7 Critical Marketing Mistakes New Entrepreneurs Make

7 Critical Marketing Mistakes New Entrepreneurs Make

Research from Gallup shows that 400,000 new businesses are born in America every year. While this sounds impressive, it won't after you find out that 470,000 businesses die every year. Available data shows that about 50 percent of businesses fail within their first five years. Many more fail over time.

When entrepreneurs start a business, the excitement is high and the initial passion makes it look like things will be good forever; however, there are many factors that play a role in the success of a business taking off.

Marketing is perhaps the most important factor that determines the success of a business; real business marketing goes beyond the simplistic view of marketing most people have, and the following critical marketing mistakes have caused the death of many businesses.

1. Not Having an Email Strategy

The statement “the money is in the list” isn’t just cliche. It is a proven fact.

When you take a look at the most successful online startups in the world today, you will start to notice a trend: most of them start by capturing the email addresses of their users, and many still do email marketing well. In fact, e-commerce giant Amazon is renowned for its sophisticated approach to email that contributes a great deal to its revenue.

A Monetate study analyzed over 500 million shopping experiences to see how different traffic sources convert. The findings of the study were revealing! Email converted more than search and social media combined, consistently.

Email had an average conversion rate of 3.19 percent while search and social media had an average conversion rate of 1.95 percent and 0.71 percent respectively. Email also rivaled search, and overwhelmingly outperformed social media as a source of traffic.

The findings of the Monetate study was further bolstered by research from the Direct Marketing Association, which found you can expect a ROI of $38 for every $1 spent on email marketing.

That said, the key to successfully marketing your company and boosting sales through email goes beyond simply building an email list and clicking send every time you have something to say; the key to making email work is to master the art of effective segmentation.

According to Marketing Sherpa, using a targeted email marketing approach will yield a 208 percent higher conversion rate compared to the “batch-and-blast” approach that most businesses use. Instead of sending the same email to everybody, segment your email list by user interest, age, location, gender and other relevant factors to ensure you’re able to send only the most relevant email to people on your list.

2. Not Using the Familiarity Principle 

One of the earliest, most notable case studies that prove the effectiveness of the “mere exposure effect” (also known as the “familiarity principle”) was an experiment conducted by Oregon State University professor Charles Goetzinger in 1968; Goetzinger had a student dressed in a large black bag, with only his feet visible, come to his class every day; he then observed the reaction of other students to this weird “black bag.” As expected, most of his students initially treated the black bag with hostility, but the more they were exposed to the bag the more curious they became about the bag.

As exposure to the bag increased, the students eventually developed likability for the bag. The experiment proved that with constant exposure we could come to like something we initially disliked or ignored.

In a 2008 study published by ScienceDaily, titled “Effects of Unconscious Exposure to Advertisements,” it was revealed that we are influenced to a great extent by our consistent exposure to certain products and brands, even without being aware of this exposure. When you see your favorite actor use a particular product, you tune in to the TV to see the same product advertised, and then you went online and found the very same product advertised, you gradually, subconsciously, start to develop a liking for that product. This is the familiarity principle in action, and new entrepreneurs that ignore it do so at their own peril.

When nobody knows about you or your products, it becomes even more important to use the familiarity principle — ensure that potential users get constantly exposed to your brand until they can no longer forget it. If you’re building it and expecting them to come, well they won’t. You need to get the message out about your brand and products, and not just in one channel; use as many mediums as possible, paid and free, to introduce your products to your target market repeatedly. This will result in likability for your brand and eventually sales.

3. Not Having an Outreach Strategy

Every major startup today got big due to constant exposure in the media; if you can’t get the media to cover you yet, you can write for major publication as a thought leader and link back to your site. This is called guest blogging, and it can be used to capture the attention of influencers and key users in your industry.

