
Archive for the ‘Marketing’ Category

People still buy from People

July 29, 2010

The marketing, sales and PR mix has been rapidly changing over the last few years. Today, customers are hearing about and evaluating suppliers in different ways. With so many channels the traditional marketing techniques such as TV advertising are no longer working so well. The growth and ease of the Internet has meant there’s less of a need for sales people. Or at least a need for a different kind of sales person and PR message, using social media to get to know customers.

Would you Trust Him? (Danny Devito in the Roald Dahl movie Matilda, 1996)

However, even in this brave new on-line world, the old adage ‘people buy from people’ remains true. Customers want to like who they are buying from and feel that they can trust them. “People ultimately judge only one thing about you: the way the engagement makes them feel”. – Seth Godin. “People don’t buy for logical reasons. They buy for emotional reasons”. The challenge is trust is not quick and easy to gain and it cannot simply be bought.

Customers are no longer listening to the megaphone PR and marketing approach. They now prefer to research themselves and share advice with each other. PR and marketing now pays an increasingly important role as a salesperson. More than ever before PR and marketing has to develop that all important trust. However, how do you trust in a faceless message and person you don’t know.

Blogs and micro-blogging now brings a new way to understand and get to know someone. But it has to be real!! A website has to pre-sell and become a friend.  The question is: how can you trust a blogger or a company website/blog? From all that I’ve leant to become trusted, a blogger needs to be consistent, open, professional and show integrity. Honest as Seth Godin says. The only way is to be real on-line! The draw back with social media is that it takes lots of time and persistence to build social capital (as discussed by Ryan Carson). But then sales take time too – with 8% of sales people get 80 per cent of the sales because they are persistent!

However, I believe for the individual and company to gain credibility, reference points also need to come from other trusted sources. This still relies on traditional channels including independent editorial reviews, peer reviews, customer endorsements, etc. These references remain powerful in an increasingly online world because they are persistent and can be found and discovered by the new clients rather than pushed at them.

People do still buy from people but the process is changing. Blogs, mico-blogging (Twitter) and video’s bring a personal touch to marketing and PR interaction but conversations have to come from the heart. Recent case studies are now showing that Social Media Is The Major Contributor To Lead Generation. So, if you want and need sales as most of our companies do – get blogging, tweeting, videoing right now!!

Going for Business & Tech Awards

June 30, 2010

There’s lots of local, regional and international Business /Tech awards around (Ernst & Young, Red Herring, TechCrunch50, UK IT Industry Awards, etc). Some cost alot to enter and some only a little. But are they worth winning? And how do you win ‘em..

If you not heard my startup Aware Monitoring is through to the final of a local Award competition – Nottingham Post New Enterprise of the Year 2010 Award. We’ll know this week if we’ve won.

Simon & I in the papers (click here for full article)
Source: Nottingham Post & Nottingham University Business School

I recently met David Atherton, the founder of Dabs.com, an ecommerce IT retailer. Dabs  went for a whooping 800 awards and won 200 of them! Dave said ‘they were a great low-cost form of PR and marketing.’ Most people I’ve spoken to who’ve won awards say they are worth winning because they bring:

  1. Immediate press attention – The awards organisers and sponsors tend to promote the finalists and winners to the press. Its great free PR.
  2. Knock-on press attention – Other publications will take attention if your company wins an award. They’ll want to write about you too!
  3. Confidence – The feel good factor is extremely valuable for the founders and  employees moral. Everyone is recognised for  their hard efforts.
  4. Success – Everyone wants to be a success. To be finalist or a winner shows your company is succesful, even if it’s not aways the case.
  5. Credibility – Prospects and customers want to feel they can trust their suppliers. Awards seems to bring confidence in companies.

In a talk by Doug Ashby he felt that the Awards got in the way of selling to prospects and customers. Doug has won several awards before exciting well from his Mainframe hardware maintenance business. Doug felt the awards bloated the winners ego to the extent where they take their eye (focus) of their business.

