Small marketing budget – no problem!

Aside from salaries, marketing typically comprises a big percentage of operational expenditure in an information business (such as a software or consulting company).  Much of this expenditure can certainly be put to more effective use.  Smaller companies have to learn to “punch above their weight” with very limited marketing budgets. The good news is that with a few simple strategies, you can dramatically increase the impact of your marketing activity even as you reduce the cost.


If you are in a smaller information business such as consulting or a software startup, ask yourself, how would your business be enhanced if you could reach significantly more prospects with more targeted and effective marketing without extending your marketing budget, or needing to employ more sales people?

Marketing budgets

When analysing the expenditure in large software and technology companies, sales & marketing costs are a significant percentage of revenue:


In my own experience, marketing budgets in smaller software companies are far lower in percentage terms than might be inferred from the chart above.  But it is nevertheless revealing that marketing+sales exceed R&D in most cases and that is because in the information business you must have the best marketing to succeed, even more so than the best technology.

In developing a marketing budget, historical numbers are typically combined with a high level plan that defines the number of campaigns, events, press releases, salaries and branded consumables/corporate gifts.

It is believed by many decision makers that the marketing budget can usually be cut by up to 50% without impacting the business – the problem however is that we don’t always know which 50% of the budget to cut!

In this sense, marketing is both an art and a proven discipline. In times of financial stress the marketing budget is often the first to be cut back. This can severely impact the future pipeline of opportunities for a smaller company, particularly a company that sells information or ideas.

Once the annual budget is approved, marketing in reality can then become a tactical exercise; responding to short term requests from product managers, the CEO, sales people and HR. The original budget becomes an approximation of reality. After the fiscal year is over, an analysis often reveals that “a lot was done, but little tangible was accomplished”.

Nine simple strategies to increase the impact of your marketing effort

This frustrating process of budgeting and then ignoring the best intentions during your execution can be turned around by following some simple strategies as described below.  These are a few selected from my own experience in marketing within a software product business and a startup environment:

Focus marketing on case studies and testimonials centred around the customer and the problem you solve

There is nothing more powerful than word of mouth. At its heart, marketing is all about creating the right conversations in your prospects. Case studies and testimonials resonate with your prospects in that they are always in the language of your target market, there is inherent trust from an independent endorsement and case studies are always focussed on practical solutions to common problems.

Tell stories in your marketing messages

The human brain is wired to listen carefully when stories are told. Stories are one of the most effective forms of communication, yet most marketing collateral still focuses on features, benefits and specifications. Stories on the other hand tell of the problem, the struggles to solve a problem, the guidance and mentorship from a trusted partner that leads to a solution and the benefits enjoyed. Think about the story lines of some the most popular movies:

  • The hero is struggling against insurmountable odds
  • A guide appears with wisdom who mentors the hero through the challenges faced
  • With the guide’s help, the hero starts to win the struggle
  • The hero finally conquers the problem and (hopefully) makes the world a better place.

Whether the hero is the Hobbit, Luke Skywalker or Rocky (played by Sylvester Stylone) – and the guide is Gandalf, Obi-wan Kanobi or Micky Goldmill – the underlying plot and story line of all great stories contain each of the elements above.

By converting your marketing message into stories you actually trigger the same thought processes in the brain that are proven to really work in the entertainment industry and thereby get your message across very effectively.

Note that the hero in your story must be your customer. You might want to portray your company as the hero of the story; but this would be a terrible mistake because the customer could not care less about your company unless it solves their problem.

Make the pivot from outbound to inbound digital marketing

Most companies by now have understood the importance of content driven digital marketing, whereby customers are drawn to you because of your content, and because you continue to provide valuable resources.  Inbound marketing can be far more cost effective and targeted than random efforts that rely on interrupting your prospects with advertising or equivalent.

In the world of information and software businesses, outbound marketing such as advertising, events and PR is changing rapidly in favour of a strategy around your content rich (and valuable) website that draws customers to you and your products.

Much has been written on this subject and many companies are well advanced in making the transition.   Some however have yet to start – their web presence is still the equivalent of a digital glossy brochure and there is no meaningful product information that will attract customers.

