The tidal wave of growth is upon us — an unprecedented economic boom that will manifest later this year, bringing significant investments, acquisitions and customer growth. But most tech companies and startups are not adequately prepared to capitalize on the opportunity that lies ahead.
Here’s how marketing in tech will shift — and what you need to know to reach more customers and accelerate growth in 2021.
First and foremost, differentiation is going to be imperative. It’s already hard enough to stand out and get noticed, and it’s about to get much more difficult as new companies emerge and investments and budgets balloon in the latter half of the year. Virtually all major companies are increasing budgets to pre-pandemic levels, but will delay those investments until the second half of the year. This will result in an increased intensity of competition that will drown out any undifferentiated players.
The second half of 2021 will bring incredible growth, the likes of which we haven’t seen in a long time.
Additionally, tech companies need to be mindful not to ignore the most important part of the ecosystem: people. Technology will only take you so far, and it’s not going to be enough to survive the competition. Marketing is about people, including your customers, team, partners, investors and the broader community.
Understanding who your people are and how you can use their help to build a strong foundation and drive exponential growth is essential.
Tactically, the most successful tech companies will embrace video and experimentation in their marketing — two components that will catapult them ahead of the competition.
Ignoring these predictions, backed by empirical evidence, will be detrimental and devastating. Fasten your seatbelts: 2021 is going to be a turbocharged year of growth opportunities for marketing in tech.
Differentiation is crucial
The explosion of tech companies and startups seeking to be the next big thing isn’t over yet. However, many of them are indistinguishable from each other and lack a compelling value proposition. Just one look at the websites of new and existing tech companies will reveal a proliferation of buzzwords and conceptual illustrations, leaving them all looking and sounding alike.
The tech companies that succeed are those that embrace one of the fundamentals of effective marketing — positioning.
In the ’80s, Al Ries and Jack Trout published “Positioning: The Battle For Your Mind” and coined the term, which documented the best-known approach to standing out in a noisy marketplace. As the market heats up, companies will realize the need to sharpen their positioning and dial in their focus to break through the noise.
To get attention and build traction, companies need to establish a position they can own. The mashup method — “Netflix but for coding lessons” — is not real positioning; it’s simply a lazy gimmick.
It is imperative to identify who your ideal customer is and not just who could use your product. Focusing on a segment of the market rather than the whole is, perhaps counterintuitively, the most effective approach to capturing the larger market.
Stripe is the classic example of perfect positioning and flawless execution. There have always been many payment processors, but Stripe chose to focus on a key segment of the market — developers who have the difficult task of implementing the processing itself.
By aligning their messaging to this segment, Stripe became known as “payments for developers.” Any developer who had the arduous task of implementing payment processing knew that Stripe was the obvious, easiest and best choice. This single decision is responsible for Stripe becoming a $95 billion company and the top U.S. startup.
Screenshot of the Stripe website from 2011. Image Credits: Stripe
Positioning is more than your messaging; it’s also about delivering on your promise. Stripe not only created an easy, hassle-free experience for developers, they also provided detailed documentation, in-depth tutorials and unbelievable customer support. Even to this day, Stripe’s customer support is some of the best in the world, in addition to featuring technically knowledgeable support staff.
Many companies won’t survive this year despite the rampant growth, simply because they will fail to identify and own a viable position in the marketplace. But those who can establish themselves as different, unique and relevant will experience transformative growth.
Marketing is about people, not technology
Most companies and startups don’t have a technology problem — they have a marketing problem. This year, we’re going to see more companies realize the need to develop and deepen relationships with their constituents.
This will manifest itself in three distinct ways:
- Hiring key positions focused on partnerships and business development.
- Investments in influencers and advocates to drive growth.
- The return of in-person events to generate awareness.
Strategic partnerships essential to strengthening marketing. Without the right connections, alliances or access, companies will struggle to make headway. We’ll see greater development of roles that focus on establishing and deepening partnerships to gain access to new audiences, resources and markets.
Influencers and advocates are another form of partnership that many companies have completely overlooked. Activating and leveraging community members who have broad reach and strong reputations will open the floodgates for customer acquisition and lead to more opportunities.
