Startup Marketing

Today, I'm super excited about Opera Theater of Pittsburgh's Summer Fest. We took my kids to The Magic Flute on Sunday afternoon. I wasn't expecting much, as this opera company is the smaller and lesser-known one in Pittsburgh. (Can you believe my awesome adopted city has not one but two opera companies?) I was blown away by the quality of the singing, the excellence of the orchestra, and the overall quality of the production and inventiveness of the staging.

Unfortunately, the house was perhaps one-third empty. This problem got me thinking about startup marketing. How would I have known about the terrific quality of this production except by word of mouth? This is the first summer that Opera Theater of Pittsburgh is performing a summer series, so that might explain the lack of knowledge. Their basic marketing was clearly on target; I found out about the performance by direct mail. I assume the opera company got my information from the Pittsburgh Cultural Trust's shared database. But what about other targets such as people who live in or near Fox Chapel where the performance took place?

These days, a lot of startups wishing to expand quickly are using social crowdsourcing deal sites such as Groupon and Living Social. If you have a business with expiring inventory, such as a theater with a limited number of seats or an event that can't make you money once the date has passed, these services can be an excellent option as long as they don't degrade the experience of higher-paying customers by making the large crowd an unpleasant experience. Startups have to take care that they are able to meet the demand, however. I had an experience with a lawn service recently that had to refund me the money because they could never make it out to mow. That's worse than no marketing at all.

A better potential approach is to rely on your existing best supporters. For Opera Theater of Pittsburgh, what about a campaign to give season ticket holders free tickets if they sign up a certain number of friends? Or for us, a discount on next weekend's performance of Candide if we bring four other friends? Or even just a simple plea to existing supporters to Facebook, blog or tweet about the summer series based on their loyalty to the brand?

Right now, we're trying to leverage these relationships at Vocollect. As the industry leader in voice-directed distribution center work, we have a lot of extremely happy customers who are willing to serve as references and/or refer us to other potential customers. It's a lot easier than finding and convincing companies who have never heard of us, and it tends to lead to more like-minded companies and therefore better sales close rates on new deals. All that's required is some database work, internal coordination and a commitment from the executive team that "share of wallet" matters.

For early-stage companies, that means getting a few great wins and wowing those customers with your service and abilities. It's not an easy task, but some of the fastest-growing companies that have survived for a long time seem to take this coddling of early customers to heart. That's an attitude even seasoned companies can use.

Nobody Knows Your Product Exists

Periodically, I am asked to find out how much prospective customers of the companies for which I'm working know about the company's products. I'm always amazed at how little they typically know. I am also typically astounded how much the executive team thinks our customers and prospects know about us.

After so many years, however, this knowledge chasm no longer surprises me. It's natural for us to imagine our market knows about us and follows our every move--after all, we spend all of our time thinking about our company. Why shouldn't the prospect or customer do so too?

Put yourself in the customer's shoes for a moment. If you're reading this blog, you probably work at a company and perhaps have a say in some of the things that company buys. How much do you really know about any of your vendors? Does it come near to the amount you know about your own product or service?

Years ago, I worked at Dollar Bank, a regional bank with a fairly large customer base among small businesses. My boss talked about a particular small business owner who was also a private banking customer. He called his Relationship Manager one way to rail against us for not being available by phone on the weekends. He hadn't realized that we had phone banking, despite the fact that we had implemented weekend hours in the telephone banking center fifteen years earlier. And touted those hours on marketing materials. And on the website. And in every single bank statement. And in mailing inserts. And in TV commercials.

I believe that many companies think that if they have a great product, it will eventually sell itself the way Google and Facebook have done. I disagree. Google and Facebook are the exceptions that prove the rule: almost nobody knows your product exists. Proving the rule are companies like my current company Vocollect, which has a proven product that has saved money at almost every single one of the thousands of user sites where we have implemented and yet continues to face prospect skepticism. It's a proven solution that will boost productivity at any distribution center at least 10% and usually more like 20-30%, and yet I hear every day from prospects and even some current customers about objections to sale that are just plain wrong, as proven at the >80% of the top 75 US/Canada grocery retailers who are Vocollect customers.

I thought about this lack of prospect knowledge recently when I heard about Asana, the company former Facebook founder Dustin Moskovitz started. By all accounts, when I go to the Website, it looks like a pretty cool company. Whether it will be successful, I think, depends at least partly on whether anybody ever learns that it exists. Based on a cursory look at their staffing in the marketing area and from their apparent marketing efforts, I think they believe in the Google/Facebook non-model for marketing.

Good luck, Dustin.

Global Accounts

One of the first things I promised my new boss that I would do at Vocollect would be to try to increase our "share of wallet." Even for B2B customers, share of wallet is a critical concept: how much of the total potential spend do you have? We sell primarily to the distribution center (DC), so if we have a customer with four DCs and we have Vocollect(R) Voice in one DC, we have 25% market share.

Ask yourself which is easier: expanding from one happy DC into the other three or introducing a completely new customers to the concept of the voice-directed distribution center? Based on the obvious answer to this question, we have started to look for places that we have business in one geography and get referrals to other parts of that company in another geography. It's a lot easier to say to an American distribution center manager, "We work with your DC in France" than it is to say, "Let me explain a technology you may have never heard of before or don't understand and try to convince you why it applies to you."

The concept of improving share of wallet by looking beyond your region can apply to many B2B companies. Do you sell only in one country but have a customer with overseas branches? Do you do business with a customer who is trying to expand in a new region? Does your product or service work with only minor adjustments (including minor channel changes) in a market with the same language? Each of these situations present opportunities to expand your business that may cost you a lot less than finding new customers.

By the way, expanding share of wallet also makes it a lot harder for your competitors... a fact that many companies ought to consider in this age of value-conscious business shoppers.