Marketing and advertising are the main sources of growth for any business.
However, when starting a business it may not be the wisest financial decision to pour money into paid ads.
It is so much easier, through advertisements, to get a company from 10-50 than 0-10.
However, when I speak to a lot of new business owners they have the same preconception in their minds: “Since I have no customers, I should pay to get my products in front of my target audience”.
Let me explain why this may not work with an anecdote of an encounter I had with a stranger.
Story Time: Why People Don’t Want What You Are Selling
I just signed a lease with my girlfriend at the time for a new house in a nice neighborhood.
Before we completely moved in, I had some new furniture delivered that I would go to the house and assemble in the weeks leading up to our move-in day.
One of these days I noticed a package on our doorstep that was not furniture.
The cardboard box was cold and it had a sticker on the box that read “refrigerate immediately after opening”.
“I did not order this,” I thought to myself.
The address was correct however the name was completely different.
We assumed this box was for the past tenants of this house.
Luckily, the box had a phone number on it, so I decided to call to get this box delivered to where it needs to be.
I called the phone number and it went straight to voicemail, but the voicemail box was full.
I decided to call one more time.
This time a woman picked up the phone.
I started with “Hey sorry, I just called you….”
Before I could finish I was interrupted with “I know you just called me and you ought to be ashamed of yourself and get a real job, never call me again, goodbye”.
I think she thought I was trying to sell her something.
I would have stopped trying, however, the box said to refrigerate immediately so I was concerned about whatever was in the box and the money wasted on it if I didn’t sort this out in time.
I called once more.
Immediately the phone was answered with “I don’t want what you are selling. Stop calling me or else I will call the police!”
“Ma’am, I’m not trying to sell you anything, please just listen to me for a second, I have a package that has your name and number on it, delivered to my house”.
Finally, she let me speak and I explained the situation we were in.
She eventually sent her son to come to my house to pick up the package.
But on the phone, she apologized for being so rude.
The key takeaway from this story is that this woman assumed I was trying to sell her something.
She didn’t know what that something was, but she was definitely not going to let me sell it to her.
People are so put off by salesmen or the idea that they could be gullible enough to “be sold”.
Imagine if she was having an issue with her personal life that I had a product that could 100% solve and it was very inexpensive.
Obviously, she would want it.
But she didn’t even let me explain to her whether or not I was selling that product that could solve all her problems.
All she cared about was not being sold to.
It could have been the fountain of youth, but that didn’t matter to this woman.
You can see countless YouTube videos of salesmen selling door to door.
When the homeowner answers the door, immediately they inform the salesman “Not interested” before the sales rep can even take a breath.
You may have even done this yourself.
I don’t blame you.
Leave me alone when I am home.
What I am getting at is with your business, if people don’t know your brand, they are unlikely to buy your products if you are making the first contact (like with an advertisement).
They don’t care how good the product is or how cheap it is, people don’t want to be sold to.
Usually how a new business begins to get sales and grow is when potential customers find their products in a non-threatening way; A friend introduces them, they just stumble into your store, your website comes up in a Google search, Etc.
Basically, they have to come to you and not the other way around.
If a new business starts utilizing paid media before its brand has any recognition or social proof, your audience may be put off by your company.
Definitely don’t want to make a bad first impression on your audience.
Before Starting Paid Ads
Before you start investing money into paid ads, you need a few basic pillars established first.
You need to have a steady base of recurring customers.
This does not have to be 1,000 returning monthly customers—it can be as little as 5-10.
But this shows your business a few things:
- Your product is good
- People like your product
- You know more about the people who are buying your products
If you have not sold anything or only sold a few products to people that don’t seem to purchase again, I would recommend not investing in paid media just yet.
You also need a steady source of new business.
Content, Networking, & Outreach.
These are the basic pillars of marketing that don’t require thousands of dollars spent on advertising.
It is also important to utilize all three, as one source of business could dry up and you may be scrambling for new business.
If you need help with your content marketing, you came to the right place.
Blubird Marketing is amazing at content marketing and grabbing attention from the right people in the right places online.
Posting content around the benefits of your products or services allows interested visitors to find and explore your products without you trying to sell them on the spot.
It is a lot less threatening for the customer and allows you to start building trust between the customer and your brand.
I don’t just mean posting on social media (however this can be very effective if done correctly).
But the power of search engines like Google can drive thousands of new visitors to your website or online store every day for free.
Every visitor that finds your website or social media is a new opportunity to sell your products.
The main idea is to post quality content that delivers a lot of value to your audience for free.
The more quality content you post the better.
But posting 3 times a week of sub-par content can actually hurt your brand by fatiguing your audience.
I have met a lot of business owners who brag that all their business comes from referrals.
I agree that business from referrals is usually high-quality leads who value you and pay you what you are worth.
Networking is very important for growing a new business but it should not be the only thing driving new business.
Imagine hypothetically if a global pandemic happened and networking events got canceled.
“Brenden, that would never happen”.
I know it is unlikely but imagine if something happened to your only source of new business to where it stopped being so effective.
It would be wise to have leads coming in from other channels that you can rely on.
To properly utilize networking, you should consider being a part of 3 types of groups.
- Your industry specific networking group
- Your target audience’s specific networking group
- A general business networking group
A colleague of mine was a marketer for attorneys and he was a part of a digital marketing networking group, the Florida bar chapter in his area, and a BNI group.
These three networking groups kept him very busy and grew his clientele.
The final tactic to use for brand new businesses is outreach.
Finding the right people and connecting.
Not necessarily selling anything but trying to establish a professional connection.
LinkedIn is a great tool for this kind of outreach.