A friend of mine, Adam Harris, won the IoD (Institute of Directors) Entrepreneur of the Year Award in 2008. Adam said ‘that you have to put the time and effort into the application to win.’ Sounds obvious, but Adam said ‘most people leave completing the application until the last-minute and rush it.’ Like an important proposal  take your time and get the  applications right. Of course, you need a great story, a business with some strong successes and good writing skills to be noticed.

I took Dave & Adam’s advice and we’re through to  a local award final. Whether we win and it then goes to our heads (ego) is yet to be seen ;)

UPDATE:

We won! Amazing!! It was a truly fantastic evening. We did well to win our category against stiff competition. For our ‘Aware Monitoring wins Award’ company post on the win, click here and for the full Nottingham Post write-up click here.

Startup Opportunity Identification 2.0

February 18, 2010

The difficulty with customers is that they don’t really know what they want until they see it! This creates a nightmare for any startup or corporation trying to build a new product – What do you make that people really want and are willing to pay for?

To find the answer startups have to commit to an idea and  move quickly, and cheaply  through to a Minimal Viable Product .  You are looking for a ‘must have” product. This  requires continual iteration around customer needs. The ultimate test is  getting customers to profitably pay for your solution i.e. a higher lifetime value of a customer to the cost of customer acquisition.

We’ve had three product ideas in our startup before we found the one we’re working on now. Creating a new startup product moves through three successive stages starting with ideas development and finishing in a successful product/market fit.  Currently our startup is trying to get to product/market fit.

Last  week I gave talks to MSc and  MBA Entrepreneurship students on identifying entrepreneurial opportunities (above deck) based on these three stages:

  1. Ideas development – We spent a  very long  time researching and looking for the killer idea. We were trying to find the perfect opportunitya gap in the market between existing suppliers in a new growth market. We went round and round in circles looking for the perfect opportunity. In the end we ditched our first real idea because the customer ROI was weak in the economic downturn. We then,  much more rapidly, came up with lots of new  ideas and committed to one – external website monitoring. Unfortunately research takes time and as a startup without revenues you don’t have time. You have to commit to an idea even if it’s not perfect -  NOTE: there will always be competition!
  2. Product development & release – Without perfect knowledge on customer needs and competition you have to make many product  assumptions. Right from the  start  we were testing our assumptions with potential customers at network events, in meetings, online and during our Alpha/Beta. It’s not easy to get real answers without a shiny product to sell.  A prototype helps. You have  to rely on your gut instinct. During  this feedback we switched our app from internal systems monitoring to external web monitoring. We found potential customers more receptive to this offering. This early engagement process also helped us to develop our sales messages, sales funnel and  go-to market strategies.
  3. Market/product fit -  If you’ve made it this far the really hard work starts.  You’re now looking to make your product a ‘must have’. The challenge is its very hard to be heard by potential customers. You’ need to get the product in their hands! Only then can they make a true judgment on its value. They’ll also compare your product to  substitutes and alternatives in the market. You therefore need to differentiate and deliver a much better product to get them to change! The sales message and product needs constant refining until you have a measured product/market fit. Only the can you pull the sales trigger.

As startup founders we think we know what customers want and the problem they want solving the most. Unfortunately we’re probably wrong. We then  waste huge amounts of time building a product around that  perceived need. It’s hard for many founders to admit their ideas, product and dreams are incorrect. The ideas which formed the startup were based upon a assumptions.

You have to know when to quit an idea, re-form it or find a new idea as assumptions are tested.  Flickr (started as on-line games), Youtube (Hot or Not) and Blogger (project management) are all great examples of product ideas which iterated to a different final product. As startups we don’t have the comfort of time and must move rapidly through an idea, production and iteration. Unfortunately non of this guarantees success but it sure helps!