Create automated sales processes to generate qualified leads

Conventional marketing exists to create leads which are passed on to sales people.  Marketing in the “ideas economy” puts in place automated processes that have the ability to turn a prospect into a qualified lead and even make the sale by an entirely automated process and using digital channels.

Most software businesses operate in a global context. The effectiveness of traditional sales is significantly diminished in regions or territories where you don’t have a direct sales force or strong channel partner. By automating as much of the online sales process as possible you create the potential to reach these markets without the need for partners or a direct sales presence.

But this strategy will require some fundamental new business processes and some new technologies that are beyond the scope of this article.

A good consumer example of automated sales process is buying a book on Amazon – here you are buying an information product entirely without the assistance of a sales person.

Extrapolating this experience into the world of personal software is easy. Extrapolating to the world of enterprise software might seem a stretch, but think about how many software applications your company already buys online without any sales intervention by the vendor.

It is just a matter of time before your company will be comfortable buying cloud based software services based purely on inbound marketing techniques by the vendor who provides an automated online sales processes.

Even the creation of your quotes and proposals can be streamlined and automated, and all that is left is to negotiate the contract and agree the scope of specific services required, if any.  Of course, the last step can be done by Skype call, making the whole sales cycle digital!

Create quality content that secures your position as a thought leader

This is not new, most software product managers understand the importance of positioning yourself as an expert in your domain through providing thought leadership on an ongoing basis to your target market.

My advice here is to look at the way the big consulting companies are marketing their services through providing relevant research, white papers and articles to their prospects.

If you are in any way involved in a consulting or specialised software niche and you are not releasing thought leadership on a regular basis; you will inevitably see a decline in sales and the death of your product line.

One caveat however, thought leadership does need to be earned through growing trust.

You cannot simply write random articles and label them “thought leadership”. The test of thought leadership is that the author has gained credibility in the industry and in some way is leading real change in that industry through presenting new ideas.

The secret to saving costs here is to use your own experts, and provide them with the remit, the tools and the motivation to write specialised articles that you publish online.

Reduce all advertising expenditure that is about creating “brand awareness”

I am not a fan on spending big advertising money just on creating “brand”, especially when it comes to smaller software businesses. You are not Apple, Oracle, Microsoft or SAP (yet).

Building a brand must surely rank second in priority to having a clear value proposition to the market. Customers don’t buy into your brand unless you are massive, they buy into your solution.  Market your solution first, the brand will follow.

You do of course need a well crafted and professional brand, but in my experience this can be achieved at a reasonable cost typically far less than what many technology companies actually spend.  The secret is consistency and keeping it simple.

Exploit the relatively low barriers to entry into digital marketing

If you already operate in the online marketing world then this strategy is self evident, but many companies are not there yet.

Marketing to a well segmented e-mail list, complemented with social media interaction and a content rich web site are essential ingredients in marketing any information business.

Using new channels such as online video and audio is a comparatively low cost and personalised alternative to typical corporate marketing channels such as glossy publications and press releases.

You need a clear strategy for your digital marketing initiatives or you will be left behind.

Remove silos and barriers between product managers and your marketing department

Product managers must include marketing in the very early stages of product development.

This will ensure that the value proposition for the intended product is crystal clear and baked into subsequent development. This will also ensure that marketing remains very close to the value proposition of the actual products, and not go out on a limb with glossy brochures and pretty web pages that actually don’t address customer problems.

Strengthen your copy writing capabilities

The transition to digital sales means that much of the sales process will be automated. This means that you have to sell the benefits to the customer through well written copy. Fortunately copy writing is something that can be learned, but if you must you should outsource this to professionals if you don’t have the resources internally.

I have mentioned a few strategies that could help you leverage your marketing spend and achieve more impact.  No doubt there are other strategies for your own circumstances.  Feel free to pick and choose.

A quote I remember goes along the lines of “…in business there is only innovation and marketing.  Everything else is secondary”.

Image credit:  Olivier Bardin - Creative Commons Licence