Gumroad, an online platform that allows creators to monetize their work, has this figured out. In late 2020, they launched Gumroad University, a hub of case studies, resources and interviews with successful customers. Many of the interviews feature customers who are prominent figures and have extensive followings.
The credibility and reach that Gumroad earns by highlighting these influencers and advocates is massive and is key to giving it a competitive advantage in a crowded niche. We will continue to see more companies leveraging influencers and customer advocates to build mutually beneficial partnerships to drive cost-efficient growth.
Most notably, the rollout of the vaccines globally and the loosening of restrictions in the U.S. will culminate in the return of in-person events. Conferences, workshops and trade shows will once again be a prominent part of the marketing mix. Companies that have not yet hosted an in-person event will be keen to do so, and industry veterans will push their events to the next level. Planning to maximize engagement and conversion at these in-person events and preparing for contingencies will be a primary concern all year long.
Experimentation is essential and key to understanding customer behavior
No one could have predicted what happened last year, and we’re likely to experience more volatility and surprises. As the world reopens and the economy continues to rise, there will be no return to “normal.” The top tech companies know that one reliable way to embrace and navigate uncertainty is through experimentation.
Experimentation and testing are not new to tech companies, which use concepts like lean, agile and test-driven development. Being able to verify and validate before making big decisions or large investments provides a massive competitive advantage. But not all firms have applied the “test and learn” approach to their marketing.
New Relic is one of the few that have taken a rigorous approach to experimentation. Every time I visit their website, it looks completely different, because they are constantly testing a new design and approach to communicating the value and application of their platform. As the uncertainty continues, more companies will follow in New Relic’s footsteps and embrace experimentation within their marketing function.
Depending on the business’ size, a single experiment can result in upward of a quarter-million dollars of impact to the bottom line — and the costs are de minimis. Now imagine embracing testing as New Relic has done and constantly running experiments. That’s why I always tell my clients to follow the rule of ABE: Always Be Experimenting. Not every experiment is a success, but running experiments will enable tech companies to challenge assumptions, validate hypotheses and discover new opportunities.
Keep in mind that testing isn’t, and shouldn’t be, constrained to just websites and messaging. Every aspect of the business can benefit from testing and experimentation. While many companies aren’t currently embracing experimentation, 2021 will be the year that firms realize the potential and necessity of testing, especially in their marketing.
Video will continue to be an integral part of effective marketing
Tech companies are notorious for struggling to communicate clearly and effectively. Some new tactics seemed promising, like chatbots, but their popularity has faded as the effectiveness has been hard to realize. Video, however, provides a powerful opportunity for companies to stand out while also attracting and engaging with more leads, making it an essential part of the marketing mix.
The work-from-home culture shift that resulted from COVID-19 last year, combined with the rise in popularity of TikTok and YouTube Shorts, has made video more accessible than ever before. Thanks to endless Zoom meetings and short videos, we’re now more comfortable with being on camera and connecting with others via video.
That’s a good thing, because when it comes to marketing, it’s imperative to build a personal connection and “show, don’t tell,” which are two things video does better than any other medium.
This has lead to the introduction of many tools that aim to make using video in marketing easier and more mainstream. Tools like VideoAsk by Typeform and BirdSeed allow your website to become more dynamic and interactive by engaging your audience with videos from your team. There’s no doubt we’ll see many more tech companies find ways to leverage video this year, either to engage their audience or by incorporating it into their products.
Get ready to ride the tidal wave of growth
The second half of 2021 will bring incredible growth, the likes of which we haven’t seen in a long time. Tech companies need to prepare adequately and take appropriate actions now to adjust their marketing approach.
It starts with having a clear, powerful and defensible position in the marketplace. Building on top of that foundation, companies must develop a strategic approach that will enable them to think beyond technology and focus on the relationships that will propel them forward. Video will be an essential part of the marketing mix, but there is still plenty of uncertainty. Embracing experimentation will allow tech companies to manage this uncertainty by learning, adapting and thriving.
The past year may have been unprecedented in many ways, but the remainder of 2021 will be exciting, tumultuous and rewarding. Get ready, hold on and enjoy the ride.