Competitive Advantage Outcomes

3 Things Startups Focus On as VC Funding Shifts

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As uncertainty rises, funding falls. At least that’s what the news would have you believe. But according to Inc. magazine, seed and angel deals are still trending upward, and early-stage companies with proven product are still getting most of the deals. In fact, 64% of venture funding is early stage, and seed deals through Q2 of 2022 were on par with the entirety of 2019 (Q2 NVCA/PitchBook). That means for hyper-growth or ambitious companies and challenger brands, there is still an opportunity for you. So what should you do when VC funding is down and inflation is still driving uncertainty? I’ve been through every recession since 9/11 and I’ve been working with ambitious brands and companies since then as well. So I’ve seen what successful businesses do during recessions to position themselves for competitive advantage, survival and growth, despite the economic hurdles. Over the years I’ve noticed, startups who focus on looking ahead while being laser-focused, and tend to survive tumultuous times, regardless of whether your a consumer brand or a B2B company.

Focus Your Energies and Budget

“Everything you do, do exceptionally well, and if you aren’t exceptional at it, then get rid of it or outsource it.”

Look at everything you’re doing and cut out the things you aren’t doing well. For example, let’s say your internal biz development team is excellent, but your event marketing isn’t producing the results you’d hoped for, take that event marketing budget and focus it on one thing your biz dev team says they need to get to the next level.

Everything you do, do exceptionally well, and if you aren’t exceptional at it, then get rid of it or outsource it. Outsourcing is just more nimble. What you outsource, be exceptionally clear about your goals, so you can maximize your reduced budget. Focusing your time and budget has the additional advantage of clearing out the cobwebs and giving you new insight into operational efficiencies too. Who knows? You might decide that outsourcing certain strategies, like PR, simply works better than doing it in-house, anyway.

Startups should also focus on the long term. Think about ways you can increase efficiencies with agency partners, and where you can maximize the partners you have on board.

 

Bullish on the Future

“Deals are still happening, but they’re more happening on industries and trends which are moving ahead full steam, no matter what happens to the economy,”

What should a startup focus on when thinking about funding? No matter what happens to the economy, innovation rolls forward, and VCs know this. The money isn’t on solving today’s problems, it’s on solving tomorrow’s problems. According to Pitchbook, in Q1 of 2022, VC’s raised more money than in the entirety of 2019. So are coming down? Oh, absolutely, but VC’s know – the future is now.

Even when funding is down, deals are still happening, but they’re more happening on industries and trends which are moving ahead full steam. So do your homework on where your product fits into the biggest challenges or opportunities in the next 5, 10, 15 years. Look at all the challenges the pandemic brought to light – those challenges are still top of mind, and the companies solving those problems will have a head start. Your corporate storytelling should also lean into the future and purpose driven initiatives. These two aspects will allow you to lead against your peers.

FinTech is another area where the gloom and doom may be over-reported – through Q2, FinTech funding was still more than in 2019, but it’s definitely not as frothy as 2021. FinTech founders may wish to focus on thought leadership and tie it into purpose-driven points of view in order to tap into future trends.

And although the cannabis industry has been experiencing its share of disruptions as of late, no one thinks that industry is disappearing, the growth is only projected to increase as more states move to legalize cannabis, and states create interstate sales as California has, and many expect the east coast to do. Experts predict the cannabis industry will be $100 billion by the end of the decade. You can learn a lot about the future of cannabis by reviewing the pitch decks from startups that recently secured funding.

Plan For Success

“Companies that survive this time focus… on problem-solving,”

Now is the time to think out loud and do your due diligence for tomorrow. Companies that survive this time focus their operations team on problem-solving. For example, if  VC funding doesn’t seem likely for you right now, turn your attention to policy initiatives at the federal and local levels. For example, the last infrastructure project had a lot of opportunities for climate-related startups. And the 2021 infrastructure package held lots of tidbits for infrastructure tech programs, that emerging industries like drones and UOV could take advantage of.

Consumer tech VC funding has taken a sharp nose-dive. Storytelling PR campaigns may not be as attractive as they once were for consumer tech. Now is the time to look at product-based programs which increase awareness but not the budget.

