Generating demand starts in the design phase

People often ask me how they can generate demand for their product or service. Truthfully, there is no cookie-cutter approach that works for every type of business other than to be completely customer focused.  We don't really "sell" anymore as much as we do is facilitate "buying."  By facilitating buying, I mean that as an entrepreneur your main job is to create a product that adds value to a crowded marketplace.

Customer engagement arrives in a variety of ways.  Building something people really want or need is the best way.  Building a better (often much better) mousetrap is another way.  Most people (and businesses) appreciate tools that make their lives easier.  Responding to needs in the market is a shortcut to revenue.  Building something for a niche market, or building it because you think it's a good idea is a bigger risk.  If you are raising venture money, you can be certain that investors will be asking about your total addressable market.

Be an observer of what works and what you find engaging in the marketplace.  For example, implementing a CRM solution just a few short years ago was something of a nightmare.  It was expensive, required a number of IT personnel and the business stakeholders had to be able to define what they wanted.  Have you ever sat down and tried to define your wish list for a product?  It's not easy and often you don't truly know what you want until you see what you don't want.  In fact, all of these issues have carried throughout the software industry as long as we've been building software.

Along come the clever folks at salesforce.com and they decide it would be a lot better if all of this important technology could be stored in the cloud and that their clients could focus on making money.  Salesforce.com can be implemented quickly and still tailored to the unique needs of most businesses. They now own the market for customer relationship management.  They've also engineered it to suit all the users of the platform -- managers get the reports they want, and it's easy for salespeople to use.

As you design your next offering, remember the best way to generate demand is by ensuring your products or services improve tasks your clients undertake every day.  

Marketing 101 - The Discovery Process & Understanding your Audience

I'm fortunate to be surrounded by exceptionally talented and brave people that don't just think up great ideas, but execute on them.  Each of my entrepreneurial friends has a special set of talents that makes them effective experts in their chosen field.  I am always happy when asked for advice on things outside their area of expertise.

The most common conversation I have with my entrepreneurial friends involves how to market their products and services.  If you google "small business marketing" or "startup marketing" there will be so many conflicting opinions on how to approach small or growth business marketing.  I am often contacted by my friends to validate what the last vendor they talked to told them.

As an entrepreneur, I'm sure it's not lost on you that there are vendors of everything you can imagine from buying links on "link farms" - (don't do it), yellow pages, guaranteed lead programs and on and on.  Knowing when you need a service or technology and how to leverage it is my area of expertise.

The easiest way to sort out what to do to effectively reach your audience is to do a bit of discovery on yourself, your audience and your competitors.

- Who is your audience?

In order to figure this out, examine your best customers.  Where did you find them - or did they find you?  What does their online footprint look like, or are they online at all?  Are they traditional media consumers or do they live in the social cloud?  Are there additional audiences or markets you can reach that look like your ideal customers?  I like to do this exercise on a white board or giant piece of paper.

If you don't have customers (an audience) yet, stay tuned for an upcoming post on getting your first clients.

- What are your competitors doing?

I am amazed that many entrepreneurs are unaware of their competition.  It's never a good idea to take a knife to a gun-fight so spending some time getting to know your competitors is always a worthwhile exercise and can help you position your company more effectively.

If you are being outspent from a marketing perspective and you can't compete with deep pockets, find the place you can compete.  For example, position yourself as an expert and share expertise to build your following.  If your competitor is hard to work with or their pricing model is inflexible, be the vendor that is easy to work with and flexible.  If your competitor has a wildly popular offering, find out what segments of the market they are not serving and see if you have a fit for that audience.

Once you understand what your competition is doing and who your best customers are, it's much easier to strip away unnecessary marketing activities and focus your attention in the area where it will make the most impact on driving revenue.  Yes, revenue.

- On Message

I'm often asked about building a brand and how much emphasis is needed on that.  It is critical to develop understandable messaging and be consistent with it.  People are only confused if "who you are" changes constantly.  You have to give your messaging enough time to gel, and sometimes your best clients will end up repositioning you anyway.

For example, someone I respect greatly started a very nice fashion blog and styling service and her customers insisted that she extend her services into room styling.  If she had stubbornly held on to her original brand idea, she would not be able to exercise her considerable sense of style outside clothing, shoes and accessories.  http://feliciabiggins.wordpress.com/author/feliciabiggins/  This is how you grow a business, she's not off-message at all, just extending her talent into related areas.  (Smart lady.)