Valuing an MBA in a startup

February 3, 2010

Over the last week there’s been alot of talk questioning the value of having an MBA in a startup – Giff Constable, Rob Chogo, Jon Steinberg, and Charlie O’Donnell (All stateside and non of whom I know). I’ve an MBA in entrepreneurship, 20 years tech business development experience and now a startup. In my experience an MBA does not teach anything you don’t  already know or can work out for yourself. However it does say something about you as a person. Unfortunately this counts for squat in a startup.   As in sales and in a startup you are only as good as your last months or quarters sales.

“Reach for the sky!”

Why do an MBA?

From my experience meeting other MBA’s Jon Steinberg summarizes  really well why people undertake the MBA:

  1. Value in building a network
  2. Credential – certain employers require an MBA for certain jobs
  3. Need a break from work
  4. Career change

For me it was about adversity, learning and change. Adversity has been shown to be the number one  driving force for successful entrepreneurs. I don’t have a first degree and dropped out of  college. I’d been stuck on an educational ledge ever since. Some of my close family and friends strongly advised me against doing the MBA, particularly in entrepreneurship. Yet it was one of the best years of my life. I loved every MBA minute!

Experience v’s an MBA

During my tech career I’ve built significant profitable customer bases three times from scratch. It ‘s been an amazing experience with great highs and the occasional low.  In my last employment I grew a remote managed services business unit  into a highly profitable multimillion dollar Global business winning customers like Richard Branson’s V2 Records. Building customer bases from nothing is not easy. I’ve found building a company even harder.

There is much an MBA does not teach you. It does not show you the many practical skills needed in business. In particular skills like sales, marketing a small business, attracting resources – the list goes on..  There are  so many skills needed  to run a startup.  Given the choice real small business experience wins hands down over an MBA in a startup. However sometimes we forget that an MBA is an academic qualification. I’ve found that my MBA  has brought value to our startup.

We like difficult challenging times

Some of us perversely put ourselves into difficult and challenging positions where the odds are not good. It’s often not a comfortable place to be. However we keep going back there! The MBA is deliberately tough. It was challenging for me not having the educational experience and understanding from a first degree. The first semester was the hardest. Its like a bootcamp. They give you too much work. It was an especially hard as my mother was diagnosed and died of cancer during the first semester – all part of life and doing an MBA!

Does an MBA bring value to a startup?

After so many years at the practical coal face of business development the MBA has definitely helped me see things differently. I now look at decisions more objectively. It has brought a greater understanding of internal business structures and holistic competitive markets. Was it worth the $10,000′s of dollars it cost? Plus all the living costs and lost savings -  probably not. Would I make that decision again to do it – defiantly!

An old serial entrepreneur friend of my said that ‘a startup is an MBA of life.’ And he is so right. Nothing can prepare you for a startup. It is unlike anything I have ever done. It messes with your mind and body. We all know you didn’t need an MBA to start as business. So why do it? For me is it’s about exciting new adventures where you push yourself to the limit and learn new tricks. This could be doing an MBA, starting a new challenging job or having a startup. Keep learning and pushing your own boundaries. Life is boring otherwise. And why have a boring life! You only have one of them ;)

Yeah I know I’ve got an MBA, so I’m bound to be a bit bias. However on balance I highly recommend an MBA for those that have something to prove and love challenges. If your heading to startup ville and not moving up the career ladder in the same company an MBA will probably set you back. It will cost you lots of money and if your doing it to change career will put you back years. But these are  good things. They keep you fresh and hungry. It’s the learning and personal growth that really matters.

Startups: Obsessing about your competition

January 29, 2010

Competition is a good thing. It’s shows there’s a market and “it keeps you on your toes”. However its very easy to become completely obsessed with your competition. An obsession, particularly one which dominates your thinking, is never a good thing. It ends up wasting time, energy and is very frustrating. The thing really to focus energy on is understanding and adapting to your target customer needs.