Mental health is still top of mind, that’s part of the reason emerging industries like healthtech, cannabis, and psychedelic treatments remain in the sights of investors. But these industries are not without their challenges and competitors. So brands in these emerging industries need to double down on trust to build more acceptance for the communities they serve.

Direct to Consumer (DTC) funding has radically pulled back, because simply having a DTC company isn’t in itself enough to attract investment – today, a DTC strategy is an expectation. But startups can take this time to develop something that can’t easily be replicated, like technology. Or, as investor Caitlin Strandberg said, don’t even ask for investment unless you have an Amazon strategy, because social media isn’t where they see buyers, “if you’re going to be where people buy—people are buying more and more on Amazon—you can expect they’ll search your brand name on Amazon, and you want to be on that search page,” so be looking your sales channels along with SEO and digital PR so your startup is poised for growth.

One of the best ways to stay focused on success is to lay the groundwork for a successful IPO. There is a lot to do, both internally and externally, and getting started earlier will save you money and time as the exit gets closer.

You should take this opportunity to do some scenario planning as well. Now is a great time to plan for a crisis, and create plans for things like cyber breaches ,which will help you secure your future.

 

Tomorrow’s greatest companies and emerging industries aren’t going to allow this uncertainty to derail them. This is where the rubber meets the road, and strategy makes a difference.

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What is a Purpose Driven Strategy

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What is a Purpose-driven strategy? It’s the natural evolution of four converging cultural changes; the first is when social, cultural, and environmental issues became more visible and urgent, followed by consumers who expect brands to connect with nonprofits or social impact, driven by a lack of confidence in government to solve big problems, and finally, institutional investors evaluating environmental, social governance (ESG). Purpose puts a movement and impact first; the defining commitment of purpose is when it takes precedence over profits. Purpose-driven companies believe when society, the environment, and our collective well-being are doing well—businesses do better too.

Purpose-Driven Strategies have Three Key Pillars:

Employee and Systemic Engagement, Externally Virtuous, Meaty Measurable. 

These pillars of purpose require a company to be engaged in a systemic way, are independent of sales, and the impact should be both audacious and measurable. While purpose-driven strategies may give way to recruiting advantages, brand valuation, and competitive advantages, those are not the driving outcomes behind purpose. Purpose-driven PR is not the driving motivation behind purpose-driven implementations. The defining commitment of purpose is when it takes precedence over profits – when internal culture is SO strong, so empowered, that decisions at all levels are made with a purpose in mind.

These Purpose Driven Strategy distinctions are important—because consumers—AND Investors are savvier than ever: They see through cause marketing campaigns with little authenticity. They’re alert to saying one thing, but doing another -greenwashing is so common it had a name.  Distrust in governments continued to decrease, while expectations of businesses continued to increase.

Purpose-driven strategies differ from the historical ways brands engaged with movements and nonprofits.

The Difference Between Purpose-Driven and Social Impact

Although used interchangeably sometimes, purpose and social impact are different. What exactly is purpose-driven strategy? It’s a deep, sustained engagement for change by which the company recognizes its own impact, including internally, at the corporate level. Social impact is 100% external and very often involves inspiring a stakeholder community, like customers, to work together for a sustained period. For this reason, businesses usually engage in social impact in partnership with nonprofits.

The Difference Between Purpose Driven Strategies and Philanthropy

The difference between purpose-driven strategies and philanthropy is based on the level of engagement the company commits to. Traditionally philanthropy was a broad term used to describe when a business contributed to a cause – anything from a social nonprofit to funding a building or a program at a college. This giving required very little else from the company outside of the donation. Companies often use philanthropy to attract other monied investors or achieve other strategic goals, but on the surface, having a philanthropic donation very often aligns with a marketing campaign or a PR campaign. Philanthropy also usually had little to do with employees and customer activism or interests.

The Difference Between Purpose Driven Strategies and Corporate Giving

That gave way to CORPORATE GIVING –programs. The United Way is an outstanding example of corporate giving, this is when an organization encourages its employees to unite behind a single cause to create a greater donation scale. At this stage, companies get more involved as multiple departments such as PR, or HR to create systems and messaging around corporate giving. Companies whose employees give a lot receive recognition in the community. Corporate giving gave employees the opportunity to easily give to an organization; some corporate giving programs allow employees to choose a cause that was important to them, but in the most traditional sense, the executive team partnered with a nonprofit to create a corporate giving program.