So, my advice is position yourself and message very clearly, but don't be so married to your brand that you're inflexible.  With respect to your brand, it's actually your "brand promise" that's the most important aspect of your messaging.

For a great example of messaging a brand promise, check out www.koreyhowell.com.  Korey is an amazing business headshot photographer in a sea of photographers, but she has so finely crafted and executed her brand promise of a great business headshot, that she has a steady stream of business.  What are people most concerned about when getting a photo taken?  Of course, it's that the photo won't turn out well and it will be a stressful experience.  Korey is so good at what she does, she can guarantee you'll get a shot you love.  Brand promise.  I can only imagine how much of her business comes from referrals.  I've probably told at least 50 people how great she is.  Combine referrals with a well-placed Groupon, social media, a light outreach to the local corporate community, and her marketing is done.

- Cost

I'm the type of marketing person that actually tries to talk people out of spending money, unless I know it will drive revenue.  I am constantly talking startups out of spending money on yellow pages ads, paid search and other techniques that can quickly drain their reserves.  The next few posts will be around leveraging the low cost channels at your disposal and how to achieve the big company results you want on a shoestring budget.  Generally, my only exception to startup frugality is when you have VC money, a game-changing product, a small window of opportunity and the need to build massive market share quickly.  That situation requires a different strategy.

While waiting for the next post, go for a styling consultation, get a new headshot and check out some of the links to the right - these are bloggers and companies I find extremely valuable for start up companies.

Adventures in Business to Business Cold Calling

Regardless of what you sell, you need to reach the right audience.  As a startup, you probably need to do that as inexpensively as possible.  You build a website, start a blog, sign up for Twitter and create a Facebook page... but it's a slow process to build critical mass and you'd be right to feel a strong sense of urgency about generating revenue.  This is generally the time when you start buying lists and the sales force is told to cold call.

I believe B2B cold calling can work.  I've seen it work.  I've witnessed cold calls that launched a sales cycle that eventually turned into multi-million dollar contracts.  I've also been on the receiving end of hundreds of "crash and burn" sales calls.  On average, I get three to four "crash and burn" sales calls per day, and those exclude the ones that were filtered before they got to me.  Even when I may have a legitimate interest in saving money on office supplies, when the cold call is so bad, I quickly decide your company is not worth my time.  Think of a cold call as a blind date.  You need to make a good impression.

The problem with cold calling is the approach companies (or salespeople) take to it.  I would rather have a salesperson make three good calls a day than a 100 blind, misinformed and mismatched attempts.

Anatomy of a bad cold call.
 - Not knowing who you are asking for.
 - Lying to get to the person you need.
 - Mumbling, bad grammer, giggling and other bad telephone behaviors.
 - Not understanding the business you are calling.
 - Not valuing the time of your "target" by making sure you have something of value to offer.
 - Underestimating the intelligence of your target, their inability to do a Google search or check reviews.

The good news is that all of this is preventable.  Write yourself a script, but this time instead of asking who buys this and who is in charge of that, write your story around what you have done to help a company exactly like the one you're going to call, make it the best 30 second story in history.  The story should include the problems to be overcome, how you resolved them, what you saved the company and so on.  Practice it until you can deliver it naturally.  Record it in an audio version and play it back.  If you were in your target buyer's shoes, would this story be compelling to you?  Would the voice you hear, earn your trust?

Don't rush through this; understanding the value proposition of what you are selling is essential.  This effort naturally helps define who you should call.  Don't attempt to reach a senior executive in a large company until you've tested this story in dozens of companies and fine-tuned your approach.  You will not get past a gatekeeper until you have truly refined your message.

The next step is to research companies in dozens of free sources like Facebook, Twitter, LinkedIn, Google, Glassdoor and so many more.  Once you know something about the company and the people, you are in a better position to understand how you might be able to help them.

Prepare!  Once you have someone on the phone, tell your story and ask if you can schedule 15 minutes of their time to discuss your offering and how it's helped one of their competitors solve a difficult problem.  It's hard to resist what sounds like free competitive intelligence, many executives will bite at this offer unless what you are pitching is so far off that they don't care.  If they seem engaged, it's then OK to have one or two carefully crafted probing questions, solely for the purpose of determining need.  I would not try to qualify at this point, you are still demonstrating your value, it's all about them.  Pay rapt attention to how your contact answers those questions because you will incorporate their comments, issues and problems into your next conversation.  You've shifted your approach from cold calling to warm calling.

