Let’s start with several questions first:
- How large is the organization to date – 5 people, 50, 500, 5000?
- Is it a bootstrapped startup, an SMB, or an established organization?
- Do you sell locally, on traditional media (newspapers and radio), or internationally?
- Do you aim for B2B or B2C clients?
- Are paid ads a better starting point or you’d rather shoot for inbound marketing?
- Do you sell products or services? Physical or digital?
- How long does a traditional sales cycle take?
Selling candies locally to kids in a cornerstone shop is quite different from organizing events and webinars, and creating complex funnels for B2B deals.
With that in mind, you need to define your marketing strategy. This entails the SWOT analysis, your buyer personas, the buyer’s journey, mediums you’re about to start with, strategic activities to engage with, and the corresponding roles you need for the job.
Small businesses traditionally start with a single, T-shaped marketer handling different activities and experimenting with 3–4 channels at a time. Once one of them picks traction, they hire a marketing assistant who handles this activity.
The first (more experienced) marketer invests in training, continuous experimentation, refining the workflow, and exploring the next activity eligible for a full-time hire.
Needless to say, this requires sufficient marketing expertise – figuring out where your audience is, what works for them, how to boost conversion rates, and designing effective marketing funnels.
How Most Companies Structure Their Own Marketing Team
In my experience, 80% of the businesses out there start in one of the following ways:
- One of the founders wears the marketing hat over the first months/a year, identifying potential venues worth investing in.
- A marketing assistant is hired to sift through the data and play around with different techniques studied at the university (and read across the forums).
- Accidentally finding a successful source (through referrals, a marketplace, an on-site venue) that requires a full-time person to handle logistics.
- Hiring a marketing agency on a retainer for at least a year, in which they build the entire marketing strategy from scratch, defining the complete workflow and tackling certain actions.
We usually work with businesses generating anywhere between $5M and $100M, with some enterprise exceptions with revenue exceeding $10B.
In case we take on a client making under $5M, we usually advise on hiring one or two marketing assistants on-site. They can handle the day-to-day management and data analytics, as well as time-consuming tasks that:
- Take a lot of time and research, thus costing more if we handle them.
- Require internal know-how – newsworthy activities for PR or detailed product updates to be gathered by the product/tech/creative teams.
Larger businesses prefer to put us in touch with team leaders since it’s more efficient. From a financial standpoint, smaller brands see the rationale behind hiring someone to manage the process internally (while strategy and high-end activities are tackled here).
There are different ways to build a marketing team. You can start with an agency and slowly build the team in-house. Or hire a marketing director/VP of Marketing to build your team internally.
The remaining 20% of the businesses mentioned above start by outsourcing specific activities to different agencies – SEO, content, creative, strategy.
More often than not, they decide to bring this in-house or outsource to one agency (reducing the communication overhead and lack of sync between vendors).
Building a Marketing Team: A Startup’s Guide
I have recorded this video to help startups build their own marketing teams. Watch this video and be guided accordingly.
You may also go over the transcript below if you prefer to read it instead.
A lot of people have asked me what’s the best way to build a marketing team. I’ve also been talking to a bunch of small businesses and some startups that don’t have marketing teams on site.
Some reach out to us for marketing services and more often than not, I’m saying: “Look you’re not ready for our services” or, “this is not the best time to do that”, or “this is not the best model to do that for your specific business.”.
Some of them say, “Hey I’m going to just hire a couple of people and let them do the heavy lifting for the business”– to which I respond, “OK, so do you have any idea what you’re about to do with your business and your marketing services accordingly?”.
You may have a business, some form of a channel that’s working, and a business model that appears to be converting—for the time being—that you want to scale. But who’s to say that those new channels are going to work? How are you going to set those expectations, and how to keep attracting people to your business?
Some startups have marketing co-founders, or a founder who is well-versed in marketing, or a team who knows how the marketing funnel works, and so forth. This is fine. But for those businesses that don’t really have any experience with marketing, it’s a bit tricky.
They hear a lot about advertising, PPC, Inbound Marketing, Press Releases, branding, and other marketing strategies, but they don’t know how to put them to use.
They don’t know how to invest in them. So, here are a few thoughts from me.
First off, we do offer marketing retainers as a part of our HubSpot inbound marketing partnership. But, we’re not really as efficient for small businesses and we can’t really provide value for a business that is just starting out unless they already have some traction and some strategy for a very good reason.
Our standard marketing retainers are about $5,000 a month which is about $60,000 a year. It is fit for a small business that has just started out and generates $100k to $150k in revenue.