Social media startup Buffer started with what they felt was a really good product and no users; in an attempt to get themselves in the media and get their first set of users, Buffer had an outreach strategy that involved two key things:

  • Guest blogging: If you’re a startup with no users, it can be difficult to get influencers to notice you. How then do you get the initial traction you desperately need without waiting too long to be discovered? Buffer solved the initial attention problem with guest blogging. By writing guest posts for some of the biggest blogs in its niche, Buffer was able to get its first 100,000 users within 9 months. If you run an online business, look for major blogs and publications that you can write a guest post for; while top publications might not easily do a story about you, most will happily accept free content from you. In return, you can mention your business in your article and/or bio.
  • Reaching out to “unestablished” journalists: Many new entrepreneurs make the mistake of trying to get the same superstar journalists that covered their favorite startups to cover them, and the result is often no media coverage at all. These big journalists get a lot of pitches every day, and they can only feature a fraction of the startups that pitch them. Instead of focusing on the heavyweight journalists that will most likely ignore them, Buffer started by pitching to unestablished journalists. You can employ a similar strategy for your business; these journalists could be interns or new journalists. While they don’t necessarily have the same clout as superstar journalists, they often have access to the same platforms, get fewer pitches and are more likely to cover you. Once you get covered by a few of these, it becomes easier to get the bigwigs to notice you.

4. Not Having a Blogging Strategy

According to statistics from Hubspot, businesses that blog get 67 percent more leads and 97 percent more links than businesses that do not blog. That must mean that as a new business it’s a good idea to simply start a blog and start updating it, right? It’s not that simple: Your blog will be another time (and possibly money) sink without a solid blogging strategy. Here are some tips to help you develop a blogging strategy.

  • Ensure there is a link between your blog and business: Your blog shouldn’t be a means to tell your story or just write articles because “everybody should be blogging” or because “the statistics say that blogging works.” It should be a way to get people to discover your business and products. This is only possible if there’s a connection between your blog and the products/services you offer; make sure that there’s a link to check out your products throughout your blog; this should be in your blog navigation bar, inside your blog posts, in your sidebar, in key pages and in other strategic places. The more avenue people have to discover your products through your blog the better.
  • Ensure relevancy between your blog and business: If you run a business blog, you can’t just blog about anything and everything. Your blog needs to address the problems existing customers and prospective customers have; give them a solution to their problems and it will be easy to get them to use your services.
  • Quantity is just as important as quality: Statistics show that the best blogging frequency involves publishing 16 or more blog posts in a month; according to Hubspot, businesses that publish more than 16 blog posts a month generate up to four times the traffic and leads as businesses that blog less than 4 times a month.

5. Trying to Market to Everyone 

If your answer to the question of who your target audience is “everyone,” you’re essentially targeting no one — and you’re most likely on a path to failure. Every major business had to start with a small subset of people — with a specific, targeted audience — before eventually becoming big.

Don’t make the mistake of marketing to everyone; while big brands might get away with it, it won’t work for startups. Instead, start by defining your Unique Selling Proposition, create an audience profile and actively pursue your target audience.

6. Making Assumptions and Not Testing 

Trying to market without testing is akin to running a business without accounting — you only assume that something is working or not, and assumptions are often wrong. This will only lead to failure.

Research shows that a whopping 84 percent of businesses are not tracking ROI from their social media marketing efforts.

It’s easy to assume that something is working when it is not working; new marketing techniques and platforms will pop up every day, but you only know what works when you test. Pretty much every analytics tool today will allow you to track where your customers are coming from, and they will allow you to set up goals and conversion tracking. If you do a lot of advertising, most ad networks will allow you to keep track of how customers are converting on your site with tracking pixels or UTM codes. Make use of these features to get the best bang for your buck.

7. Ignoring Existing Customers

Many new entrepreneurs assume that the work is done once as they get customers to use their products; it isn’t. In fact, the work has just begun! Research shows that loyal customers are worth up to 10 times as much as their first purchase, and you have up to a 70 percent probability of selling to an existing customer compared to up to 20 percent for a new prospect.

A customer you already have is worth several times more than a customer you don’t have yet, and perhaps one of the best marketing decisions you will make is to start paying more attention to existing customers; first, these customers have already bought from you so it is not hard to get them to buy more. Second, these customers — if very pleased with their experience with your brand — can end up being brand evangelists for your business. Ignore them at your own peril.