Start-Ups and Public Relations

Almost every start-up firm tries to increase its sales. However, convincing more customers can be a very difficult task. It is common for start-up companies to have significant marketing budgets. However, most of the budget is utilized for direct marketing. There are very few start-up companies that believe that public relations can help them achieve their objectives.

There is a common perception amongst many start-up founders that public relations can be quite expensive and hence are a luxury that only large companies can afford. They believe that a small upcoming business simply does not have the resources required to indulge in public relations activities. However, this is not the truth. The reality is that investing in public relations can be very beneficial for a start-up. There are several start-up companies that have benefitted from this approach.

In this article, we will have a closer look at how start-ups are impacted by public relations activities.

  1. Public Relations is More Effective than Advertising: Empirical studies have repeatedly shown that consumers are more likely to choose a product that they have read about in a publication as opposed to a product whose advertisements they have been exposed to.

    Publications, TV channels, and even Instagram influencers carry a certain amount of credibility. When they endorse a product, consumers are more willing to buy them. This is the reason that public relation turns out to be more effective. It should be used in conjunction with other marketing efforts. Public relations creates a sense of familiarity which is important for people when they make a buying decision.

  2. Public Relations is Cheaper than Advertising: Another reason why start-ups should explore public relations is that it is much cheaper as compared to advertising. Advertising requires the company to buy prime spots on media which can be quite expensive. However, public relations exercises can be done in a targeted manner.

    The company can choose publications that are widely read by the target market. Also, with web-based public relations, it is possible to accurately direct the efforts to the intended audience. This reduces wastage and helps the start-up founders get more bang for their buck. If a portion of the advertising budget is spent on public relations, it tends to improve the effectiveness of the entire budget.

  3. Public Relations Helps Attract the Right Talent: The benefits of public relations are not limited to the marketing department. Many companies have observed that their public relations efforts play a huge role in helping them attract the right talent.

    Just like customers, employees are also more comfortable building their careers in a company that is familiar to them as well as their peer groups. Attracting the right talent is vital to a start-up firm. Hence, if public relations helps them achieve this goal, they should be willing to invest more in it.

  4. Public Relations Helps in Raising Funds: In a lot of cases, public relations has helped founders raise funds at high valuations. Under normal circumstances, companies have to find investors directly or using the services of an intermediary. However, many start-ups which undertake public relations activities have been approached by investors directly.

    There are many investors who scour through these publications looking for their next investment. Public relations helps the founders reach a wider investor audience which in turn helps in raising more funds easily and at a better valuation.

Best Practises in Public Relations

Now, since we know why start-ups must invest in public relations, it is also important to mention some of the best practices which have worked for start-up firms in the past.

  • Partner With Other Start-up Firms: A public relations story is successful only if it is newsworthy and appears to be genuine. This is why big companies are able to utilize public relations better.

    When it comes to start-up companies, their actions are generally not newsworthy. Hence, if a publication emphasizes too much on the article, then it appears to be motivated by vested interest. However, if the same publication writes an article about start-ups and mentions the company amongst a few other start-ups, then the article seems to be genuine and gets a better response from the audience. Hence, start-up companies should collaborate with other start-ups to share public relations activities with. This helps all the firms benefit.

  • Invest Periodically: Another rookie mistake is to expect a couple of articles in the newspapers to radically change the sales of the firm.

    It needs to be understood that public relations are an attempt at image building. This happens silently in the background and results show slowly, that too, if the activity is continued for a long period of time. Hence, start-up companies must start public relations activity only if they can sustain it for a long time. If they run out of funds after articles in a couple of publications, then the activity will be incomplete and odds are that the money invested is likely to get wasted.

The bottom line is that public relations are a very important tool in the arsenal of the start-up founder. However, due to preconceived notions, start-up companies often ignore or underestimate their potential. However, it would be advisable for the start-ups to invest strategically in public relations activities especially if their peers are not doing the same.

❮❮   Previous Next   ❯❯

Authorship/Referencing - About the Author(s)

The article is Written and Reviewed by Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to and the content page url.

Startup Finance