Always Be Closing – 0 to 1001 users with $341 dollars and 30 days
This post is dedicated to understanding how to sell better. Jason Nazar says you need people, product, progress and passion. This is about the progress part. After creating a great product with all your heart you need to get the word out and sell it. How do you grow a user base from zero? The example case here is how to sell a new concept in online sales and marketing – Profile Armor. In a nutshell, how to share your profile and take control. “Deals for people who don’t want to hassle with deals” as the author of Everything Is Marketing coined it. (I am now leaning towards describing ProfileArmor as a tool for “if you like X then you will love Y” as I just randomly learned about Beachy Cream, (which shouldn’t be random since it looks like a better DD Reese) but that’s a whole different story!)
I take solace in in marketing genius Fred Joyal’s statement regarding 1800Dentist… ‘its not my fault they didn’t get my idea at first!!!’
As I explained some of my idea to Fred he made some great points about the value of exclusivity (with a time period being critical, like 3 years in his case), getting early adopters to pay upfront for first and last month, getting a few key customers early on to encourage their peers to buy, and the amazing buy-in he got when getting early adopters on board to be patient enough until enough of the initial network could be secured. But one of the best points was possibly a new slogan – ‘I want a deal I just don’t want to deal with it’.
(Also his point about not incorporating until your concept was solid was right on the money!).
One example is that of Mint, a brilliant personal finance tool. After the founder spent the hard time toiling away alone on his idea and perfecting his algorithms (matching?) the 3 most important marketing tactics were 1) winning TechCrunch for free exposure among key influencers, 2) having an active pre-launch blog w/ over 200 personal finance articles and 3) and getting beta users to promote Mint on their own blogs (key influencers are so KEY even before launch. Using lots of landing page testing they had 20,000 email list before launch (new idea ask for a phone number to call at launch!, a lot of buzz, in effect creating a virtual line! Pure marketing brilliance.
Here are some key excerpts from a great article …
Before getting more abstract, it’s important to get a quantitative handle on distribution. The straightforward math uses the following metrics:
- Customer lifetime value, or CLV
- Average revenue per user (per month), or ARPU
- Retention rate (monthly, decay function), or r
- Average customer lifetime, which is 1 / (1-r)
- Cost per customer acquisition, or CPA
CLV equals the product of ARPU, gross margin, and average customer lifetime. If you ever have a board please see the REQUIRED metrics you will need to report on here.
The basic question is: is CLV greater or less than CPA? In a frictionless world, you build a great business if CLV > 0. In a world with some friction and uncertainty, you build a great business if CLV > CPA.
Imagine that your company sells second-tier cell phone plans. Each customer is worth $40/month. Your average customer lifetime is 24 months. A customer’s lifetime revenue is thus $960. If you have a 40% gross margin, the customer’s lifetime value is $384. You’re in good shape if it costs less than $384 to acquire that customer.
These are the basics but are somewhat problematic because what if you are a startup and don’t know CLV? I guess you operate more on an actual cash flow basis.
…The truth is that selling things—whether we’re talking about advertising, mass marketing, cookie-cutter sales, or complex sales—is not a purely rational enterprise. It is not just about perfect information sharing, where you simply provide prospective customers with all the relevant information that they then use to make dispassionate, rational decisions. There is much stranger stuff at work here.
Consider advertising for a moment. About 610,000 people work in the U.S. ad industry. It’s a $95bn market. Advertising matters because it works. There are competing products on the market. You have preferences about many of them. Those preferences are probably shaped by advertising.
The U.S. sales industry is even bigger than advertising. Some 3.2 million people are in sales. It’s a $450bn industry. And people can get paid pretty well. A software engineer at Oracle with 4-6 years experiences gets a $105k salary and an $8k bonus. But a sales manager with 4-6 years experiences gets $112k and a $103k bonus. The situation is very much the same at Google, which claims to be extremely engineering driven; at a $96k base, $86k in commissions, and a $40k bonus, Google salespeople earn quite a bit more than their engineering counterparts. This doesn’t mean everyone should go into sales. But people who are good at it do quite well.
What is tricky about sales is that, while we know that it exists all around us, it’s not always obvious who the real salesperson is.
