reveal that people find the app overly complex and that they don’t feel like they’re getting their money’s worth from it. At this point, it’s too late for the start-up to change direction—the only hope is to use that feedback to revamp the app’s features, lower the price point, and spend more of their marketing budget to promote the discount, all the while hoping that potential customers aren’t scared off by the initial spate of poor reviews.

But let’s look at how the lean startup in this scenario would handle things. First, the team would create their MVP – in this case, probably nothing more complex than a landing page describing the app and its features. Next, they use free survey tools to distribute that MVP to potential customers and measure their feedback. Some simple A/B testing would reveal that while customers love feature A, features B and C add unnecessary complexity without adding enough value to make up for it. With this information in mind, the lean startup goes back to the drawing board, cuts features B and C, and comes back with an app that is laser-focused on the feature customers loved. Further free A/B testing would reveal that the initial $15 price point the team settled on was just a bit too high – the sweet spot for customers who responded to the survey was $12, and the team adjusts the price accordingly. On launch day, the app is released, and as iterative testing revealed, customer demand exists and the price is right.

This scenario illustrates exactly how lean marketing sets itself apart from traditional methods, and why it’s an especially suitable framework for startups and small businesses. The end result is a better product with high customer value, delivered to the market as quickly as possible and at a fraction of the marketing cost.

What Are the Benefits of a Lean Startup?

Now that we know what lean marketing is and how it functions differently from a more traditional marketing strategy, let’s look at the elevator pitch for why every startup and small business should be seriously considering making the switch:

  • Increased Productivity

The lean methodology provides an easier way to evaluate and manage changing priorities while simultaneously streamlining business processes to allow more time for strategic decision-making. At the team level, lean-based tools can improve project visualization, promote cross-collaboration and stronger communication, and reduce the time spent in meetings. All of these factors contribute to a significantly higher level of productivity compared to traditional marketing methodologies, especially when working with smaller, tight-knit teams.

  • Faster Time-to-Market

Lean marketing relies on short, iterative release cycles, rapid-fire testing, and flexible plans. In practical terms, this means that any problems that crop up are identified quickly and can be dealt with through small corrections rather than complete overhauls. Combined with regular customer-focused testing to identify wants and needs, the lean methodology drastically cuts down on overall time-to-market.

  • Stronger Customer Focus

Traditional marketing strategies often begin with an end product already in mind, and as a result, there is often little emphasis put on the customer until the product is ready to launch. In contrast, lean marketing emphasizes a customer focus throughout the entire process, relying on feedback from tests and trial campaigns to make adjustments to the product that maximize engagement and customer value.

  • Better Feedback

Rather than investing time and resources into a campaign and waiting until the launch date to measure performance, lean marketing allows teams to run smaller experiments to test theories and assumptions and collect customer feedback on a timeline of weeks or months. The key to lean marketing is measurable data, and this feedback allows lean marketers to react to changing conditions, trends, or customer needs in real-time, providing an enormous strategic advantage over slower, traditional feedback models.

  • Less Waste

A central tenet of the lean philosophy is the identification and elimination of waste in order to improve efficiency and create additional value. Lean processes are designed to cut down on much of the waste that accompanies traditional marketing strategies, ranging from overly long marketing funnels and unnecessary meetings to poor brand communication and lack of organizational flexibility. Less waste means more time and money to devote to what matters.

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