The Difference Between Purpose Driven Strategies and Cause Marketing

CAUSE MARKETING are initiatives that tied sales to a corporate donation  – started in 1983 when Amex donated a penny to restoring the Statue of Liberty every time someone used their card—cardholders grew 45% and card usage increased by 28%. By 2013, 76% of consumers thought it was OK for brands to support good causes and make money at the same time. Before we knew it, there was a cause marketing campaign everywhere we looked, from pink ribbons to yogurt lids. Enterprises like Hersheys even had internal positions that combined marketing & corporate social responsibility.

If you’re interested in implementing purpose-driven strategies at your company, check out our free guide to implementing purpose. 

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Can Growth Marketing and Public Relations Work Together?

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Can growth marketing and public relations work together. Growth marketing is about customer acquisition and retention, often through paid media, with relentless iterations and deeply engaged knowledge of the consumer. Public relations is reputation management of a company’s image, often through earned media and deep understanding of broader cultural and media trends. So what do they have in common? On the surface, not much, but when you dig deeper into the tactics and the metrics, we can see where together growth marketing and public relations can work together successfully.

Suppose the business objective for a consumer product launch is to increase sales through decreasing competitors’ market share. In that case, a digitally savvy PR agency knows how to do competitive research of the entire digital landscape and media landscape and use that data to determine the opportunities to overtake a competitor, while a growth marketer is reviewing how the company attracts customers and retains customers. But where do growth marketing and public relations work together?

Data Driven KPIs

Today’s modern PR firms and PR campaigns should be tied to business goals and identified public relations metrics that support and funnel up into that goal.  While growth marketers are developing ads, PR agencies are developing ways to capture the target audience’s imagination. PR agencies may present a word-of-mouth activation or a targeted quality over-quantity earned media campaign that overlaps targeted audiences. A PR agency might also recommend content which can boost SEO and support brand values that interest and retain customers.  Just like a growth marketer, a modern PR agency is tracking metrics. What metrics might a PR agency track in the above scenario?

  • Mention Quality
  • Article Reach
  • Brand Placement in Article
  • Share of Voice
  • Domain Authority

All of the above PR metrics are measures of awareness and credibility. These metrics support top-of-funnel AND bottom-of-funnel customer journeys and can support growth marketing efforts with a keen eye on target audiences and messaging which supports growth marketing.

The Digital PR Toolkit

For growth marketers, the digital tool kit is primarily paid (but not exclusively); for growth marketing PR, the digital tool kit is primarily owned (but not solely). But there are a few areas where growth marketing and growth PR connect. One of those is SEO. For the growth marketer, SEO provides opportunities for retargeting and organic acquisition, growth marketing PR adds value to both. With a savvy eye on keywords and quality inbound links, PR supports growth marketing objectives to funnel into business objectives.

That’s not all; PR agencies working with media outlets to build revenue opportunities can help growth marketing with a high domain authority on inbound links as well as excellent reviews from credible media outlets, which send potential new customers searching for the product. These reviews could be in gift guides or hero reviews where the consumer product receives an in-depth study that meets Google’s product review update recommendations. Meanwhile, growth marketers will typically focus on reviews from influencers or existing customers. And a brand with positive customer reviews gives a journalist further confidence in a brand and a product.

Today, PR and growth marketing can use some of the same tools, they use them slightly differently:

  • Inbound Links
  • Owned Media
  • Credible Review Acquisition

Credibility: Where PR Fills The Gap

I often tell our clients PR creates the awareness and solidifies reputation; ads are the conversion driver – that’s how they work together, and they both work better. Why? It’s simple: earned media from credible media outlets is more trusted than paid ads. But few journalists look at it as their job to write conversion-focused marketing copy. The journalist’s job is traditionally to create the content that keeps you on the pages. From a longer tail and more strategic point of view – PR also builds brand credibility on the corporate level, trusted brands have faster aquisition and they have longer customer retention, meaning growth marketing is even more influential.