…Palantir also has a unique distribution setup. They do government sales and sales to large financial institutions. Deals tend to range from $1m to $100m. But they don’t have any salespeople—that is, they don’t employ “salespeople.” Instead they have “forward deployed engineers” and a globetrotting CEO who spends 25 or 26 days each month traveling to build relationships and sell the product firsthand…As we move from big, complex sales to sales, the basic difference is that the sales process involves a ticket cost of $10k-100k per deal. Things are more cookie cutter. You have to figure out how to build a scalable process and build out a sales team to get a large number of people to buy the product….ZocDoc is a doctor referral service. It’s kind of a classic internet business; they are trying to get doctors’ offices to sign up for the service at a cost of $250/month. Growth is intensively sales-driven, and ZocDoc does market-by-market launches. There is even a whole internal team of recruiters who do nothing else but try to recruit new salespeople. Toward the lower end of things—and $250 per month per customer is getting there—things get more transactional and marginal….Advertising is tricky in the same way that sales is. The main problem is that, historically at least, you never quite know if your ads are working….Advertising’s historical opaqueness is probably the core of why Google is so valuable; Google was the first company that enabled people to figure out whether advertising actually worked. You can look at all sort of metrics—CPM, CTR, CPC, RPC—and do straightforward calculations to determine your ROI. This knowledge is important because people are willing to pay a lot for advertising if it actually works….Zynga has excelled at building on top of Google’s ad work. Everyone knows that Zynga experienced great viral growth as its games caught on. Less known is that they spent a lot of money on targeted advertising. That allowed them to monetize users much more aggressively than people thought possible. And then Zynga used that revenue to buy more targeted ads…
…PayPal’s initial user base was 24 people. Each of those people worked at PayPal. They all knew that getting to viral growth was critical. Building in cash incentives for people to join and refer others did the trick. They hit viral growth of 7% daily—the user base essentially doubled every 10 days…
…Now here’s the KEY LESSON JUST LIKE 1800 DENTIST – the first 10 or 20 customers MUST BE FULL INVESTED AND WILLING TO PROMOTE FOR YOU!
Certain segments grow fasters than others. The goal is to identify the most important segment first, so that anybody who enters the market after you has a hard time catching up. Consider Hotmail, for instance. It achieved viral growth by putting sign-up advertising at the bottom of each e-mail in their system. PayPal is a classic example. The first high-growth segment was power buyers and power sellers on eBay. These people bought and sold a ton of stuff. The high velocity of money going through the system was linked to the virality of customer growth. Dropbox is another good example of a very successful company that depended on viral growth.
Marketing people can’t do viral marketing. But viral marketing requires that the product’s core use case must be inherently viral.
IMHO, the single biggest factor for virality is a function of MATCHING. When one person recommends a product that matches their interests and desires, their PROFILE, then virality can be achieved. Personalized video recommendations are driving views & monetization, Three Times In-crease in Views in Some Cases… Create a profile for each person that constantly evolves based on the viewer’s explicit ratings of content and implicit ratings derived from viewing behavior. IMHO, we are in the early stages of people actually publishing their own profiles like this European tech leader…
Studying Mint’s virality can be quite informative…
Word of mouth & viral, Blogosphere referral badges, sharable website tags
Marketing Game Plan for MyMintGoala) 80,000 users within 6 months of public launchb) Write up in a major publication (WSJ, Wired, Etc…)Objectives of Launcha) Test out MyMint serviceb) Tell a friend whether they login or notc) Provide a way for them to enjoy experience without giving sensitive informationd) Find cheerleaders in the beta process to help us promote the serviceTarget Users (in priority order) – which customer demographics are most important / mostrelevant?1) Young Professionals, don’t want to waste time and want easy way to see finances. Myfeeling is that there are a lot of techies looking for deals, ways to save money and scour theweb for it. We can easily get them as early adopters and then transition later to themainstream.2) People in debt, wants to find new ways to save more money and get out of debt.3) New Families, mothers like knowing they can save for there goalsBlogsa) Personal Finance- http: //carnivalofpersonalfinance.com / – http: //www.stopbuyingcrap.com/ – http: //www.nevblog.com/ – http://www.mymoneyblogs.com/- http://www.savingadvice.com/- http://www.bargaineering.com/
take 3 testimonials from userswho have saved money and highlight that on the site. Recent studies show that usertestimonials provides trust in the product.b) Have Aaron’s story about why he created the site on the front page. Link to his livefinancials so people can play with the product.i) On his live financial’s have bubbles showcasing the features of the site. Similar to atour of the product.i) Highlight 3 key things about the service, effortless tracking, automatic categorization& instant saving offers.orb2) Highlight the 3 major features of the site with icons above them that open to sampleimages. Link to Aaron’s finances with a picture of him below that indicating take a tour of our CEO’s finances.c) Show savings counter either per last hour/day or overall depending on activity and size.TBD after initial alpha launch.d) Link to current offers available or allow someone to put in there, bank, credit card, cellphone, mortgage, etc.. and we can show related offers about there.e) Links on bottom of the page: in the news, about, financial tips, blog, SECURITY,f) Everyone has a cell phone. We can allow everyone to enter there cell phone plan(minutes, cost) and recommend alternatives. I want to have some way that people caninteract and benefit from the site immediately. Then they can email it to friends. Greatexample: http://personal.fidelity.com/planning/retirement/content/myPlan/index.shtml orhttp://www.creditcardclients.com/sa/?s=pbz511Action Marketing Plans:Todaya) Add email collection to homepage with prompt.i) “How do you currently manage your finances?”ii) “What kind of things would you want in a financial product?”iii) “Would you like more money while doing less?”Alpha Launch Strategya) Have satisfaction survey that is numeric and must return greater than 90% reviews. Thisis a numeric questionnaire that we provide for all people testing the product.b) Launch to all investors, family and selected colleagues.c) Have metric dashboard in place (see metrics above)i) Structure code so ability to implement a/b testing and measurement of a/b results.g) SEM marketing and SEO piecei) Review the site for free with my good friends at pronetadvertising.com who are seo/sem expertsii) Make sure initial site has basics of SEO implemented, meta description, titles, url linkstructureiii) Contract with specific bloggers different verticals of information to have a library of content that will be indexed for seo and provide good resources for users.
