How Much to Invest in Marketing?

What is Business Development

How much to spend on marketing strategies during each business phase?

I see marketers fall in love with their favorite strategy...

Demand Gen is the best!
Outbound is the best!
Growth is the best!
New strategy Du Jour is the best!....

Depending on their favorite strategy, that's where they spend the most.

For business development leaders, the answer is more nuanced.

It depends on your Business Phase.

1. STARTUP PHASE

During the Startup Phase, the corporation has few, if any, customers. It also has little or no community brand awareness.

Startups can allocate most resources to an Outbound Strategy to help generate initial sales.

Inbound Strategies typically require more resources and time to achieve results.

As sales grow, more resources may be allocated to Inbound investments until the corporation achieves "Product-Market Fit."

Famed Silicon Valley founder and investor, Marc Andreessen, coined the term in his 2007 blog post.

Product-Market Fit occurs when customers perceive such great value from a product, they spontaneously promote the product via word of mouth.

Once a corporation achieves Product-Market Fit, the Inbound Marketing investments may rapidly increase momentum.

Inbound Marketing may also be bundled with Expansion Marketing to maximize increasing returns and market momentum.

2. GROWTH PHASE+

The corporation may begin to decrease Outbound Marketing investments since this strategy may yield long-term diminishing returns.

Some companies fall into the Outbound Trap thinking, "Outbound did so well during Startup, let's do more of that!" Only to suffer diminishing ROI.

Check out my related posts in comments for:

- Definitions of each strategy
- Conversion Rate & Cost Effectiveness of the Top 10 tactics

Tony Gray, BDP


P.S. learn more in the “Business Development Body of Knowledge”
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