So when someone sees a great review of a product, and THEN they see the ad, they get the trigger to purchase the product, or maybe they sign up for a newsletter, or maybe the look for more reviews and do a Google search that lands them on another referral site. The pathways are endless, but they all come back to one thing: supporting the brand’s business goal.

I’m a fan of understanding and maximizing the media environment for our clients. The Avaans Media client is ambitious and goal driven, so understanding how our jobs support overall marketing strategies and business goals is essential. When we evaluate the landscape for our clients, we find a distinct point of view, and because our tools are different than growth marketers, we can glean insights and data that drive new insights. To be honest, I’m not concerned with being a purist about owned, earned, and paid. It’s the job of a digitally savvy PR agency to know what levers to pull when and how to shape campaigns that create success. That’s our job – and that’s why growth marketers and public relations can be best buddies.

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CEO Thought Leadership: Why Ambitious Executives Stay Visible

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The role of the CEO is ever-changing and one of the most notable evolutions is the expectation that a CEO be a visible leader. Some of the world’s best-known brands just wouldn’t be the same without their visible CEOs or founders. Ambitious companies from startup through IPO can take some cues from these leadership examples. With everything that a CEO has on their plate, why would they focus on thought leadership? Thought leadership checks off the optimal business outcomes from PR from increased brand value to easier recruiting, from investor awareness to consumer adoration, the reasons ambitious CEOs stay visible are clear:

  • 60% of decision-makers will pay a premium because thought leadership shows deep thinking and other virtues important to them.

  • People who follow both a company and one or more of its executives are twice as likely to purchase from that company.

  • 71% of decision-makers agree: thought leadership is one of the best ways to get a sense of the type and caliber of an organization’s thinking.

  • 81% of consumers say CEOs should be personally visible.

 

Today, CEOs of public companies and private companies alike are finding creative ways to keep their company in the news and remain the face of the brand. Savvy leaders are looking for ways to weigh in on social or business issues that impact their customers or clients. Leaders are driving purpose and speaking about it openly, they’re weighing in on newsworthy items, and they do it without ever pitching or selling their products or services. The Wall Street Journal won’t be a brand’s shill, but it will cover remarkable ideas and perspectives – and CEOs tend to have those. Dollar for dollar, the time invested in thought leadership PR pays off handsomely.

Steve Jobs: Thought Leadership Pioneer

An early leader in thought leadership strategy was, of course, Steve Jobs. With his signature black turtleneck and visionary ideas, he kept both Apple customers and the media hanging on his every word.

We may never know why Jobs, who was famously persnickety, embraced a more public persona, but the outcomes were undeniable. Because Steve Jobs stood in front of the press, he was instantly more credible when he delivered high-flying ideas about how his newest Apple products would change the world. Jobs’ presentations always had a restrained flair of showmanship, but showmanship nonetheless.

Another advantage for Jobs? After Apple ousted him-HIS OWN COMPANY-being the face of the brand made him indelibly connected to Apple. Firing Jobs would have been much harder to do the second time, but because he embraced thought leadership, there was also less reason to do so – Apple products did very well. To this day, Jobs is inextricably tied to Apple’s brand.

Richard Branson: Innovating with Public Failures

Richard Branson’s key message is crystal clear: innovation. Branson walks the walk. several times, Branson took to the skies in a hot air balloon, risking his own life to set world records and at the same time, creating opportunities for people to talk about Virgin Airlines. This stunt paled in comparison to the ultimate flight into space he took with Virgin Galactic.

According to LinkedIn: [Branson is] popular with everyone from entrepreneurs to HR professionals and in industries ranging from tech to construction. The only continent where he doesn’t have a single follower is Antarctica. This kind of broad-based appeal is almost unheard of, but Branson has pulled it off because he has one other secret to success: authenticity. He is actively involved with his own press.

At one point in his native England, Richard Branson was famous for being famous. The press actually heckled him for his publicity stunts – but they never failed to cover them and Branson took it all in stride, knowing that his stunts appealed to consumers who would appreciate the distinct spin Branson put on the Virgin brand and its products. Branson also weighs in on topics popular with his audience, like income inequality and universal basic income, which he called for in 2018. Should UBI ever come to be, Branson will be able to say he was the first CEO to advocate for it, and if it never does, it’s not his fault. It’s a brilliant PR move.