Once you have the second call, you're on your way.  Now is a good time to start researching the company's decision makers and influencers.  The more expensive your product, the more of these people that you will have to get on board.  Don't be lazy and ask your contact to provide all that info, it will run off even a serious buyer if you turn the conversation into qualifying them before they are emotionally on-board with doing business with your company.  Each and every contact should build trust and add value.

By now, you're probably hoping for an example of an effective cold/warm call.  Here's one that worked on me:

The person had done their homework and knew I was the VP of Marketing for a software company that they wanted to sell an IT product to. The IT staff was besieged by these calls and wouldn't take any vendor calls.  The vendor carefully practiced their story and called me and simply said this... "I am hoping you can help me.  I sell a great product that I think could save your company a lot of software development time but your IT people won't talk to me.  Can I have 30 seconds of your time to critique my pitch?"  Critique your pitch?  Marketing folks LOVE to critique pitches.  I was all over that.  It was a mediocre pitch, but the person was so sincere and compelling that not only did I critique the pitch, but had them try again with a revised version and then I put the vendor on hold, walked over to IT and suggested they take the call.  They did, we (eventually) bought and everyone was happy.

Cold calling can work... but warm calling will work better and faster.

"Outstanding" is the new "normal"

In this economy, service is more important than ever.  I've noticed that companies have responded in two distinct ways to the current economic climate.  One way involves layoffs and having employees do more with less.  This is certainly understandable for companies who are just starting out and are managing cash flow carefully.  The risk, however, is that service slides if not made a priority. There is no forgiveness for poor service in this economy.  None.

I see the customer service slide occurring in companies that are inwardly focused - meaning that they spend more time and energy on what is going on inside the company than they do on customers, prospects or partners.  It's fine to be somewhat internally focused when you are early in development.  The minute your company starts producing revenue, it's time to make everyone's focus on external influences - competitors, customers, prospects and partners.

At the opposite end of the spectrum are companies who are making service a priority and leveraging this as a competitive advantage.  These companies may have made the same cutbacks, but the focus in the company is external.  They don't spend time arguing over petty details.  They build a high level of trust inside their companies.  They set clear goals and priorities that center on adding customer value.  Most importantly, they have a relentless and unyielding effort toward providing good service.

The internet is fantastic at exposing poor customer service.  A five minute search effort before you do business with a company could save you a lot of grief or make your life much easier.  I am amazed when I find companies that don't understand the value of building a business around happy customers.  I don't think they realize how much business they lose or that their prospects have the ability to easily check their references.

This morning I was on LinkedIn and read a comment that said a business should not use social networking -- because it would give customers a chance to vent.  To me, a company with that thinking won't be around much longer.   AT&T Wireless is a good example of a company that gets a lot of flack for network problems but they make effective use of social networking anyway.  Join their Facebook group and read some of the comments.  AT&T Wireless users can be pretty hostile.  AT&T takes the heat and responds graciously.  They can't make everyone happy, but they are not running and hiding either.  AT&T is such an interesting example of social networking since they have a huge customer base and a high percentage of early adopters -- exactly the type of people most likely to speak out when they are irate.  I applaud AT&T for the effort and wish more companies would follow suit.  This is the thinking that leads to improved customer relations and for forgiveness when issues do appear.  As AT&T builds out its network, they publicly announce it to the cheers of people in that area and to the pleas for expanded service by the folks who live elsewhere.   They repeatedly demonstrate that they listen and are taking action.  The alternative is to hide… and watch their customers jump ship.

There is more competition in business than ever.  Competition forces specialization and fosters innovation.  Every company would be well-served to examine its business model and determine the things that can be done very well… and let go of the rest.   Focus on making customers happy and when the economy improves, you'll be far ahead of your competition.  Give your customers reasons to keep coming back.

If you're just starting out, engineer good service into your business processes.  If you are generating revenue and have angry customers, fix it now… before it's too late.

What we can learn from Microsoft and Apple product launches

When Microsoft Office 2007 was released a few years ago, my husband and I were invited to a launch event at our local convention center.  It was exactly what we expected… live product demos showcasing new features, thousands of people in attendance, and goodie bags loaded with free software.  Microsoft pulled off a highly professional event and managed to make office productivity software seem exciting in a time when many people saw no reason to upgrade from Office 2003.  This event was replicated in dozens of cities around the country.  Microsoft's goal was to make sure IT people and enthusiasts had access to the software with the hopes they would push upgrades out to their organization.  Years later, and I still run across a majority of people using Office 2003.  This begs the question… is a high-end product launch worth it?