We take almost half of their entire revenue. We can’t really reduce the prices of our services if we’re about to offer some actionable advice, and some strategy, as well as content and campaign management.
We also work with HubSpot. We expect our clients to sign up with HubSpot in order for us to leverage their dashboard and create some smart content. They can either pick the $250 a month plan or about $3,000 a year, or the $800 pro plan which has a bunch of other features for $10,000 a year.
So it adds up to about $70,000 a year which is almost over 50% of the entire business’ revenue for the year. We are not even talking about profits and we are not even including our founder’s salary, other employees, software tools or hardware, and whatever they actually use to run their business.
We generally try not to work with businesses that generate under $3M of revenue. We work with some to generate between $5M to $100M of revenue and then it makes a bit more sense if we can even sell our larger packages which are about $10,000 a month.
But I have read a bunch of studies on Entrepreneur, Forbes, and Inc., and I have compiled some data that marketing freelancers generally charge between $50 to $100 per hour. That adds up to 50-100 hours of billable work if they’re about to charge that very same amount. That is what the market dictates, which is similar to what we are offering.
So think about one single person. If you are moving from an agency to a freelancer as an alternative, hiring one single person who’s working half time, about 80 hours a month, on your business, what should they do for it?
They have to start creating a marketing strategy, analyzing the audience, and running a bunch of tests. They have to plan the content marketing strategy. They probably have to invest a bunch in ads and testing different funnels. Then, they start creating different steps of the funnel, the email list, and do some affiliate marketing.
There’s a lot of work for every single business that could be put in. And more often than not, that time simply has to be spent. So again, we spoke about an agency and the agency’s expenses. We also spoke about freelancers. Because again, 80 hours a month for a freelance consultant, or freelance marketing consultant, roughly is going to cost about that much.
And they don’t necessarily know how to adapt the strategy because with an agency, at least you’re getting a bunch of people to do creative work, content marketing, SEO or PPC, or whatever it is. At least, they have to do it well or so they say you know agencies like mine. And the other option, of course, is just hiring a couple of people on your team.
But then again, they’re going to be general marketers, marketing assistants, or just marketing in different divisions, like content marketing, affiliates, or whatever it is. They can execute and they can do stuff but they don’t really have the concept or strategy.
You can hire strategists. But those are not the people who really enjoy doing any work whatsoever. The best possible model and the best thing that you can do is just either find a marketing co-founder who’s going to run marketing for you and then hire their own team or VP of marketing or a marketing director who can hire a bunch of people for different purposes.
It can be very challenging because first, you need to hire the best guy possible and trust them with the entire marketing strategy. You can hire another five people or more to deal with different things. You may hire content writers or SEO strategists, experts on PPC, email marketing, and a lot of other specialties.
What we normally try to suggest to companies that are reaching out to us for marketing advice is to work solo on marketing until you reach approximately the first $1M. This means that it is important to try to figure out marketing by yourself first or try to hire an assistant.
Allocate at least 10 hours a week to just put your assistants on assignments or work with a marketing consultant who can advise you on strategy so that you can at least experiment in a cheaper way. You can also hire a freelancer for part-time work. Try to at least get to $1 million in revenue. That is the first step.
In other words, until the first million, try to find cost-effective solutions for your business. Bigger agencies and marketing consultants are usually effective for high-scale businesses. If you do $10 million in revenue and a consultant can basically grow your business by 20% next year, there is going to be a $12-million business. So, you earn $2 million dollars in revenue thanks to that consultant. You can even pay them $100k, $200k, $500k for growing your revenue by $2 million. Businesses with $100 million dollars in revenue can convert at 5% and that’s still $5 million dollars in revenue.
So, you get the gist of it. For smaller businesses, this is not the case. Hustle until the first million or work with an assistant and hope that you’re not going to burn the money and then work with an agency.
Again, my suggestion, and this is the best case starting scenario, is to work with an agency for a certain number of hours like 80 hours and they hire one or two marketing assistants. And, when you grow past say $3-5 million, if you have some marketing expertise already, then you can hire someone who will be in charge of marketing and who can play the role of a marketing director or VP of marketing.
And they hired the people on your team. Until then, try the different combinations. Try not to invest a lot of money into expensive endeavors that are suitable for larger businesses.
But also try to be smart about what sort of things you’re investing in because again, you can spend both your time and the time of your assistants and the money or both on activities that are not really productive.
This is where a marketing consultant may be a good fit—Just helping with direction and with experimentation until you pick up some traction and can afford to reinvest further.