Its so easy for startups to become completely obsessed with many aspects of the their competition:

  1. Price - Since the Web everyone can see each others published pricing. There’s pressure to be cheaper than your competitors because customers can so easily compare  suppliers. Remember customers don’t just buy on price.
  2. Features – The Web has also made it simple to compare suppliers features. You can become obsessed with needing every feature your competitor has. It’s so easy to forget the customer when focusing on competitors. Understand which features customers really value.
  3. Size – How many customers do they have, what is their market share, what are their revenues, etc. Becoming obsessed with competitor size is very destructive. It leads to land grab at any cost.  Remember the saying “volumes are vanity and profit is sanity.”
  4. Buzz – Being obsessed with your competition means your always waiting and watching for every piece of press on them. Great press coverage is important  but its the customers perceptions that really counts. Lots of press noise does not necessary mean lots of happy customers.
  5. Location – Over and over I hear people obsessing about location. They constantly compare the benefits of being is a different location. Usually one they’re not in. Don’t get me wrong location is important but getting hung-up over it is no help. Customers are everywhere. Focus on them.

Our startup has got more competition than you can shake a stick at! However it is vital we have competition. They validate the market need and help to grow the overall market sector through a courus of marketing messages. Competitors give a startup a known quantity to position a product against with customers i.e. ‘it’s like…’ They also bring a measure to set yourself against.

However becoming obsessed with your competition is counter productive. Forgetting about them is not a good idea either. They may start addressing a customer need which takes away your customers. In reality it is unlikely  your competition which will kill your startup. There are lots of other challenges that will do that, especially not understanding adapting to your customer needs.

Do-It-Yourself startup PR

September 23, 2009

Even with today’s social media channels such as blogs, Facebook, Twitter, etc Press Releases remain a popular  form of communication.  PR for a startup is about establishing a new reputation and trying to get people talking about you and your product. However the press are a fickle bunch and tricky to deal with. Getting a mention in a press article or story can be very valuable and worth the effort trying.

We launch our new website monitoring app to the world live on stage next week! I’ve discussed how to launch a web app before. As a bootstrapping startup we’ve needed to keep costs down. I wanted to get a PR freelancer in to help with the launch however cash is becoming increasingly tighter and so we’re running the PR ourselves.

The press are notoriously difficult to get hold of and engage with, however there is a small chance your message may get through. Doing the PR yourself has it positives. The founder’s know the product and are more passionate than anyone else.  Guy Kawasaki is positive about going it alone PR. Here’s a guide to developing and managing a startup Do-It-Yourself PR launch plan:

  1. Target audience – Be clear in your own mind who they are and be certain you know where they hang-out i.e. what sites they visit and which blogs, newspapers do they read.
  2. Key messages – Decide what they are. Some of this comes back to your marketing straplines and what the company/product stands for.
  3. Target press list – Who are you going to contact and what are their contact details. Find out what  excites and interests these journalists.
  4. Story – Develop a story that the press maybe interested in. It could be feel good, topical or a current trend. Above all the message needs to show how you are different from your competitors. Find good example press releases and learn how to write one. Here’s a useful article on writing press releases: ‘How to: write the perfect press release for journalists’.
  5. Press release – Draft up a press release based on the key messages. Also make sure you have a news and resource page on your website/blog including a range of screenshots and logo’s. Then send out your story.
  6. Pitch - Next get on the phone like crazy and pitch the hell out of your story to the press contacts. Entrepreneurial determination makes the difference here.
  7. Targets – Set some targets for your PR campaign. That way you keep focused and motivated.

Chris Lee, a PR freelancer for startups, has some further advice on managing your own PR.

Timing is also an extremely important factor. Everything including your message and press release needs to be prepared the week before your launch and press contact made during the launch week. Good luck. Your message may get through.. The press are tricky to deal with, however if you don’t try you never know. Remember “Who dares wins” ;)

What the heck is startup brand identity?

