Comments Off on Startups 101: How and why a green retailer chose to bootstrap instead of accepting venture capital
If you’re an entrepreneur running a startup and begin to find some success, you will likely face a crossroads:
Should I bootstrap, funding the business myself with personal savings and/or ongoing revenue?
Should I procure funding and give away ownership interests to a venture capitalist or private equity firm?
To help you make this decision, we interviewed Brian Fricano, Founder/CEO, Sustainable Supply. He is an entrepreneur who has weighed the pros and cons of each option and made this decision for his own startup.
Brian and his wife launched Sustainable Supply seven years ago as a business with a social mission. “The core of what we were trying to do was sell products for commercial buildings that save water and save energy,” Brian said.
Profitable from day one
They started the business without any outside funding, according to Brian.
“Bootstrapping has forced us to be profitable from day one,” Brian said.
Without a cushion of outside funding, the company had to be creative, and launched with a “drop shipping” model, in which products are shipped directly to customers after they purchase and not to a retailer’s warehouse.
“We signed up dozens of suppliers that were willing to drop ship on our behalf, so we were able to become a virtual distributor, never taking possession of inventory,” he said.
Not only did the drop shipping model allow Sustainable Supply to start operations without the need to invest in inventory, it also tied into its social mission by reducing the carbon footprint and pollution generated from shipping products twice (first to the retailer, and then to the customer).
Success brings offers of capital
Sustainable Supply was successful, and was named the fifth-fastest growing retailer on the Inc. 500 list of America’s fastest-growing companies. This attracted the attention of venture capitalists interested in investing in high-growth startups.
This decision has worked for his company for two reasons. First, Brian would have diluted his ownership if he accepted the investment.
“Our growth after that has [grown four times over] since we made the Inc. 500 list. Had we brought on investors, we would have given away too much too early in the process,” Brian said.
Sticking to its social mission
In addition, his company has a social mission. Its tagline is “Build. Work. Green.” While there are a few exceptions, most venture capitalists are focused on growth and profitability, and less concerned with a social mission.
“Each venture capitalist has its own specialty, not a lot are specialized in sustainability…there’s not a lot out there that have a social component to them,” Brian said.
But I bet you would have thought I was crazy if I told you just a few months ago that two men would fall off a cliff chasing a pretend monster on their mobile phones (fortunately, both were rescued by firefighters and only suffered moderate injuries).
One thing the Pokémon GO phenomenon should teach all marketers is that – thanks to the evolving way customers interact using mobile devices – the digital world is not a vacuum.
Nowhere is that more true than in social media. Because companies do not own the conversation about their brands on social media. They can participate and engage and boost and shape and share the conversations about their brands. But they cannot control them.
So an important element of positive word-of-mouth about your brand is how customers interact with your brand in the physical, real-world environment. To put it in terms of an overused cliché – think outside of the digital box.
Here are three ideas to help you create unique ways to leverage the physical world for social media impact.
Idea #1: Invest in the product
This may be the most radical idea. Product cost is not usually considered part of the social media marketing budget. The usual (way overly simplified) thinking is: price – cost of goods sold = margin.
But what if you didn’t attribute all of the cost to produce the product as a manufacturing or R&D expense? What if you looked past simple production costs to consider what extra, special, unique touches you could add to a product (or service) experience that sparks enough extra joy in your customers that they’ll want to tell everyone about it on social media?
Wouldn’t this be a worthwhile investment? Specifically, a social media marketing investment? In fact, it might be worth more than, say, a paid Facebook ad.
“They actually were going to Instagram and posting very natural photos of what their experience was like when they received that box. They’d put their children in and want to take pictures of their babies in this box brimming with broccoli and kale,” said Cambria Jacobs, Vice President of Marketing, Door to Door Organics. “And all of a sudden, we realized that they were taking and sharing that joyful feeling. It was all over social media, and it was ours to embrace.”
