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You advised that startups should concentrate on "optimizing their funnel" before looking at customer acquisition tactics; can you explain what that means and what it entails?
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The funnel is how a prospect moves from not knowing about you at all to paying you money. For an online B2C product the funnel might look like this: X people see your Google ad. Y% of people click on the ad. Z% of people visit the site for longer than a few seconds. A% of those people sign up for your trial version. B% of those folks buy your product. At each step you can do things to improve those percentages – write better copy, have better page layouts, make the signup less confusing, have more compelling offers, change your pricing, etc. Optimizing your funnel means you understand these percentages and you have taken as much slack out of the system as you can.
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At the moment my customer data is spread across various systems (email marketing, order system, booking system) and I'm looking for a good Customer Relationship Management (CRM) system to help unify all of this. The budget is tight as we are a startup. Are there any suggestions for good CRM software?
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LOL, did you know I used to be a marketing exec at Siebel? (I wouldn’t recommend them for a startup though) Almost all of the startups I work with are using Salesforce.com – it’s easy to use, fairly easy to set up and customize and will scale with you as your business grows. The biggest downside is that it can get expensive depending on how you are using it. I’ve played around a bit with SugarCRM and found the functionality to be pretty broad and mature and the price is much lower than Salesforce.com. I’m sure there are other ones out there but I haven’t seen them in action.
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Hi April, I'm a freelance graphic designer and I'm trying to transition into being thought of as a "design firm" so I have room to expand. Any suggestions on where to advertise or how to market my services? Currently all my business is word of mouth from clients and I need something that will get better (more reliable) results for new business. Thanks!
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Word of mouth is powerful so I wouldn’t give up on that one yet. You might want to do some thinking about how you could get more out of your existing clients and work with them to find more leads. I also think that having an strong online presence where you are sharing what you can do is a really strong driver of leads. When I started my consulting business I was getting 100% from personal referrals and networking. Now I get about half of my new leads from my blog.
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What promotional steps would you take to get a large turn-out to a product launch event? How would you promote to get the most people out to the event you can?
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That really depends on who your target market is. If you want to get a room full of investment bankers you will have to have the event on wall street, after markets close, and get early commitment from a handful of key “famous” guys that you can use to lure the others in. If you want to get a room full of marketers together you might book a famous author and give out free books. If you want a room full of university students, you should give away free beer. The key to any event is to forget about marketing to “everyone” and focus in on the key group of people you want to attend. Once you have a clear understanding of who they are, you will be able to figure out a draw that motivates them to attend.
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Searching for resources to get a better idea of an industry and add to a business plan. What reliable, free resources are available outside sites like Hoover?
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There are different sources for every industry and you’ll probably want to look for one that’s specific to the one you’ve chosen. In the past I’ve gotten great data from industry associations so I’d start there. You can also ask folks in the industry who they turn to for data.
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How do I evaluate customer feedback? I'm getting a lot of conflicting information!
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The key is to have enough direct customer experience to trust your gut. When you start getting really conflicting feedback it’s usually because the customers fall into different categories. Figuring out what those categories are is really hard to do without having a direct conversation with a customer and probing on it. For example with one company I worked with recently we had some customers crying for a particular feature and others that were completely indifferent. It turns out the folks that needed it were running in a particular environment, the others were not. In the end we decided that the first group wasn’t big enough to warrant us doing the development and we decided against implementing the feature.
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hi april, i'm gulveen.... i have a very unique golf freestyle video and i am not sure how i can turn it into a product.... could you help me? :)
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Hi Gulveen. Making anything into a product is a matter of packaging up what you have into something a certain group of people want to buy. The best way to figure this out is to get out there and start talking to potential customers and asking lots of questions about what they need and what they might be willing to pay money for.
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How can I improve the open rates of my email newsletter? Are there tricks for subject lines etc?
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First of all, don’t rule out the possibility that it might not be just the subject line that’s tripping you up. There are other factors – timing, list fatigue, your mail is getting caught in a spam filter, your list is crappy, and the biggest one of all – your content isn’t compelling. That said, subject lines are really important. People like offers but in my experience if the subject line is too sales-y the open rates drop. Every audience is different so you will have to do some A/B testing on subject lines to figure out what works for your audience. There are loads of people writing about copy writing online right now that are experts in this stuff that you can learn from. My favorite is copyblogger.com
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As a start-up tech company will you outsource the whole project from the start? if you are developing a large site along with a great idea..will you outsource product development from the start?
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I assume you are talking about a website. I’ve known companies that have started out this way and then brought it in later. There are risks (what happens if your outsourcers go out of business, lose key developers, change their focus, decide to dramatically raise their rates, etc) but for some companies it’s a fast way to get started. For me, I would consider the site to be the business so I would never outsource something that important (but that’s just me and I’m an engineer so I’m probably biased). Hope that helps.
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Our start-up is launching a website development tool to allow small organization to build interactive webpages. I understand that target a segment of the market is important. But our product is in the end built for a very broad market. How do I select the best segment to begin with?
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Start with the customers you have right now. What do they look like? What do they have in common? Why did they choose you and what are the pattern that you can see? Segmentation isn’t about the product as much as it is about establishing traction in a particular market. Every time you land a customer in a particular segment, it makes it easier to land more customers in that segment because you have good references there, you understand the value of your solution there and eventually you will become known in that segment. That’s the way traction works. The best way to start is to build on what you have already.
