How can Internet start-ups survive when they’re competing with the big brands? In a fair fight, the start-up will undoubtedly lose.
In the grocery market, the battle is against Tescodirect.com, which already has &£200m in annual online sales and promotes its presence at every store checkout. It has position, expertise, in-house financing, and knows its customer better than most. Prospects of catching-up are approximately zero. And doing an “Amazon” is getting harder every day.
The strategy has to be: compete where it’s cheap. Try to out-think them when it’s too expensive to go head on. From the beginning, Clickmango.com believed in great brand, beautiful site and small spend. Our investment was in the experts to help us do that – Wolff Olins for design and brand creation and Branded for positioning and strategy.
Establish brand proposition and differential from day one, then conduct research to refine the offer, build a detailed picture of the market and its needs. No offline player would ever make a move without this preparation, but many Net businesses believe these marketing rules don’t apply. Is this because so many business-to-consumer dot-coms don’t perceive themselves as consumer brands?
High profile TV advertising equals mass-market. Start selling to the mass-market and you’re a consumer brand competing for share of voice with Body Shop, Marks & Spencer or Burger King. Why then, if you have a product with niche appeal, in a competitive and well-financed Net market, would you rush into this kind of serious spend? It’s a quick way to burn through the finance which is increasingly hard to find. The brands which are out in front of consumers have spent their sizeable but short-term marketing budgets saying, “We’re a Net business”. To which the consumer responds: “So what?” Instead, the message must surely be, “We’re a health or a fashion or a travel business”.
Leveraging public interest in your market space is key. Word of mouth is better than any above-the-line blitz.
In fact being a lean, dynamic and young operation means that you can punch above your weight, be opportunistic, and more creative. Whether that is PR, promotion or viral activity, cost-effective marketing is the way forward.
Spending money on TV advertising is good for the ego, but the big brands will always be able to outspend in the end.
Toby Rowland is chief operating officer at Clickmango.com.