a) We need to create our elite squad that we can put into different vertical andrepost their content on our site.e) Initiate contact with celebrity endorsers. Suze Orman, Robert Kiyosake, etc…Beta Launch Strategya) Have satisfaction survey that is numeric and must return greater than 90% reviews.b) Invite key financial bloggers, a few mom bloggers and a few gossip/female relatedbloggers to participate and provide feedback (listed above).c) Decide which exclusive publication will receive first press of the product. My best guess isWSJ, I have a great connection there.d) Provide exclusive video interview to Robert Scoble of Scobleshow, friend of mine andDave’s. That will be shown when we do our public launch.e) Work with popsugar.com on an article for young girls (college).e) Leak out to Tech Crunch some of the details of the project to get some buzz going.f) Provide link for feedback and bug submissions.h) Collect 1-2 user testimonials from people using the product to put on the site duringpublic launch.i) Advertise on Paulstamatiou.com j) Notify Online Banking Report of upcoming launch and give him early review of product.Public Launch Strategya) Provide tool without referral fee for people to invite friends. This should be always visiblein the bottom left corner.focus on referrals.b) Allow people to sign up for our monthly newsletter. This will be provided to all registeredusers as well provide us with people who aren’t ready to use the product but want monthlytips on saving and managing their money.c) Message board. I want to provide some ways that the product is not completely individualand there is a community around personal savings. There is not one major online forum forpersonal finances which gives us a great opportunity. This can be an out of box solution likephpBB or vbulletin.d) Display content of preferred partners who list us as elite partners on their site.i) Email Emily Chang, firstname.lastname@example.org, to get listed on her ehub new company site:emilychang.com/go/ehub j) Spend 4 hours doing MySpace / Facebook guerilla marketing for females, groups andmessage boards.k) Add article about how to easily save money on ehow.com and wikihow.coml) Post ads (free) on craigslist in metrpolitan areas letting people know about the service.m) Make sure to highlight the security once someone has logged in and is consideringproviding their financial information. We should have a very simple security policy on thebottom of the site.n) Post on Digg + reddit.30 Day Post Public Launch Strategy. THen the first million users.
Where do they get their CPA numbers for slide 4 & 7. I don’t understand it, do you?
Any idea why slide 15’s starting point is greyed out? How did they get first 1000 users???
Account Security: Senior agency executives live in perpetual anxiety over a major account going into review. That’s a seismic event. But the more subtle, persistent agida comes from the soft erosion of clients inviting other shops in on a “project” basis. If you’re not talking about how your services and capabilities can help the agency drive interest and loyalty with the client, you are missing a big opportunity.
Budget Growth: The dirty secret is that margins on digital media buying are thin to non-existent. The only way the agency stays healthy and profitable is to get its current clients to increase budgets. Too many of us only stay focused on getting our share of existing budgets, instead of on how we can help the agency access and grow the dollars they get from clients.
Workforce Extension: It’s no secret that agencies are severely understaffed. Most don’t have the FTEs (Full Time Equivalents — agency-speak for “people”) to do more than keep up with process. How can your organization serve as an extension of the agency’s own workforce and provide core services — creative, aggregation, marketing, promotion — that allow the agency to drive more profit without more bodies?
Commoditization: And here we sellers thought this was our issue! The agency — and most especially the planning teams — are swimming against the same currents of commoditization and automation that many of us do. How can you effectively bundle your services into programs and add value to them so that they can’t be commoditized or automated? How can you help the daughter agency or the planning team hold onto the spending and influence they so desperately fear losing to the trading desks?
Are these conversations you’ll have with the media planner at the 11th hour of the RFP process? Hardly. But if you’re not engaging in them at an organizational level and allowing them to drive your strategic planning, then don’t be surprised when the RFPs stop coming and you find yourself frozen out of the agency entirely.
TAKE BACK YOUR PROFILE, TAKE BACK YOUR LIFE! “Deals for people who hate the hassle of deals.”ProfileArmor offers the most compelling easy way to manage your identity.”