Stu's Blog: Success Stories to Grow Your Business

Getting the Most Out of Your Demand Generation

The most overlooked area of Demand Generation is the management of the prospect once they've raised their hand to learn more.  Often the prospect is thrown over the fence to sales to let them try and figure out if this lead is really a qualified opportunity. 

When you are dealing with any relatively large volume of leads on a monthly basis and you really want to move the needle, invest your energy in processes and programs to develop these prospects all the way through the purchase decision process.  Before you spend one more dollar driving a new prospect, do this now!

Otherwise, expect your hard spent money on creating interest to be lackluster and that can mean someone's job.  Close rates suffer, the ability to test new ideas is not worth doing, and frustration across your team and CEO will run high.  And yes, expect a lot of finger pointing between your sales and marketing teams to begin.  Sales says, "I'm tired of these worthless unqualified leads."  Marketing responds, "You need to work these leads, they're good inbound leads... it's not like cold calling." 

Integrate Sales and Marketing into Your Customer Relationship Management (CRM) System!

At the end of the day, through tightly defined lead stages, new lead prioritization techniques (scoring), and nurture email marketing activity the two teams can quickly become one in maximizing the return on the inbound leads you generate with minimal dollar investment!  Customizing your CRM to meet these challenges is the key to most successful B2B (and B2C) companies accelerated growth and yet many struggle to put resources on it.  You can get a feel for how we do it at ShareBuilder 401(k) here in an interview with Selling Power.

You've invested a lot of energy and programs to get someone to give you their info to learn more (generate that lead), now educate them through the purchase process and help your sales team, retail space, or website sell!  You will quickly see your results jump 50% or more in as fast as 90 days from our experience.

 

PR - The Story Factory

Many companies tell anyone who will listen how the features of their product are better than others.  Then some move to talking about the benefits they can deliver customers.  And finally, the very best, tell a story. 

A great story for most businesses are ones that you can relate to on an emotional level, ideally the ones you want to be a part of.  These stories fit or extend the things you as the listener or reader already believe in.  It just fits with how you see the world.  Websites, collateral, emails and ads are great places to tell part of your story (whitepapers and guides for deep story telling), but the best place is the media.  Enter, public relations (PR), the story factory!

Public Relations -- The Story Factory

Unlike ads that try to get your attention, "hey look at me", editorial in a newspaper, web, radio or TV are places you like and trust.  Programs and publications you like because of the content and stories they provide.  The credence factor of a story placed here is so much higher than an ad, direct mail piece or about any other medium at a marketers disposal. 

If you think about it, you have given permission to the publications and news programs you consume to tell you stories.  Ads placed here are more interruptions.  Many top companies spend virtually no time or money advertising, but a lot of time and energy working to tell their story.  Think about Google, Costco, or Salesforce.com.  Great companies, no mass advertising, but great story tellers.

A couple other items for you to consider.   A reporter is a great screen to help you know if you have a story.  If it's not interesting to them, it ain't likely interesting to many other folks either.  Keep working at it.  What is it that makes your product remarkable?  Are you having uncommon success?  Are you changing the way?  How does it make peoples lives better?  Does your service help solve a problem, a looming crisis, dispel a myth?  If you haven't worked much with the media or are just getting started, I do recommend reading Full Frontal PR by Richard Laermer. 

And when you do get your story in the papers, you get more mileage than ever. Your story lives on forever on the web and can be found in Search and may be picked up by blogs and spread and spread and spread.  Spreading the news about your product -- now that's pretty cool.

How Many of Your Customers Would Pay to Visit Your Business?

What if you had 35,000 customers and you decided to hold an annual customer event that lasted three days.  It's expensive to hold an event, so you'd need your customers to chip in $1,000 each to attend, plus airfare and hotel.  How many would come -- 500, 1,000, ... 2,000?

What if it was a whopping 7,000?  Well then you'd be salesforce.com and the customer event would be Dreamforce.  Even if every company that attended Dreamforce sent two representatives, that's 10% of their customer base attended and dolled out money to learn more.

Why?   A remarkable product coupled with a vision that is so exciting, you want to be a part of it.  It's what happens when you create a community.  This I urge you, is the goal of every business venture.  Create something different, something of value and evolve a vision not just for your company, but for your industry and let your customers in on it.  You won't be disappointed!  It's fun and you will likely be quite profitable.

