Is Now the Best Time to Ramp Up Your Startup's Marketing Budget? Key insights and fail-safes that will prevent owners from blowing through too much cash, too soon.

By Douglas Wilber

Opinions expressed by Entrepreneur contributors are their own.

Many startup leaders think that the more money they feed into their marketing budgets, the faster they'll gain traction. For B2B companies, however, nothing could be further from the truth.

A 2021 CB Insights study found that nearly 4 in 10 organizations hit rock bottom because they either outran their fiscal runway or couldn't raise new funding. Spending too much too soon on marketing can lead to both of those problems.

B2B marketing differs from that of B2C because it's typically more involved, requiring a dedicated sales team to close deals. You can't just throw a bunch of marketing on the wall to see what sticks, you have to work closely with your sales team to listen and learn from customers.

Related: How to succeed in the world of entrepreneurship and not die trying?

The consequences of overzealous spending

It can be tempting to scale your business from the get-go with flashy brand awareness campaigns. But until you've done the work to find out what your sales team needs, fully understand your customers, perfect your product and craft your messaging? Marketing can be a losing proposition in B2B.

For starters, you could end up saying the wrong thing to the wrong people because you haven't been listening to consumers long enough. It doesn't make sense to get on a megaphone with the wrong message.

Even if you say some right things, your product might not be ready to deliver the results you're promising. Customers will be unhappy and share their experiences with others. You'll end up spinning your wheels trying to regain a solid brand reputation.

Premature marketing can also present issues with raising capital. Let's say you put tons of cash into marketing and get only 10 customers out of it. Your customer acquisition cost will be sky-high, which investors won't appreciate.

Related: Investment Deals Are at Historic Levels. Want to Be Part of It? Be Ready to Answer These 4 Questions.

Spending your marketing budget in the early stages

My company, a B2B SaaS provider, spent a lot of time strategizing before we really started putting fuel on the marketing fire. We aligned sales and marketing from the get-go to hone our core audience and find out what customers needed. Then, we expanded our verticals, developed industry partnerships to boost our credibility and even merged with another company to expand our product's capabilities. Now, both our product and our team are ready to successfully handle the outcome of our marketing.

Assess your readiness with the following questions:

Have you honed your message?

Focus on customer pain points and how your product or services solve them. You'll need to spend some time and money on audience research, but that's better than wasting dollars on messaging that doesn't resonate.

My company saw the opportunity to fill a gap for our target market and focused messaging around it. Our social media management software serves regulated industries, such as financial services and insurance, that must abide by regulatory guidelines for electronic communications. A primary pain point for these industries is that most social media management software companies design their products for consumer brands or small businesses. Regulated industries can't rely on those tools to help them stay compliant, so we built compliance controls into our platform and highlighted our purpose-built strategy in our messaging.

Remember, you may have to deliver your message as many as a dozen times for it to resonate. Sales will be critical to establishing the core group of satisfied customers you'll need to build your credibility and reputation for future growth.

Is your product ready?

For many B2B startups, like those in SaaS, data can give you an exact picture of how clients are using your product and where you can improve. Ensure that your offering can effectively solve clients' pain points before you put out marketing messaging promising how it will help.

Team-based work management tool Asana identifies "engagement" as one of its key benefits to customers. To back up that message in its product, the company focuses on product research to measure how clients engage with the tool. One way Asana gathers feedback is through its "Voice of the Customer" program, which involves client surveys about their satisfaction with the tool over time.

Ask, listen and then improve over time.

Is your team prepared?

Clients are increasingly demanding that their vendors have the in-house resources and framework to chart a path for success. It's no wonder LinkedIn's 2020 Emerging Jobs report found that customer success specialists are one of the fastest-growing positions.

Your first job as a startup leader is to build a solid product and scaleable company, not to develop a marketing agency. Play it safe with your startup's budget until you can check off all-of-the-above boxes. Work closely with your sales team as you research, listen, test and improve---THEN ramp up your marketing efforts.

Related: Today, reputation is online: 4 simple tips to maintain a good digital image of your business

Wavy Line
Douglas Wilber

Entrepreneur Leadership Network Writer

CEO of Denim Social

Doug Wilber is the CEO of Denim Social, a social media management software company that provides tools to empower marketers in regulated industries to manage organic social media content and paid social media advertising on one platform.

Editor's Pick

A Father Decided to Change When He Was in Prison on His Son's Birthday. Now His Nonprofit Helps Formerly Incarcerated Applicants Land 6-Figure Jobs.
A Teen Turned His Roblox Side Hustle Into a Multimillion-Dollar Company — Now He's Working With Karlie Kloss and Elton John
3 Mundane Tasks You Should Automate to Save Your Brain for the Big Stuff
The Next Time Someone Intimidates You, Here's What You Should Do
5 Ways to Manage Your Mental Health and Regulate Your Nervous System for Sustainable Success

Related Topics

Business News

'Do You Hate Me?': High School Teacher Shares Wild Emails He Receives From Students

Jordan Baechler teaches high school students in Ontario, Canada.

Business News

Hedge Fund Pays NYC Interns $20,000 a Month on Average, Sent to Lavish Palm Beach Kickoff

Citadel is known for its over-the-top parties and company retreats.

Data & Recovery

This Father's Day, Give the Gift of No More Low Storage Warnings

Save 85% on 1TB of cloud storage for Father's Day.

Growing a Business

Do You Say 'Like' Too Much? Don't Worry! I'm a Sociolinguist, and I Like 'Like.'

The modern use of the word is denigrated through and through. But it may be doing more communicative heavy lifting than we give it credit for.

Starting a Business

Starting a New Business? Here's How to Leverage Transferable Skills From Your Prior Careers and Drive Success

Launching your own business can be daunting, but when you harness the skills from past jobs, there are a variety of things you must ask yourself. Here are three recipes for success using your prior experiences.