September 17, 2009

We’ve been thinking about startup branding for a while. I recently touched on branding when I posted ‘Do startups really need branding straplines?’ and concluded that top level marketing straplines embody the vision of the startup. This brings clarity of purpose, consistency of understanding and direction. It seems to me that ‘brand identity‘ is a vague and fluffy term.  However branding is not just for the big boys. It’s also great for startups. Brand identity helps brings credibility to a startups customer, investor and partner relationships.

It’s the Real Thing

Startup branding certainly isn’t anything like coca-cola with their big budget corporate brand personality. However  both big company and startup branding is about personality. Branding is very, very, very important for the big companies. It’s worth an awful lot to these giants. It is also really important for tiny little startups like our new web monitoring service. Branding sends out a consistent recurring and reliable message of what the company and product stands for. Customers love consistency. They want to know what they are going to get and they will be satisfied. This builds brand and product/service trust.

In a startup brand personality means the founder’s personalities. Like it or not its about  the founders character’s!  The startup is a reflection  the founders values, beliefs and the way they behave. Startups have the ability to be much more human and friendly than the big faceless corporations. This means startups can use their founders personalities to their advantage. They can be so much more human, personal and engaging.  This is particularly effective in the new world of social media. However startup founders need to have a clear message on what they stand for and who is their the target audience. The founders also have to live and breath the brand for it to be real.

My friend Aaron Fulkerson, the CEO of MindTouch, has taken branding
to the extreme by tattooing the company logo on his leg!!

Most business relationships, whether B2B or B2C, are based upon trust. Potential customers need to know that a supplier will deliver on their promises and they will be around in the future. The challenge for startups is  that branding and trust takes time to build up.  If the founder chops and changes  messages or brand personality too much this trust will not buildup. It takes patience and persistence on a single course to buildup branding identity. This is what makes it so valuable for both the big companies and startups alike.

Do startups really need branding straplines?

August 19, 2009

Branding straplines (also known as taglines) aren’t just for big companies or films. There also great for startups. Like a startup pitch the written word needs to state very quickly what your startup does and will do for potential customers.  They’re not as easy to create as you might think. However they are extremely important to bring understanding and direction.

Alice in Wonderland
read the label (source)

Prospective customers and partners will only give your written words a few milliseconds  to make their mind up if  your service is a fit for their needs. A strong strapline brings a clear understanding, direction and clarity of purpose to customers and employees. We’ve found that straplines are not easy to create. They take time, effort and commitment. Which is why they are so powerful and effective.

This is a good article on creating straplines.  Once made you also have to deliver on your strapline promise. Otherwise your statement is meaningless and trust will be lost. Over the last few months we’ve found some company/startup straplines we’ve liked:-

  • Invent – Hewlett Packard still remains focused on innovating. This dates right back to the time the founders made things.
  • Experience Fanatical Support – Clearly Rackspace are committed to proving the best possible support. Rackspace’s branding artical.
  • Painless Billing - Again a very clear message. This time from FreshBrooks. Outsource your billing to remove the headache.
  • You Send. They Sign. Its DoneEchoSogn’s use of the classic three short statements. Very effective on what the product does and will do for you.

The top level strapline can build out with more detail into sub messages. Freshbooks is a great example:

  1. Painless Billing
  2. The Fastest Way To Track Time and Invoice Your ClientsThis second message brings more detail on the customers pain point and how Freshbooks will save their customers time.
  3. Send, track and collect payments quickly. Great for teams, freelancers and service providers. – Reinforcing speed and who the service is made made for.

We’ve worked hard on our straplines for our startup:

  1. Aware Monitoring – What we do is in the service name
  2. The easiest way to measure website performance – We make a complex thing much easier
  3. On-demand website monitoring with actionable alerts. Share reports in your business and with your customers. – We are a SaaS service (not software) and we bring useful results which can be shared.

So far we’ve used our strapline messaging for our service blog, launch page, company Twitter and on Crunchbase. Of, course we still need to deliver on the promise.. As Charlie Chaplin said “Words are cheap.”