Three main reasons why Dreamforce is such fun to attend:

• Vision of the on-demand industry with top thought leaders: General speakers included John Chambers of Cisco, George Lucas, and Marc Benioff, CEO of salesforce.com
• Learning:  200 track sessions broken out by discipline and skill level (Sales, Marketing, Operations, Developers, Financial Services, Admin, HR etc...
• Networking:  not only are there 7,000 customers to interact with, but they also have a trade show of ~500 vendors who sell add-ons to salesforce.com (the ecosystem as they call it)

How can you get your customers involved?  What's your vision?

Stay tuned, I have a few ideas for you to consider over the coming weeks.

Why Offers Work

I recently had one of my favorite sales representatives come to me trying to understand why we use an incentive to drive initial interest in our offering.  To quote: 

"Maybe I’m the only one who doesn’t understand these incented leads, but I just don’t get why we’ll pay you a coffee card to get a quote or to watch our demo.  I know it generates leads, but so would throwing 3,000 flyers off of the tallest roof in downtown Bellevue or Seattle.  I'm sure both would give us 2 to 5 good leads."

The Reason:  5 times the response rate with more than 100% the sales lift vs. Not Doing It!

Your target market is extremely busy.  They have little time to learn about a new product or service.  However, if you have the right call-to-action matched with a mildly exciting offer of personal interest, you can expect 5 times or greater the response. 

This lift in interest is huge, even if you only close these "incented" prospects at less than 5 times a "non-incented" lead.  Your business is much better off.   Consider a recent test we ran that looked at two different call-to-actions and varied it with and without offers:

				Closes Per	% Increase
Call-to Action	Offer	Lead Rate	Close Rate	10K Targets	Over No Offer
Demo	No Offer	0.7%	6.4%	4	--
Quote	$5 Coffee Card	1.1%	3.1%	3	-24%
Demo	$5 Coffee Card	3.3%	2.9%	10	114%

If you haven't read Permission Marketing by Seth Godin, now is a good time to get it. A tenet of Permission Marketing is that you invite a target audience to learn more about you with an offer (vs. going for the close or not using an offer).  And then get them engaged with your services, and then move to close.  A great analogy Seth introduces is dating. You entice your date with an evening out, ski day, whatever you know is fun to her… after this you learn about each other, go on a bunch more dates, and if all is good, you may just get married.  If you don’t have a good initial offer backed by a good product, you don’t get anywhere fast.  Asking a girl to marry you on the spot ain’t gonna work and it’s why most closing offers in complex sales do not work until you have an interested prospect

Two Things to Note -- The Offer Matched with the Right Call-to-Action is Critical to Success

In the chart above, the Quote with an offer barely beats Demo with no offer.  In fact, in terms of closed sales it does worse!  Why?  The Quote is not likely the right call-to-action for someone who has shown no interest to this point in this product.  The target is not likely ready for pricing at least in this channel through this medium. The Demo on the other hand appears much more inviting.

So, when you pair the right call-to-action with the right offer you get magic!  More than double the sales for every 10k people you target is an amazing result.  Think about how much better your business grows when you take learning like this and take it to hundreds of thousands of potential prospects.

Last Thing:  Offer Must Be Controlled and Only Available to Your Target Audience

In fairness to my sales guy, we had an offer that got posted online and a group of unqualified prospects came in by the droves.  That's a risk that must be controlled.  You don't want to make your team inefficient because they are working through a list of unqualified prospects.  In general, 80% of your inbound leads should be qualified.  Over that, and you need some controls.  Using better questions in web lead forms for screens or tele-qualifiers are effective ways to control these issues.

How You Know You Have a Great Idea

Many of my friends and business associates thought I was crazy for leaving Expedia Corporate Travel and going to ShareBuilder 401(k) a year and half ago.  I was part of a great team that built the fastest growing unit in Expedia in 3 short years.  We had sold 3,000 Mid and Enterprise customers (unheard of in the industry), we were profitable, and a lot green pastures ahead with our leading technology.  I led a marketing team of 12 people, 4 agencies, and we had a lot of momentum to continue our fast growth.

In reality, the comments and feedback I received reinforced why I knew ShareBuilder 401(k) was going to be a great success and that I wanted to be a part it.

When a Great Idea Is Likely a Bad One

When you float an idea, and everyone says it’s a great idea (and I’m talking most everyone from friends, business colleagues, industry pundits, media, and so on), well, that’s when I really question if the idea is any good at all.  If it’s so great, someone would have done it big time already.  An exception to this “great idea” rule might be new technology offerings, as it can make what wasn’t possible, possible or different.

Second Guessers Help You Find Great Ideas

When you get a lot of folks questioning a new idea, it means to me it has real potential.  If you can see why it hasn’t been successful in the past and find common sense ways to address it and do it differently, you’ve got a great idea.