Windows 7 launches in two days, and unless I missed it, I have not received any invitations for a public product launch.  Instead, they are saving the millions of dollars of that cost and asking Windows users to host "house parties."  No doubt you've seen the video, it's rather ridiculous and that led it to go viral.  http://www.youtube.com/watch?v=1cX4t5-YpHQ

The cost of this to Microsoft is negligible in the big scheme of things.  They send a copy of Windows 7 Ultimate to the house party host along with some generic streamers, banners and some suggested party games.  They've outsourced this entire operation.  Will house parties drive adoption?  My initial guess is that they won't.  This effort is aimed squarely at end-users.  Most consumers will wait to buy a new PC that has Windows 7 preloaded so Microsoft has the challenges of turning out a solid product and making it attractive enough that someone is inspired to buy a new PC.  Will house party hosts be able to carry forward Microsoft's critical messaging? I don't think so.  After the Vista launch debacle, Microsoft needs a big win.  They need to give people a compelling reason to leave XP.  I'm not sure that the House Party concept can get them the behavioral change they need.  With launch just two days away, Google results show surprisingly little media attention to Windows 7.

Meanwhile, Apple announces products during one hour live keynotes that scores of bloggers and reporters cover live and in real-time.  A couple of hours after the announcement the video is available for download in iTunes.  Without exception, there is a media frenzy with this approach… mostly because Apple makes interesting products, has a loyal following and has an outstanding pitchman as their CEO.  The cost of this effort runs into the millions and takes months to organize.  The beauty of it is that the Apple rumor mill speculates wildly ahead of time, adding fuel and excitement to whatever announcements are being made and often creating lines at the Apple Store.

If you sell a technology product for business, you must have both IT and end-users on your side.  I see so many companies fail because they have ignored the market and the needs of their client base.  Companies with weak product development alienate customers by forcing upgrades with end-of-life announcements or by raising the cost of support to a painful level.  The focus of your product work should ensure the functionality is what users need and that you've eliminated any major obstacles to upgrading.  This includes making products backward compatible, easy to install, stable, with a low total cost of ownership and so on.    End-users want functionality that makes them more productive and their jobs easier.  This is where an outstanding user interface designer is essential.

It's not always about packing in a lot of new features…sometimes customers just want what they already have to work better.  It's up to us as to provide legitimate and compelling reasons to upgrade.

So, if you're gearing up for a product launch, spend some time to consider the following:

- What audience must we reach?

- Who are our early adopters and major influencers?

- What media attention must we capture?

- What messages does the audience need to grasp?

- Who is the most compelling person to deliver the message?

- What are we offering that makes a behavioral change or upgrade vital to our customers?

In addition to the standard market research you must do for any product development, the answers to these questions will help you engineer a successful product launch.

Maximize value in your customer email campaigns

Your customer list is among your company's most valuable assets.  By signing up for your list, they are expressing curiosity and/or trust in your offering.  Don't let them down.  Your list is your gold, so treat it with the care it deserves.

Before anything else, make the goal of every outbound email to provide value to your client.

Think about the email you receive that you hate.  Why do you hate it?  Chances are, it falls into one of these categories:

1.  You can't immediately recognize the sender or subject.

2.  It's not from a retailer but includes a value-less sales pitch.

3.  It's loosely related to something you already receive and an obvious clue they got your name from another vendor.

4.  You didn't sign up for it.

5.  It's "broken" in some way.

6.  The message adds no value.  For example, you live in an apartment and someone is trying to sell you vinyl siding.

On the day you send your email campaign, every person on your list will receive a lot of other offers.   Here's how to improve the chances of yours being the one they read and take action on:

1. It's clear who it is from.  Something in the "from" line conveys relevant meaning to your list.  Avoid generic senders like "me, customer service, postmaster" - these can be captured by spam filters.
2. The subject line is relevant to the value added, for example "10 Tips for Reducing your Tax Burden" sent to a list of business people.  I recommend running possible subject lines through Spam Assassin and split testing a couple of different ones to your list.  
3. The offer to buy products or services comes after the value but there is a clear call to action, for example "Sign up for our next class on tax savings for small business."
4. Use a reputable email service provider.  You must build trust with your list so they need to have an easy way to opt-out of your list, forward the email to someone else or change their subscription.  The opt-out process should be immediate.  The more steps someone has to go through to leave your list, the angrier they will be.  And, you need to be compliant with the CanSpam law, even if everyone else isn't.
5. If someone replies to your email with a complaint, resolve it promptly.  Make sure your subscribers know that real people are behind the email and they are valued as a member of the list.
6. And… test… test your email in various email clients and browsers.  It may look great in Firefox 3 and IE7 but it could be a disaster in another browser or email client.  I like MailChimp's Inbox Inspector.  Submit your email to the inspector and in an hour or so, you'll have a great report on how it looks in a wide selection of email clients.  It's a small investment to make to deliver a better email.  
7. Provide a feedback link in the email.  You never know when someone will give you an excellent content idea.
8. And the most important tip, segment your list by product or service and only send people content that is relevant to their needs.  