Some products have a more expected passion behind them than others. And in this case, Door to Door Organics is an online grocer that delivers natural and organic groceries, a product that typically has a passionate following and lends itself unsurprisingly to social sharing.
However, any product experience has the potential for social sharing. All experiences are relative. When you create a better product experience than expected, you increase the odds of a positive customer experience on social (on the flip side, the same effect works in reverse when you don’t meet customer expectations).
If you’re serious about social, don’t leave that just up to product managers. Put some (budgetary) skin in the game to deliver positive surprises for customers.
Comments Off on How a B2B Tech Company generated 650% ROI with a Retro-Cool direct mail campaign
“We have a pretty small market at Intronis, it’s manage service providers, mainly in North America,” said Richard Delahaye, Senior Director of Marketing, Intronis in his interview at the MarketingSherpa Media Center at Summit 2016.
He explained that the sales staff wasn’t able to get many conversations going from that group with traditional methods like phone calls and emails. They needed something special to differentiate them from all the other phone calls and emails their prospects were likely getting.
Inspiration came from an old school method: a direct mail campaign.
Delahaye and his team were told to think big, but also keep the customer in mind. So after one idea – which unsurprisingly never came to fruition – to give a car away with every purchase was vetoed, he decided to look for a tech gadget that would especially appeal to their customer base.
“I landed on possibly the oldest, but maybe the greatest tech gadget of all time. Which is, you can now get an Atari game console for about 30 bucks, so that became the core piece of the campaign,” he said.
Customers would receive a box with the Atari, with a note on top that encourages them to “open up for some office fun, courtesy of Intronis … unfortunately, not all technology is this retro-cool. You need to upgrade your cloud service storage.”
But I had a deeper conversation with Joe Peppers, the Ecommerce Market Sector Leader at The Weitz Company.
But previously, Joe went to West Point and served three tours of duty in Iraq as a Captain in the U.S. Army, before going on to work in ecommerce for Amazon, Apple, Fanatics.com, and now The Weitz Company.
I discovered some interesting lessons from military service that can be applied to ecommerce, so we sat down to talk about it…
Personally, I have two big takeaways from this conversation.
Understand their pain
“Part of creating customer intimacy is understanding their pain,” Joe said.
You can imagine, serving in a foreign country and working with the local population, it was important to understand not only America’s goals, but what the Iraqi people needed as well.
Much the same is true for us marketers. The needs of your business are only half the equation. So Joe advises sitting down and interviewing customers. And then mapping out the value chain necessary for a customer to achieve her goals, discovering what constraints in the process are stopping that from happening, and focusing on overcoming those constraints.
There are two important points here. First, let’s talk about understanding the customer’s end goal (as opposed to myopically focusing on your product).
Reeves says, “Do not confuse a type of shoe with the desire for shoes.”
Lanning says, “Contrary to how things may seem, customers don’t really care about your product…So what matters and what must be at the heart of a real value proposition is those customers’ resulting experiences that happen because they buy [or] use your stuff rather than some other option.”
Or as Harvard professor Theodore Levitt has said, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.”
So understand customers’ pains or goals. But then understand the process they undertake to get there, and what is stopping them or adding friction to that process. These may be large or small processes, depending on your product.
But from this, you may identify large or small insights to better serve a customer that will make them more likely to buy from you. A small insight might be that forcing customers to register for an account before they buy from you is causing them pain, you can remove that step from the process and increase sales.
Or a major discovery might be that nobody is buying this new product called shoes because they are uncomfortable. So you invent socks. And you fix a customer pain in the value chain that occurred before they ever got to your product, thus improving the customer experience and increasing sales of your product.
Respond with action
“Respond with action,” Joe advised.
There is a lot of collateral damage in war. But winning a war involves not just a battle of weapons, but a battle of ideas as well. And winning over the local population. So when a bombing would go awry, Joe would go into the neighborhood with money to make things right.
Action. Not just messaging.
The same holds true when something goes wrong with your customers. Joe gave an example from his time at sports retailer Fanatics. There was a customer who wanted a Kansas City Royals sports jersey, but was not going to be able to get it in time.
