How Startups Can Get The Most Out Of A Reduced Marketing Budget

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Marketing is a complex and volatile field that requires the integration of a range of strategies to truly be successful

As markets become more saturated, startups are looking for ways to strike a balance between making adequate expenditures yet not sacrificing the cash they need for other needs

One of the most untapped and inexpensive marketing channels in existence is Word-of-Mouth (WoM) Marketing through User-Generated Content (UGC)

Indian startups are staring at falling valuations and a slowdown in funding with VCs advising founders to conserve cash and prioritise profits over hypergrowth. This winter is also freezing advertising expenditure and marketing budgets. Whatever capital they have is being deployed a lot more judiciously as compared to last year when startups contributed around 11% to the overall advertising and marketing budget as per industry estimate.

However, unlike established brands and industries, startups cannot afford to stop investing in brand building and sales either. They need quick results as that will help them raise more funding. Quick results are only possible if the brand is aggressively marketing itself. Now, more than ever is the best time for businesses to switch to more affordable but equally (or even more) impactful methods of reaching consumers. 

Marketing On A Reduced Budget

As markets become more saturated, startups are looking for ways to strike a balance between making adequate expenditures yet not sacrificing the cash they need for other needs. This new development has put a lot of brands under distress, almost always resulting in the same question, “Does my brand really need an influencer/celebrity endorser?’ The answer is a firm NO. Even if you are trying to cut costs and talk to millennial or GenZ consumers in the top-tier cities. Here is why. 

A brand’s reliance on celebrities and influencers leads to them only interacting with a limited cluster of consumers. Not to forget the massive fees most influencers and celebrities charge and the extra burden of coordinating large campaigns. Additionally, most influencers/celebrities are overexposed to endorsing multiple brands simultaneously, thereby diminishing their novelty factor.

Finding A Better Alternative 

One of the most untapped and inexpensive marketing channels in existence is Word-of-Mouth (WoM) Marketing through User-Generated Content (UGC). This marketing channel relies entirely on the one resource that most brands already have in abundance — a large and dedicated user base across social media platforms. 

WoM marketing occurs when a brand wows a customer to such an extent that they tell their peers about it on digital mediums. Brands can also encourage customers to publish positive testimonies through reward programmes as a way of showing their love and appreciation for their customers. By putting the brand’s satisfied customers in focus, a company has the opportunity to mobilise its consumer base and create active followers who will willingly share their content. 

This type of marketing also creates a byproduct, User-Generated Content. UGC occurs when brand advocates generate original, brand-specific content and publish it on social media. In an age when the public craves authenticity and a personal connection with brands, UGC serves as an ideal solution. By showcasing their products in a real-life context, UGC allows companies to engage with their audience in a meaningful and reliable way — all free of cost.

The advantages of tapping into this well of consumer advocacy have been well documented. Research has shown that 92% of online shoppers trust feedback on a product from friends and family over any marketing material produced by a brand. Similarly, UGC is seen as 35% more memorable and 50% more trustworthy than a brand’s own social media content. They have also proven to be cost-effective, attract high-value customers, enhance product innovation, and boost sales despite an economic downturn.  

Uncertainty Calls For A Multi-Pronged Marketing Strategy

Marketing is a complex and volatile field that requires the integration of a range of strategies to truly be successful. As the current economic situation is new to many marketers, it may be overwhelming for many. However, there are several tools in the market to help brands resolve advertising and marketing troubles. 

Brands need to understand that their advocates are their best billboards and their most underutilised asset. WoM and UGC have emerged as effective tools for companies to use to achieve long-term goals by orchestrating marketing campaigns that promote conversations and incentivise consumers to participate in a brand’s growth.  



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