Straplines embody the vision of an organization, no matter how small the company is. All product/company descriptions and messages  can be derived from the pitch and strapline. Its a like a pyramid of descriptions. This structure bring consistency of understanding and clarity of purpose to potential customers and employees.

7 ways to price SaaS and Web Apps

July 24, 2009

With Web 2.0 Ad funded sites going out of fashion subscription based services are on the rise. Setting the right pricing for your SaaS and Web App service is a difficult decision. It is also a critical choice. Get it wrong with high prices and you could be losing out on sales. Running with very low prices may result in too many low profit customers.  The secret is in knowing your customers and competition.


“Haggle properly!” (Life of Brian)

The seven ways to price SaaS and Web Apps:

  1. Cost Plus – Conventional wisdom says price on variable sales costs. However this is more of a resell/retail approach. Operational costs per  additional SaaS/Web app customer tends to be very low. It’s the customer acquisition and developing new features that requires the high investments.
  2. Match the Competition – Don’t worry about the costs. Price the service the same as your competitors and move their customers across to your service.  Unfortunately this strategy offers limited differentiation and thus customers won’t move. If you don’t have any competitors check that there is a market in the gap.
  3. Undercut the Competition – Start a price war and storm the market! This may grab the attention of some budget conscious customers. Unfortunately if it does work the impact does not last long.  This strategy also leaves less money for acquiring new customers and future product developments.
  4. Price Higher than Competitors - If your service is very similar to your direct competitors charge slightly more than them. Then focus on being a quality service. However you’ll have do something much better than your competitor. Find a feature or service level that the customer really values and your competitor is weak at.
  5. Differentiate – Build a very different feature set and charge much more than your competitors. The challenge is you’ve got to have an outstanding service that fits a need. Your business message also needs to be very strong to justify the higher price.
  6. Hide Your Prices – Many modern SaaS services such as  TactileCRM and Freshbooks, etc publish all their prices. Some, like  Echosign, have a salesforce to sell the service. Others let the service sell itself. If you don’t publish your pricing your salespeople can upsell  the service levels when the customer comes calling. Pricing is often hidden this way in the corporate world of software.
  7. Segment - Offer several service level to suite different customer types. Huddle and DNS Made Easy offer and range of service levels for small businesses and corporate customers. The pricing on these service levels varies a great deal.

Like I said it’s not easy. A mixture of the above pricing strategies may be the  answer. A lot of the decision relies on knowing the market well i.e. the customers and the competitors. Choose a price strategy early on, test the market, and be flexible. A word of warning: it’s much easier to decrease prices than to increase them. Good luck!

Pitching 2.0+ : A clear, concise & complete message

July 8, 2009

It’s not as easy as you think getting your pitch/message down to a few very clear and concise words. I’m pitching our website monitoring startup again. This Pitch is part of a national Pitch competition. Click the links to see my last pitches: Understanding Pitching and Learning to Pitch. We’ve been short listed based on our application form. All the hard work we’ve been putting into our Website messaging is really starting to come through. Our message must be improving.

Churchill. Good with words.

Like a marketing strapline a pitch needs to be boiled down to a very few key words. It says what your company does and what you stand for. This message is then developed into longer pitches to include more and more detail as required. 3 second, 30 second, 3 minute pitches, etc. Its a bit like a pyramid of descriptions with the shortest and simplest pitch at the top. This structure brings consistency and clarity. Ultimately the culture of a startup is formed around the principle messages and values formed by the founders. In this way employees, customers and investors understand what your company stands for.

How we get on today at The Pitch competition is important but its not critical. Its the journey that’s the useful part. Improving, testing and refining our message is the reason to pitch. Although the £50,000 worth of prizes would be nice. This practice is preparing us and our message for potential customers. After all The Pitch panel will not be buying our product, customers will. Keep pitching – practice makes perfect ;)


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