Ask HN: How much to spend on marketing?
Hi,
I am working on a new startup - eCompuCloud.com and I can't really determine how much should I spend on marketing?
For example, if I will spend $1000/mo on operating the business, and expect $1000 net profit - which means we must generate $2000 revenue.. how much to spend equal to the cost of operating the startup? Is it vague a little bit?
8 comments
[ 13.6 ms ] story [ 458 ms ] threadI would think you should first determine the ROI for different types of marketing and using those figures, come up with a game plan for how much to spend where. To some degree your marketing spend should drive your revenue.
I think it would be definitely worth is to study common growth hacks as well.
What exactly is your product? I work on OpenStack (more technical and knowledgable than your target market) and reading your homepage, I don't understand what exactly you provide.
My product is just the same computing cloud service provided, but aimed to be for home and small businesses, so they can host their websites and apps easily on the cloud without any technical background needed.
Home and small business owners want to know how your product is going to make them more efficient. Your sentence above is a pretty good draw. Try not to use the word "just". You have a unique value proposition, right? Don't downplay your strength. Selling is no time to be self-deprecating or overly humble.
"Access the Power of Computing with friendly user interface in a few minutes!"
What does this even mean?
"Cut your costs by up to 70%! No contract or annual payments! Simply stop or resume using the service according to your needs!"
What costs? Marketing? Technology? Personnel?
Its reliable.. its scalable.. you pay only for what you use without any commitment.. and its very, very cheap.
Sure, you can scale when it comes time to it but the intersection of people looking for scalability and very very cheap hosting in the SMB arena is small.
Here's my experience (by YMMV):
SEO FTW. It's incredibly sustainable once you set it up as you have some high fixed costs but close to zero marginal cost to acquire a new customer.
Blogs. Write your own blog of tutorials on HOW to set up smaller websites. Make it as easy as possible to follow (check out ScreenSteps - http://www.bluemangolearning.com/screensteps/). Share this knowledge for free. Cover systems other than yours. These will provide you with a large bump in traffic of people looking for help. You'll convert about 1% of them (or slightly more if your pitch is really good).
Experiment with AdWords and Facebook. Both will give you $50 to $100 to start ads with. See what works. Find keywords that represent your target customer and see which ones work. If you have a quality score below 7, drop the keyword. See if it's driving customer and what your cost of acquisition is. Adjust accordingly.
Email newsletter. (See also: blog). Offer a free guide to setting up your website to anyone that signs up for your newsletter. Email out tips and tricks on websites (CSS, JS, plugins, or even just cool designs, etc) once every two weeks. Have a small pitch at the bottom about your company. It's not about the marketing here - it's about engaging your audience and building trust with your brand.
Just my two cents.
Traditional PR (newspapers) can provide big boosts in traffic (or hardly a blip) and are difficult to track.