So, Joe bought an airplane ticket and flew a Fanatics employee to the customer to hand deliver the jersey. “The customer was awestruck,” Joe said.
Joe cautioned not to think that any customer touchpoint is not a big deal. “It is a big deal. If you treat it like a big deal, they will learn that that is the type of service you offer,” he said.
Or it can come at the aggregate level as well. We all know the famous example of Johnson & Johnson proactively pulling Tylenol off the shelf (even though it meant the company would lose money) when a few bottles were poisoned, killing seven customers.
Action. Not just messaging.
Every interaction with your customers – whether just one customer or a group of customers – is a valuable touchpoint. It is an opinion-shaping experience with your brand. Therefore, every touchpoint is marketing – an opportunity to improve the customer experience and thereby brand perception.
Comments Off on Content Marketing Generated a 5,100% ROI for Health Care Innovator Optum
The promise of content marketing is that all that’s needed to provide value is creating high-quality material that gets noticed. The material then does all the pre-selling for you so your company closes more deals with greater efficiency.
No need for cold calls, pushy sales tactics, or throwing money at direct mail.
But the question since the beginning has always been, “does it ROI?”
According to Karen Thomas-Smith, VP Provider Marketing and Reference Management at healthcare giant Optum, it absolutely does. She led a team in a pilot program at Optum that completely turned the company’s traditional campaign-based strategy on its head.
“We literally flipped all the roles on their side,” she said.
“We don’t even want to talk about campaigns. We want to first look at a list of all the content, all the topics we need to be talking about, then build a campaign.”
It worked. Swimmingly.
Thomas-Smith’s strategy generated $51 for every $1 spent on her pilot program, alongside the following results:
12 million impressions
10,000+ downloads of gated content
$120+ million in sale pipeline
Watch the video to see the full strategy below:
1:00 – Quick look at the preliminary results
2:20 – Background on Optum
3:16 – Evaluating the team based on a marketing maturity model
6:00 – Why content marketing is important
8:15 – Aligning the organization around content
12:32 – Building customer personas
17:36 – Creating a content strategy
20:36 – How Optum takes care of their client champions (for content)
22:25 – Creating compelling content
25:45 – How Optum maximizes its content production with content nuggets
28:00 – The overall content machine and how it works
31:25 – How marketing works with sales in Optum’s model
Comments Off on Website Optimization: How Brian Gavin Diamonds overcame ‘mobilegeddon’
For most companies and its marketers, ensuring good placement in search engine results is crucial.
In 2015, Google updated its algorithm. The update earned the name “mobilegeddon.” Why?
“If someone is doing a search on Google using their mobile device, Google is going to show websites that are mobile friendly before websites that are not mobile friendly,” said Danny Gavin, VP, Director of Marketing, Brian Gavin Diamonds, in his interview at the MarketingSherpa Media Center at IRCE. “You can imagine that people who don’t have a mobile friendly site they lose a lot out because naturally they’re going to fall to the bottom of the first page or even on the second page.”
Danny sat down with Courtney Eckerle, Managing Editor, MarketingSherpa, to discuss how his company addressed the update and the impact seen from the rollout.
As a high-end jewelry retailer, Brian Gavin Diamonds didn’t see the early mobile traffic burst that some companies saw online. Danny shared how their mobile traffic was very small in 2012, but steadily increased as the years went by.
“As we saw that our customers are using their mobile device more so naturally we need to make sure that our website is more mobile friendly,” Danny said.
This became even more evident with the announcement of Google of the new algorithm.
Comments Off on Gotta Catch ‘Em All: How to get new customers from the Pokémon GO phenomenon
Marketers can learn a lot from Pokémon GO, and it call comes down to one mantra: Gotta catch ‘em all.
Except in our case, we’re talking about our customers. While not everyone can create a social phenomenon out of their product, you can definitely capitalize on one to pique your customer’s interests and stay top of mind.