For product-based businesses, this could be executives of businesses or managers of distribution companies.
It is important to grow your network with the right people through outreach.
Remember, the best way to get someone to care about you is to show that person you genuinely care about them.
When Should You Start Paid Ads For Your Business?
paid ads or paid media are advertisements delivered to your target audience with specific messaging that would encourage your audience to take an action.
I personally manage over 30 ad accounts and I have seen consistent returns of over 1000% or 10:1 ROAS (Return On Ad Spend) for several clients.
Paid ads can be very lucrative and can grow your business to new heights.
However, the brands that get the biggest returns have been advertising for several years or even decades, and are spending north of $10,000 per day on paid ads.
If your business has the budget to start advertising immediately and you are able to maintain that budget for 2-3 months then I would say you should look into advertising.
Especially if you can afford a digital advertising partner that knows what they are doing.
Each industry is different and the cost of advertising varies by industry and location.
But advertising should not be looked at as an experiment but as a monthly investment that you are not expecting to stop any time soon.
Google recommends advertising for a minimum of 3 months to start seeing consistent results.
This is why I would recommend that most new businesses do not invest in advertising right out of the gate.
It is important to grow your business organically first.
Why You Should Grow Your Business Organically Before Advertising
At the beginning of this article, I explained that people generally don’t like to be sold to.
When you are advertising your product to a new audience you are interrupting, or a better term is annoying, your potential customers with your ad.
This is a great way of making a bad first impression and leaving a bad taste in the mouth of your target audience.
But what if you saw an ad (on Instagram or Facebook) that had been liked or commented on by your best friend?
Maybe you are more likely to look closer into that company.
What if your ad showed social proof of past customers trying your products or services and saying how great they are?
You can’t have true social proof without selling a few products first and having happy customers.
Maybe someone sees your ad on social media and clicks through to your profile and sees your profile is not properly set up.
You will most likely put off that person from purchasing your products.
Same thing with a YouTube or Google ad.
If the person clicks through to your website and sees it is not properly built or looks “sketchy” they are likely to not convert.
This is why it is so important to grow an organic foundation first that gives the appearance of an already established business before reaching new people.
You can find out what people are really saying about your products, which then can be used in the copy of your ads.
You can also see what types of people best respond to your products which can help with targeting your ads.
Without having grown a small audience of customers first, you will be playing a guessing game and may lose more money on ads than you may be comfortable with.
When a business seems like they have a strong base of customers it is easier to convert new customers. (Think of big brands like Amazon, Walmart, or Target)
However, this does create a chicken and egg scenario.
Utilizing the 3 pillars of marketing (Content, Outreach, & Networking) you should begin to grow your business organically.
So hopefully if you made it this far in the article, you have a small business and are seeing consistent sales and good reviews on your products.
If you are not, advertising will not help your business in the way you think.
You might make a sale through ads, but if your product underdelivers on value that you will not make a repeat sale or earn word-of-mouth referrals.
All advertising would do is speed up the process of sales (usually at a very high cost per conversion) without actually growing your business and once the ads stop, so do the sales.
Ready To Start Advertising? Here’s What You Do
Before I touch on this topic, I can’t recommend using a proper marketing agency to run your ads enough.
Don’t try to save money on a management fee because you will most likely lose more money trying to figure out how to optimize your campaigns yourself.
Let an experienced agency run your ads for the highest returns.
But what I have learned throughout my years of digital marketing experience is that the classic foundation still holds true.
The marketing or sales funnel needs to be properly executed for new brands when starting advertising campaigns.
Understanding The Sales Funnel
A sales funnel is a buyer’s journey or interactions with your brand until they finally convert.
Each business and marketing campaign will have a different sales funnel but for the most part, there are three common phases of every funnel: brand awareness, consideration, & conversion.
Brand Awareness Phase –
Exposing the most amount of new people to your brand and products
Consideration Phase –
Giving more information on the benefits your product can solve for the target audience
Conversion Phase –
Persuading (usually with a limited time offer) your target audience to make the sale now
The idea of the funnel is to slowly grow that brand recognition and trust until you eventually can start making sales consistently through a tried and true advertising process.
The most overlooked phase is the brand awareness phase.
“Why would I pay for brand awareness, when I could just put all my budget into a conversion campaign?”
This is the phase that should introduce your brand to your audience, which is debatably the most important phase.
I have seen with clients that if we are running a brand awareness campaign, our conversion campaign converts more and allows for new people to keep entering the sales funnel.
There is a lot that goes into paid ads but the main idea is to display the benefits of your products while understanding the interaction points of your audience. (First interaction, second interaction, etc.)
I have created two great resources for setting up profitable paid ad campaigns on Google & Facebook if you are just starting out.
I highly recommend familiarizing yourself with both of these blogs and reference them if you decide to set up your advertising campaigns yourself.
This article’s purpose is to explain when your business is ready for paid ads.
In summary, these are the requirements that would mean your business could benefit from paid ads:
- Your business has already made a few sales to happy/returning customers
- Your website and social media accounts are properly set up and purposed for sales
- You have multiple other sources of new business (Content, Networking, & Outreach)
- You have the budget and are prepared to advertise for a minimum of 3 months consistently
I see too often business owners who dive straight into paid ads to “jump-start” their business, but they learn quickly that paid ads are expensive and don’t bring in the best returns right out of the gate, especially if the above requirements are not met or skipped over.
Remember, if you have a business you should want to see the success and stability of that brand for years to come.
You have time to grow the foundation of your business and it is important that you do so first.
Once your business is established and you are growing organically, paid ads can take your business to new heights.
Written by Brenden The Marketer