Thought leadership is more important today than ever before, and yet there are PR landmines for CEOs everyone where. Don’t rush thought leadership, be strategic and purposeful. Positioning yourself as an expert is best done in stages as it takes time to find the right cadence and the right rhythm. Be prepared to spend some time developing your own personal brand in conjunction with your thought leadership PR agency. Taking the time to develop your own brand will create authenticity and trust – both essential elements of a successful thought leadership strategy.

 

For all Branson’s attempts to make history, there is one founder here who did it well before he did.

Sara Blakely: From Scrappy Sales to History Maker

From the start of Spanx, Sara Blakely took complete control of her reputation, and she knew what set her apart could be a differentiator for the brand, too. From startup to IPO, PR was always on Blakely’s mind.

One of my favorite Blakely stories is when she bought Olivia Newton John’s famous Grease pants at auction. Her target market, feeling slightly nostalgic for the days when they could have rocked those pants, celebrated the move – even as it was an extravagance, it was one that made her relatable to her target market. She got a ton of press on it, and she never even had to talk about Spanx – the press did it for her every time they said “Sara Blakely, CEO of Spanx,” and the purchase was so on brand, it was difficult to ignore the brand. But that move was only one of a thousand steps Blakely took to control the narrative. She positioned herself as a thought leader by leaning into her differences as a woman CEO. She told, retold, and retold the story of how she founded Spanx without apology for its humble beginnings.

Blakely’s willingness to be the face of Spanx paid off with the ultimate metric: she is the world’s youngest self-made billionaire.

 

Whether your goal is to make history or maximize achievement, thought leadership for CEOs have never been more important than it is now. You’ve already done the hard work of becoming an expert – why not leverage it?

 

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4 Trends for Marketing and PR During a Recession

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Marketing and PR during a recession? Who does that? Well, the answer may surprise you: brands that grow the fastest. Why? Studies who brands that market during recessions gain additional advantages because it’s less noisy and easier to be seen and heard. Make your marketing and PR budget go further by tapping into these consumer trends.

Consumer Brands: Remember the Lipstick Effect

Coined by Leonard Lauder in 2001, the term “lipstick effect” when he observed that lipstick sales are inversely correlated to economic health. Why? Because consumers still want to treat themselves and small indulgences fit the bill, even during economic downturns. Luxury lifestyle brands do this with their perfume and makeup offerings. Yes, $69 for Hermes lipstick is a lot for lipstick, but for the Hermes customer or aspirational customer, $69 is an easy purchase compared to a $6,000 purse. Consumer PR and marketing during a recession can help you gain market share and grow when you offer your customers a way to sport your brand without making a gigantic purchase.

What’s your brand’s “lipstick”? What is the product that makes customers feel like they’re treating themselves without large expenditure? 

Find the Fun with Your Customers

What did the post-pandemic consumer teach us? They want fun and frivolity in the pandemic’s wake – and they STILL want that, perhaps even more, with all the gloomy news about a recession. While you, as a CEO, or CMO, might feel doubly beat up, it’s really up to you to bring the fun. From marketing to PR, if you give consumers something fun to talk about or a sense of escapism, consumers will find a way to your party, because they really want to have fun. So while you may be cutting your marketing or PR budget, make sure the things you keep are fun-filled. Not only will this improve your bottom line, it will attach fun to your consumer’s experience of your brand, which means they’ll associate you with fun after the recession too.

What’s your customer’s ideal way to escape? Find them and play with them there. 

Make Lasting Memories with Nostalgia

When uncertainty strikes, consumers love to “remember when.” Whether it’s nostalgia-based packaging or scents to connections to movies and songs, yesterday always brings comfort to consumers. If you’re a legacy brand with long-time customers, then you should absolutely take this opportunity to remind your customers of the good ole days you had together. If you’re a new brand and you don’t have that depth, you can trigger fond memories through partnerships and advertising.

What era makes your customers nostalgic?