Pokémon GO, which is an augmented-reality smartphone game that has players exploring the real world to find virtual Pokémon, is currently rivaling Twitter when it comes to daily active users. This means you can’t afford to just ignore it. Especially if you plan on reaching out to millennials.
Let’s review how some businesses have capitalized on the Pokémon GO phenomenon of the past week.
It doesn’t have to be external
MECLABS Institute, the parent company of MarketingSherpa, is sponsoring its own Pokémon GO contest, with the employee who captures the most interesting picture of a Pokémon winning dinner for two.
Many companies have noticed their employees wandering around the company campus, phone in hand, chasing elusive Pokémon. And they’ve capitalized on the fun by working with something their employees were already doing.
Instead of employees trying to sneak around hiding their obsession, why not turn it into a company activity?
Comments Off on Promotional Marketing: How to use promotional marketing to build brand awareness
I’ve gotten the nickname “Coupon Queen,” because I love a good deal. It’s hard for anyone to turn down a 50% off sale from their favorite company. Promotional marketing uses special offers to raise a customers’ interest, to influence a purchase and to even stand out among competitors. As marketers, our main goal is to use tactics like this to boost awareness in order to build the community for our brand.
A few months ago, I wrote a post on building customer experience by looking at event marketing while we prepared for MarketingSherpa Summit. Before getting started with the event marketing process or the launch of your content, the truth is there is a whole production that begins before that. You have to start with your promotional work. As we are now gearing up for MarketingSherpa Summit 2017, I interviewed Erin Fagin, Senior Marketing Manager, MarketingSherpa, on her role with promotional marketing.
Promotional marketing includes advertising, public relations and sales promotion. Whether you want to inform the market, increase demand or differentiate a product, here is an introduction to promotional marketing that can help you drive the traffic that you need for your product.
Phase 1. Establish your objective
Erin is responsible for the MarketingSherpa brand, with majority of her focus being on MarketingSherpa Summit. She said this includes the “entire brand perception, experience and voice, and how we are positioning ourselves to our followers and customers.”
As a marketer, the first question you want to ask yourself is, “What are we trying to achieve?”
Everyone’s goals are going to be unique to the company; for example, our main objective is to grow our community. This is where your past can become handy in the future planning process. Take a look at past campaigns and data collected to analyze what previously worked and areas where improvements can afford to be made.
Erin has built a portfolio of ideas that were inspired from past campaigns. However, she strives to involve her team in as much as the process as she can. A collaboration session is key in this step.
Phase 2. Build your strategy
Research is the most important asset in your strategy, whether formal or informal. Using that available data on your current or past audience engagement is going to benefit your campaign heavily. Organizing your route to the end goal while showing the value is going to be challenging yet rewarding in the end.
Marketing with internal stakeholders provides the beginning foundation, and external stakeholders can also provide a valuable perspective to the strategy. Here is where the buy-in from those involved comes into play. Your team and leadership has to be convinced to change the nature of the existing or previous strategy to be on-board from the very beginning, because as you move on to the next step, that buy-in is going to be to be crucial.
Budget is a piece to always take into consideration at this stage. If you have the flexibility to share a budget with other departments, utilize the resources to combine efforts to cut costs. With the remaining funds, you may have room to experiment with your strategy.
Phase 3. Execute your plan
Three core components in creating this plan to execute are:
Clearly defined goals
A realistic project plan
Identifying the milestones needed to achieve your goals is going to be the first step. In this marketing optimization post, I walked through steps that similarly tie into building a promotional strategy when improving marketing efforts.
The content messaging is one of the core pieces in your promotional plan. Think about, what you want to say to your customers and how you want them to interpret your content. At the end of the marketing asset, put yourself in the audience’s shoes. How likely are you to be motivated to take action by clicking on the CTA or sharing the information?