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Where do you draw the line between satisfying customer feature requests and overbuilding the product?
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I’d love to know the answer to this one! It’s hard, particularly when you are at the stage where you don’t have many customers and the ones you do have are demanding. It helps to have a clear vision of the market you are trying to address and unique value you deliver. Then you can hold up each of the new proposed features against those and ask yourself “will this help me sell more into my key market” and “does this strengthen or diminish my unique value”. Hope that helps.
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How would you determine what the "right" amount is to budget for customer acquisition in an online business?
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The “right” amount really depends on a lot of factors including the size of an average transaction, how crowded the market is and what marketing channels are available to you. In most of the startups I’ve worked with for example the cost of adwords has dramatically increased over the past 5 years and their customer acquisition costs have gone up dramatically. I’ve seen a wide range of costs so I don’t believe there is a simple formula you can use and even if there was, it would be constantly changing. The key is to test, measure the costs and then optimize the tactics that are working. Optimization can be doing everything from testing different text and offers, testing different landing pages with different layouts, testing new tactics and content, etc. Oh an you know this but if a particular tactic costs you more to acquire a customer than the revenue you make from that customer – stop doing it. :)
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I am a co-founder of a new interactive marketing company and I am a bit lost. What is the best way - most appropriate - to approach businesses/potential clients to market for them? Your help would be greatly appreciated!
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My experience is to start by working your network – hard! That means you meet with absolutely anyone and everyone you can meet with. The objective isn’t to do a hard sell on everyone (in fact, most of the people you talk to won’t be potential clients) but to let your extended network know what you do do that the word goes around. My experience is that eventually opportunities start popping up – some out of your meetings directly and some later when someone hears of someone looking for services like yours and thinks of you. Hope that helps.
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How do you test pricing?
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Pricing is really hard and at every company I’ve ever worked at we worried that we weren’t charging enough for our products. I’ve done things like charging for additional features to see if the market could bear it. Ive worked with sales to change the discount rates. I’ve run short term specials on pricing to see if there was a significant uptick in volume. All to varying degrees of success. I think you have to just try some stuff and see what you can learned in a controlled environment. Also, make sure you are talking to a lot of customers and asking a lot of questions around pricing. They will never say you are charging them too little but it nobody is complaining about pricing you probably are.
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What is a good online business planning template?
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i have really mixed feelings about business plans. I am a gal that likes to plan but I see so many completely over-worked startup business plans, it pains me. I think you could use something that is really bare bones and stripped down and you would be fine. Who are your customers? How will you reach them? What will it cost to acquire a customer? How will you make profit? These are all pretty basic. The moment you start working on a spreadsheet with 5 year projections of revenue you have crossed over into lala land and should immediately come back! :)
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What kind of metrics do should web startups monitor?
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It really depends on your business and your revenue model. If you are doing a typical B2C business you can Google Dave McClure’s Startup Metrics for Pirates (it should be easy to find, he’s been giving the same presentation for years) which is a good high-level overview of some of the metrics you will want to start with. Just be aware that that deck is very, very general and you will have to look at the specifics of your business and make sure you are covering what makes sense for what you are selling. Also be aware that it is only applicable to B2C products where you are not managing a funnel per se. For B2B products or anything with a longer more complex sales cycle you are going to worry more about measuring how prospects move from interest to evaluation to close and what that drop off rates are for each of those stages.
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Prior to developping my product, I want to talk with marketing executives from major retailer stores. How do I get in contact with them and how do I convince them to give me a little of their time?
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You will have to work your network really hard. LinkedIn is a really amazing tool for figuring out who you might have in your network that might know people you want to reach. I would put the word out as broadly as you can that you are looking to meet folks and then work it from there. I lived in New York for 5 years and when I moved to Toronto I wanted to meet the local VC’s because I wanted to work with a venture-backed startup. The folks that introduced me to them were all people in my network, but some of them were not obviously connected. A chat I had with a random person at a holiday party resulted in 3 meetings for example. You cannot predict who knows who so talk to everyone about what you want until you get it. Good luck!
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Hi April, How are you/? Im unemployed looking for a job can you help me?
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I’m great thanks for asking. Work your network, talk to everyone. In my experience only very junior marketing jobs actually get posted – the rest are filled by referrals. Good luck.
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What the steps in summery for great startup ?
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LOL – what on earth would you do with the answer to this question!? Build great stuff that people want to pay money for. Sell it for a lot more money than it costs to deliver it. Repeat. :) Seriously, this stuff is so hard – if anyone thinks they can answer this question easily I would say they are full of baloney.
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What can I do to get people to talk about my product?
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Make your product worth talking about and then make it easy for folks to talk about it. The first part of that involves building something that people love. Building something that people love is about solving an important problem for a specific group of buyers really well. The second part often takes care of itself (for example Apple, that has almost no social media presence). If you don’t have something worth talking about all of the marketing in the world won’t fix that. So, once you do have something worth talking about you make it easy for folks to talk about it by giving customers easy ways to share information and stories about your products with their friends and giving them opportunities to do so.
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i have the product which the niche market need but how can i convince the market that they can benefit from the product?
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You need to figure out a way to clearly demonstrate the value you deliver. How you do that depends on the value and who you are communicating that to. For some markets numbers and statistics work well, for others you need to show demonstrations, for others you have to tell the story with video and customer references. It really depends on your story and who you are telling it to.
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