Avoid Deep Discounts that Train Customers

If you train your customers to wait until the next sale, they will never buy if there isn’t one, whether or not there is a recession. Resist the urge to devalue your own brand right now. Not only do price discounts squeeze your margins during a time when you can least afford them, constant discounting feels desperate. Desperation is never a great look, especially for luxury brands. To maintain brand and positioning, the beloved cupcake brand Sprinkles resisted the urge to discount during the pandemic:

“Customers had been taught by other bakeries to expect that the product at the end of the day was worth less than at the beginning. But with our just-in-time baking system, these cupcakes were as fresh as their morning relatives. Even then, as tempting as it was to sell off those last few cupcakes at a discount right before closing, I knew we had to stand firmly behind the price. I preferred to donate those cupcakes than to eat into the value of our brand.” -Candace Nelson, founder.

The better option is to carve out a single day (or two) that your brand will offer value pricing, and when you do, look for ways to add value to your current price rather than discounting the product itself. You could offer a gift with purchase or a VIP experience.

Budget planning for marketing and PR during a recession feels less fun than when budgets are flush, but the reality is, you can make major headway during a recession AND you can enjoy the process and the output just as much if not more.

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5 Often Untapped Strategies of Early Adopter Marketing

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Ah, the early adopter. Their the people who grab on to things first, they start trends and they are influencers in their respective communities.

Whether you’re a startup, a movement or a personality, you need these early adopters. Marketing to early adopters can be slippery though, what they grab on to is almost entirely motivationally based. Toss out your traditional “Three P’s” of marketing if you want to capture this crowd, you’re going to need to think through what makes them tick.

Whether you’re building a product or starting a movement, keep your early adopters in mind. Strategies of early adopter marketing require a deep understanding of their motiviations.

Early Adopters Value Intellectual Stimulation

It doesn’t matter what your target market is, a certain segment of them are early adopters and early adopters like to be challenged and stimulated.  Puzzles and quizzes are intriguing to these people, but they get bored easily, so make sure the content matches the intelligence level.

Don’t mistake this to assume that every puzzle or quiz is intriguing to early adopters. They aren’t necessarily the “Buzzfeed” quiz takers. They like to learn and be challenged but they aren’t interested in dumbed down versions of anything. By the time something has caught mass adoption, early adopters have either “been there/done that” or are already deeply engaged in using the product.

Early Adopters Have High “FOMO.”

Because they value their role as early adopters, they never want to be “out of the loop” or miss something that’s particularly cool.

Tap into that “Fear of Missing Out” during the earliest stages. Give them ways to be cool to their community by letting them be the gateway to a broader audience and you’ll be tapping into their desires to be seen as an early adopter.

Google generally does this really well when it launches products. It does an initial invitation to known early adopters and gets everyone else clamoring to be part of it in the first phase and SEEN as an early adopter. Google definitely has marketing to early adopters down.

Early Adopters Are Attracted to Art, Emotion and Adventure

Perhaps more than any other target market, early adopters are pulled in by emotion, art and adventure.

This is one reason why Apple’s early emphasis on design caught on with early adopters, they loved the elegance of the product and interface, the art of the experience.

Remember, art, emotion and adventure can happen online and offline. This is a place where you can really get creative and have some fun. It’s also easy to identify these people based on where they go because events like TED and TEDX inherently draw early adopter personality types.

Because of this constant searching early adopters have, curiosity is a primary trigger for action. Tripping the curiosity trigger requires some thought because early adopters aren’t generally suckers for the usual mass-marketing techniques; they’re a little more sophisticated than that. You’re going to really have to think of something that genuinely makes them curious.

The “Why” Seriously Matters

Early adopters are very observant they generally see through tactics and need a reason to be inspired.  Your marketing message to early adopters needs to be centered around something inspiring.

Instead of focusing on product features, tap into the deep intellectual and emotional reservoir of early adopters and give some insight to them about why this product or movement matters. You’ll likely need to do some message testing here, but it will be worth it once you hit on the “why” that matters most.

Don’t Confuse Early Adopters for Extroverts

It’s easy to lump the two together, but research shows that messaging that targets extroverts actually repels early adopters. Early adopters like intrigue and creativity, they aren’t particularly attracted to social attention in a public way. This doesn’t mean they aren’t on social media, it just means that their triggers are different. They like to have their role as early adopters confirmed, but they also like to be the messenger of that delivery.

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