In a Buzzstream article, “How to Create a Winning Content Promotion Plan,” Stephanie Beadell presented a well-developed framework to building a successful campaign. What I found thoroughly valuable were the starter questions for marketers to ask during the crafting section:
Erin added that she begins by taking a crack at developing the content needed for her promotions and then solicits feedback from her colleagues on the marketing team. The content team is brought in the process as well to copy edit and ensure that the voice of the brand remains consistent. Utilize as many departments as your company has available. You also want to change your copy to reflect where it will be shared, she said, whether with a segmented audience and of course for unique social media channels.
Determining when and where your content is distributed is the final step.
Ensure that you aren’t overwhelming the audience with multiple sends, and map out your promotional periods in advance if you can. Understand your audience and where their motivations are, whether it is through direct mail or email. But don’t be afraid to take risks and test new mediums. Establish how technology can be of assistance as well – can paid search, print ads and retargeting help in your marketing efforts?
When your team comes within reach of the objective or achieves the overall goal, celebrate with your colleagues because your hard work has paid off. Communicate the success with your entire company and internally share the information. And don’t forget to use this promotional marketing strategy you’ve created as a baseline for the next one.
Comments Off on Three Questions to Align Your Strategy, Marketing and Sales
When the business strategy isn’t linked with sales and marketing, the result is that marketers and sellers end up working harder, not smarter. This has a multi-billion dollar impact. Most companies struggle with this according to the Frank Cespedes, author, and Senior Lecturer at Harvard Business School: “Selling [or marketing,] no matter how clever and creative, can’t generate good financial returns unless it’s connected to strategy.”
I met Frank while we both spoke at an event in Santiago, Chile. We had a memorable time sharing ideas and research. I thought Frank had a practical approach to aligning sales and marketing. So, I reached out to him and interviewed him about what he’s learned through his research for his most recent book Aligning Strategy and Sales.
[Editor’s Note: This interview was edited for length and grammar only.]
Brian Carroll: What inspired you to write about Aligning Strategy and Sales, which is the title of your new book?
Frank Cespedes: Despite decades of attention to so-called strategic planning, there is remarkably little research about how to link strategy with the nitty gritty of field execution, especially sales efforts [and marketing]. American companies annually spend about $900 billion every year on sales efforts. That’s not marketing, that’s sales, that’s compensation, the travel, incentives, the infrastructure, etc. and to put that in perspective, Brian, that figure is more than three times what they spend on all media, Super Bowls, everything. It’s more than about 40 times what they spend on digital marketing, and it’s more than 50 times what they currently spend on social media. This is a big, big gap.
Can you tell us more about your background and where all of this came from?
I was an academic at Harvard Business School for about 11 years working my way up the hierarchy and always was doing research in sales-related areas. My research started with distribution channels, B2B distribution channels, morphed into sales. Then I ran a business for 12 years. And then I came back and said, “I’m teaching strategy. I know something about sales. Let me see what people have written about it.”
What I found was this gap, so I figured two things. One is I don’t think the world needs another book about strategy, and I don’t think, to be blunt, the world needs yet another selling methodology, but there just isn’t much if anything about linking the two and that was the gap that I set out to address.
Comments Off on Customer-first Marketing: Do you put your customers’ interests first?
Fiduciary duty. These words have been in the news lately, as the government seeks to require that financial advisors have a fiduciary duty to their customers in certain cases.
A fiduciary duty is a legal duty to act solely in another party’s interests. So what this new regulation essentially means is, financial advisors must put customer’s interests before their own. And the financial industry has been fighting this.
As marketers – this should be crazy to us! This is what we should do every day: Put our customer’s interests before our own. How can a business, much less an entire industry, be against the customer?
Remember: You are not your customers
Customer-first marketing begins with the realization that our desires and goals are not necessarily the same as our customers’.
Let me give you an example. Mary Abrahamson is an Email Marketing Specialist at Ferguson Enterprises.
Usually if you go to marketing industry events, and a mobile vendor asks, “Who has a smartphone?” we see that everybody raises their hands. And so the vendor says – “See, everyone has smartphones.”