It's challenging to communicate with clients and prospects because humans are blasted with more information in any day that we can possibly address.  Now, more than ever, the content of your communications needs to be high quality and client-focused.

If you need some inspiration, here are a few newsletters I receive personally that I think add value to their clients and prospects:

Music:  iTunes - New Music Tuesday

Cooking:  All Recipes - Daily Dish

Web Development:  Sitepoint Community Crier

How to mess up a product launch

Dyson, known for its innovative vacuum cleaner technology, sent me an email late last week as a tease for an upcoming product.  It pointed me to a video on their website that held few clues as to what the new product might be… and frankly, was not that interesting.  I'm a fan of Dyson so I thought I'd give them time, and hoped there would be some leaked info that would spice this launch up… but the product launch went downhill from there.

Here's the copy from the email:

"Sometimes the best way to improve an old technology is to completely change the way it works. In 1993, Dyson engineers created the first vacuum cleaner to use cyclone technology instead of bags – because bagged vacuums don’t work properly. Now we’ve turned our attention to another familiar device - and made it work better by removing something you might have thought was essential. This is a new machine for Dyson. It won't be launched for a few more days, but you can get an idea what it might be on our website."

Several hours later, CNET has a "First Look" at this new product… and it's too short of a timeframe between the would-be viral tease and the when we learn what the actual product is.  There was not enough time to generate any buzz.  Worse, CNET is known as a source for computer and tech news and this product was not exactly in their wheelhouse. And, CNET has an enormous early adopter following and the ability to make or break a product before it even ships.   CNET, in my opinion, tells it like it is.  During his video review, David Carnoy called it "a neat parlor trick" and looked as if he might be having a challenge to keep a straight face.

Turns out this game-changing product is a table fan without blades.  It's other claim to fame is the ability to create 15x the airflow of your normal big-box store table fan.  Dyson has given it the not-so-catchy name of "Dyson Air Multiplier Fan."  OK, a fan without blades is pretty cool and it's safer for kids and pets.  I was momentarily back on board with their plan… until CNET dropped the price and let it hang in the air.  This marvel of engineering, otherwise known as a table fan is… $330 USD…. or roughly 7x the cost of just about any other table fan.

Oh how I would have enjoyed the product development meetings.  Who could keep a straight face in the room when the product manager announced that they were going to market a $330 room fan during the worst economy in 4 decades?

Now I have nothing against Dyson.  I own one of their first generation "Animal" vacuums and aside from normal wear and tear, it has been an outstanding product and well worth what I paid for it.  I would not hesitate to buy another one.  But… it did not cost me $300 more than a comparable vacuum.  It was in the same price point as competing products.

And Dyson has other issues.  Sharper Image, the likely candidate to sell the premium Dyson Air Multiplier Fan, is out of business and Dyson's normal US sales channel includes stores like Best Buy.  The retailers are not going to be too excited to give up precious shelf-space for a $330 fan.   I've yet to see their hand dryer anywhere in the wild.  So, I suspect a lot of R&D money is going into products that may be brilliantly engineered but are what I like to call "million dollar solutions to a five dollar problem."  This isn't sustainable business behavior. 

And, it's no longer summer in the Northern Hemisphere, so an October launch for a fan makes little sense if your biggest market is the US.

I am all in favor of building a better mousetrap.  Without innovation, we would still be driving Model A's, but there has to be a business model that can support innovation.  If the cost to innovate is so steep that it makes you noncompetitive, all you are is the early adopter who will soon find another company has taken your idea and figured out how to execute it at a competitive price point.

I want them to succeed, so I'm hoping as time goes on we will learn it runs on air, reduces greenhouse gases, or can cool an entire house…. something, anything, to justify a $330 price point other than just being a conversation piece.

The moral of the story is that radical innovation still needs to have a sustainable business model.  By all means, get to market as quickly as possible, but make sure you have a product people want at the right price point.