Pricing is a sensitive subject because often talking about money is taboo, in some people’s eyes. However, you’ve to want to get paid and you’ve to want to talk about money if you’re going to run your own company. Once you’re comfortable talking about money then you’ve to honestly figure out the harder question of…
How Much Am I Going To Charge?
This isn’t as easy as it seems. Traditionally people said you should take your costs for the year and divide by 2,000 hours. The reason people said 2,000 hours was because it was assumed you’d take 2 weeks of vacation. Plus 50 weeks X 40 Hours/Week = 2,000 hours. Lets not forget that predicting your costs for the year is wildly inaccurate most of the time.
1. What happen if an emergency comes up?
2.What if you want to take 4 weeks vacation?
Plus by selling hours to your clients, means you can only make more money if you work more sells each year. This usually means you work more hours or you hire someone to help out. When that person is maxed on hours you start the vicious cycle all over again. A twist on selling hours is adding 10% or even 20% on top for profit. This can work but again you’re still limited by hours and you’re assuming you’ll bill 2,000 hours/year. Plus it incentivizes agencies to work as many hours as they can to max billable hours each month. There is no reason for them to be effective and then efficient with your account.
2016. There are more startups than money, talent or consumers can support or even VC money can fund. We’re reaching a point where the pendulum is swinging back in the other direction for startups to be profitable. I mean profitable beyond just on a cash flow bases. This should always be a goal from day one with your startup. Spending more money then you make to acquire a customer is a losing business model.
The question then becomes; how do you build a startup marketing engine to fuel your growth? Over the last 10 years I’ve worked around the world from Toronto to Sydney, Melbourne to London and now I’m back home in Canada giving Vancouver a run. One phrase that keeps coming up is how different I work then some of my colleagues in marketing over the last decade. I thought I’d share some of my thinking and how I work.
Answering how you fuel your growth can be the difference between being number one in your space and being dead last. Though you don’t have to be number one in your space to win. You could be number two or even carve out a niche focus within an industry that attracts customers to your brand. This isn’t a question of out spending your competition like Uber does because that’s not the reality of most startups in the world. Plus Uber is spending money to subsidies their customer’s purchases. Being number one or a leader in your space is a question of doing the following:
Focus Your Marketing
Position Your Brand
Foundation: Build That Basement
Customers: Know Them. Love Them
These are the areas in marketing that is going to separates A+ work that is going to shift your business from small startup to a rocket ship growth. Otherwise, you’ll have average or worse yet, mediocre marketing that most startups do and think they just have to outspend to win the war. Having my last startup, mopp.com, exit with an acquisition after I came on board after 9 month earlier is a testament to my process and data informed approach to marketing.
There are 3 traits I think every great marketer needs to have. They are courage, curiosity and hands-on experience.
A marketer in 2017 needs to have the courage to try something new, to be ok when an idea or campaign fails and not be afraid to champion an opposite point of view. They need to have the curiosity to ask why and dig into the data to see what happens. However, this curiosity also needs to extend externally and make them want to talk with customers and understand what makes them tick, what makes them buy and most of all what makes them happy.
A person can have some or all of the above but if they don’t have hands-on experience then it’s all for nothing. Being in the trenches and understanding how marketing fits into a company and how to use the tools to create a feedback loop for your work is key. Hands-on experience lets you understand why and not just what you’re doing. That lets anyone be more effective at their job and not just more efficient.
As 2016 winds down and many look forward to this year being done with. I think it’s time we remind ourselves that if we don’t remember how we got into the situation we are in. We are doomed to repeat history when the chance comes up again.
I thought a look back over 2016 was in order. What were some of my most viewed and “read” posts in 2016. I really tried to write less this year but spent more time trying to make each post of a higher quality.
Though I’ve not always achieved that. It was a better year for writing. However, lets look back at what my best posts were of 2016.
The Problem 2016. There are more startups than money, talent or consumers can support or even VC money can fund. We’re reaching a point where the pendulum is swinging back in the other direction for […]