3 Essentials for Selling Your Marketing Plan to Investors

Tim Berry , Founder , Palo Alto Software

29 Aug 2012

Somebody asked me in email what investors look for in the marketing portion of a business plan and/or business pitch. What works? What’s credible? What are investors looking for?

Caveat: generalizations are dangerous. And I’m generalizing here from what I’ve seen in the three dozen or so pitches and plans I’m exposed to in a year, plus my discussions with other angel investors in my group, and investors I meet as fellow judges in business plan competitions.

I see three essentials: 

1. The market-defining story

The market-defining story explains the need, or want, or why-to-buy factor, defines the target customer, leads to credible market numbers, generates the marketing messages, and communicates a market to investors, so that they can visualize it and sense it’s potential in their own imagination. It’s a story that makes product-market fit come alive. Investors don’t want to be force fed large numbers for potential market; they want to be able to imagine the numbers for themselves.

2. Believable  paths, triggers, and channels

If and only if that potential market seems to come alive, it needs credible plans to move from ideas and messages into media and concrete marketing programs with some backbone and metrics to them.

Nobody buys the hand waving at “online marketing” and “we’re going to be big in social media” anymore. For online marketing, as a common example, you should be able to talk realistically about your search engine budget, pay-per-click budget, social media experts on staff or available as contractors and budgeted into the plan, targets for page views, unique visitors, and conversions. You should be able to explain your Facebook, Twitter, and/or LinkedIn, and/or Pinterest or other social media plans in terms of numbers such as follows and followers, tweets and retweets, topics, engagements, likes, and so forth.

For physical products supposedly moving through channels, you need to show that you understand the margins through channels, the difficulty in getting through distributors with new products if that’s relevant, the process for getting accepted, and what it takes in push or pull marketing to get sell-through in channels.

For business-to-business and direct selling, be able to show that you understand the expenses involved and the sales cycle selling to large organizations.

Not all of these details need to go into the pitch with slides; but they should be in your plan, and you should be able to pull them up in an instant when asked, during a pitch, for more detail.

3. Defensibility

Investors will be thinking, as they watch your pitch or read your plan, about how easily some future competitor can jump into your marketing plans, co-opt your tag lines, jump on your topics, pre-empt your channels, and use your own marketing against you. Don’t trust trademark or copyright to defend you by themselves. A brilliant marketing plan that others can easily jump on isn’t as interesting as a good marketing plan that’s exclusive and defensible.

Conclusion: These are necessary but not sufficient conditions. Looking good on all three doesn’t guarantee anything, but looking less than good on any one of them is going to hurt your prospects to attract investors.

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