Reasons why Startups and Small Businesses Fail in Demand Generation?
“42% of SMBs fail due to demand generation issues”
Even with a great product, it is not always easy to get people, especially targeted customers, to take notice. Without demand, even the best products and services are bound to fail.
Small businesses and startups have the inherent struggle of reaching their audience and driving demand, often because of limited marketing skills and expertise.
Failure to drive enough demand eventually impacts the ability to raise funding or the viability of the business.
The primary reason for any business, especially if it is a startup or SMB (Small & Medium Sized Business), to fail is that it is unable to drive enough demand and secure enough customers to have a profitable business or the level of customer validation to raise funding for growth.
State of Startup & SMB Marketing in today’s world
“71% of Growing Small and Medium Businesses Survived the Pandemic by Going Digital.”
Many of our SBDC (Small Business Development Center) partners have anecdotally confirmed that there is a 20x increase in SMBs going digital and hence the digital marketing strategy has become critical for SMBs and startups.
Digital content is what people feed on daily! And by not being able to create authoritative, meaningful blogs and other marketing content, startups and SMBs drive away potential customer traffic. Without the demand engine, building a sustainable business becomes impossible for them as without a solid customer base they don’t have profitability and their chances of raising funds are shot down.
Digital content is what people feed on daily! And by not being able to create authoritative, meaningful blogs and other marketing content, startups and SMBs drive away potential customer traffic.
Why startups and SMBs fail to drive demand?
Many startups and SMB owners admit that their marketing strategies are either not working or they are not sure if they are working.
The following are the reasons why marketing is always one of the biggest challenges for startups and SMBs.
- Massive Cost of Employing Multiple, Disjointed Agencies and Consultants – Startups and SMBs often hire a combination of marketing agencies, consultants or content writers to strategize, plan and execute campaigns for their business. The cumulative cost of employing multiple consultants, agencies and writers is astronomical! Even after spending thousands of dollars on marketing services, agencies and consultants the SMB owners don’t see any tangible results in terms of growth in demand.
- Lack of Skills – Many startup and SMB owners and founders have to fill in multiple shoes, wear multiple hats to run their business, including marketing. However, most of them do not possess deep functional expertise in marketing to do it all by themselves or get it done in an efficient manner.
- Complexity of Selecting and Managing Multiple Agencies and/or Consultants – The process of identifying, selecting and educating the marketing agencies and consultants about their business is very complex and time consuming for the startup or SMB owners. Co-ordinating between different agencies, consultants and writers to produce quality content and get marketing campaigns executed consumes a lot of time when the startup founder is already playing dozens of roles. Months go by without seeing any tangible results.
As a result, we routinely hear from startup or SMB owners who failed in driving demand even after shelling out tens of thousands of dollars on agencies in a matter of a few months.
Tech startup owner invests $60k in marketing agency with zero results!
Just days ago, we spoke with a South Carolina tech startup owner who invested $60,000 in a marketing agency over three months, expecting nothing but what every startup expects – business growth. But nothing changed, neither his domain rating, nor his lead quantity or revenue. The results were zero! He did not see any impact at all!
In fact, he was highly disappointed, and yet more surprised when he saw how Stephen, an Arizona startup founder was growing remarkably rapidly and at a much lower cost leveraging MarketEngine.
Small Business Owners’ Experiences with Marketing Agencies
The co-founders of a manufacturing business in Massachusetts, who design innovative, modern-day furniture, spent $20,000 on an agency and got nothing tangible to show for. Over the period, they worked with multiple agencies for months but what they remarked was “there was none amongst them who tried to understand what our business is.”
These founders had to reinvent the wheel many times with multiple digital marketing agencies and freelancers and eventually got tired of it! They even started to learn how to do it on their own. One co-founder describes his experience, “We have to do this, we have to do that! And this, and that! How are we supposed to do it?”
What he meant was that they had to learn to create a lot of content, learn to run campaigns using various tools and platforms. All of this required them to have clear, deep functional knowledge of marketing strategy and its execution, which is an enormous job for them as they had limited time in a day, and other, important roles to play!
At one point, these business owners spent $20,000 on a digital marketing agency over 3 months and quickly realized that none of that was moving the needle or generating any sales demand. They lost a lot of valuable time and had to cancel the engagement with the agency.
At one point, these business owners spent $20,000 on a digital marketing agency over 3 months and quickly realized that none of that was moving the needle or generating any sales demand. They lost a lot of valuable time and had to cancel the engagement with the agency.
Tech startup founder’s trust issues with marketing agencies
In one of the southern states, a tech startup founder had the worst experience of dealing with a marketing agency who had claimed to have worked with giant brand names, only to find out that they were untrue. It had false portfolios to lure business owners to sign with them, and once done, after-sales services were horrible!
At this stage this startup can’t afford a marketing team, or a fractional CMO which would cost them roughly $5,000 per month for one day a week. They has to do something, so they switched to paid advertising on social media. The agency spent their money on Instagram and Facebook when, for a B2B tech startup, LinkedIn would have been a more appropriate platform. Lastly, without proper content on the website, that little traction they got didn’t convert into anything meaningful.
As a result, their website is very content light, which would even get properly recognized by the search engine crawlers. The content on the website did not clearly communicate their customer’s problems that they are solving and the benefits they are delivering. The website being the front door for any business potentially drove many prospects away, as the content was either non-existent or not engaging.
Lastly, without proper content on the website, that little traction they got didn’t convert into anything meaningful.
As a result, their website is very content light which would even get properly recognized by the search engine crawlers.
MarketEngine by StartupWind: Unified Marketing Solution with Generative AI for Startups and SMBs
StartupWind deeply understands these challenges and constraints of startup and SMB owners as we have worked with over 10,000 startups and SMBs on our Innovation platform.
We have used this knowhow to build MarketEngine to help startups and SMBs.
MarketEngine is Marketing-as-a-Service, powered by Generative AI and assisted by human marketing experts, and it helps you drive demand faster and gain actionable leads strategically while eliminating futile spend on marketing agencies.
MarketEngine streamlines daily marketing activities for startups and SMBs and helps grow their pipeline faster – cutting down execution time from months to weeks, and bringing down marketing cost by up to 75%.
Learn more about MarketEngine – Marketing-as-a-Service (MaaS), powered by Generative AI, that offers an integrated marketing and lead gen solution across all channels and at a reasonable price that a startup and SMB owner can afford.
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