To finish this riff off with the job analogy… so how did I know ShareBuilder 401(k) was destined to be great?  It was fairly easy. We are 1) selling to an underserved, under penetrated market, 2) we are completely different than conventional 401(k) providers in meaningful ways, and 3) we target small businesses through channels not common in the industry. 

Consider this:

n       It’s much more costly and difficult to steal clients than it is to sell to someone who doesn’t have your service and needs it.  Greater than 85% of small businesses with less than 50 employees do not have 401(k) plan. Selling against not having one is much easier!

n       The need is clear.  Small business owners need a tax-advantaged way to save.  They also need more tools to retain and reward employees.  401(k)s are that answer.

n       We built a plan to educate and sell to small businesses via low-cost online channels and unique partnerships.  If we could tap into companies and associations that serve small businesses which had truly loyal followings, we had a big advantage to make this idea work.  A great example is our Costco partnership.  Costco has a large small business client base.  Costco members are very loyal to a company that sets a very high bar on providing quality products at a great price.  Costco is the Good Housekeeping seal of approval for its members.

n       The internet provides a better way to sell 401(k)s that is easier, more affordable.  The ShareBuider 401(k) is 100% online and paper-free.  401(k) plans are more complex than they need to be, especially for business with less than 50 employees.  We designed an online solution that simplified the process and focused on what is important for most small businesses including sole proprietors.  As a result, we do it for a lot less than most.

n       Our investment selection is unique, easy and smart.  We chose low-expense index-based Exchange Traded Funds (ETFs).  This makes us different!  ETFs are like index mutual funds but typically have even lower expense ratios.  We leveraged proprietary technology that eliminated transaction costs to the individual investor.  Trading costs are typically paid with each ETF trade, but not in our 401(k)s.  Many major mutual fund companies do not really want to use ETFs in their 401(k) offerings – so we may be different for quite a while!  Low-expense, index-based investments fit with my personal belief, and many who have studied this much deeper than me (read John Bogle's book), on the best way for most people to save for the long-term.

I loved my time and team at Expedia.  ShareBuilder was simply the right idea at the right time.  And it sure feels good helping businesses and their employees save so they have a real shot at an easier financial future.  That’s how I knew what some thought was a bad decision was a great one.  What ideas should you kill... what ideas might be great for you?

Your Challenge -- find breakthroughs to sell your services

A friend of mine really liked the last post on channels and how to grow your business faster.  One thing didn’t seem to add up to her.  She said, “This analysis seems like it would kill any new idea or new channel from getting a real chance to succeed versus your channels that are up and running.”  She’s right, it could.  Don't let it.

Having a good framework to know which channels are performing and making them work harder for you is paramount to any fast growing business.  For those that do optimize existing channels, some may find it difficult to take a chance on a new way to sell.  It may seem impossible to justify, and it will feel risky.

Take smart risks as much as you can!

You need to try new things.  You don’t have to invest a lot to determine if a new channel can work.  Take a serious look at new channels and compare them alongside your current channels.  Why? It gets you to think what is realistic to expect and what it will take for the channel to succeed.  What seems reasonable given how your other channels perform?   Are there other companies you see doing this successfully?  (If so, reach out to the company, learn it, and try it.)

And probably more important -- does it just make sense to try it?  It’s like investing.  You want 90% of your savings in an appropriate asset allocation that you are confident will work over time.  The other 10% you want to take chances and see if you can grow your money faster.

Many Small Breakthroughs are Better than One Big Breakthrough

When I test a new channel, I test as many aspects of it as I can afford and that is usually a lot less than I’d like.  I’m a test hound.  If I can find one test cell that works, I’ve just found a new lead or sales stream to accelerate growth and profitably.  You’ll occasionally find one big breakthrough.  More often than not, you’ll find several small breakthroughs that in sum total are “the” big breakthrough.  And the great thing about having many smaller ones is you have a more stable business.  If one leg of the table is taken out, you still have 10 others to stand on and keep you business headed north.

Channels: Frameworks to Build Your Business Faster

Two of the most powerful pillars of business strategy to think through are:

1. Strength in supplier management (dominating distribution channels)

2. Own the end-customer relationship (brand -- delivering on a remarkable promise)

It's about managing how people buy or who will buy.  So let's talk about channels as it can often lead to help you build your relationship with customers to boot.

Not many will succeed with supplier management like Microsoft
Microsoft masterminded one of the greatest channel distribution strategies of all time. The end result was amazing market penetration. Microsoft Office and IE Browser were automatically loaded on nearly every PC sold. Goodbye Netscape. Lotus became a niche player now. Some legislation is not affecting these relationships, but Microsoft has already established itself at the de facto for high use software products such as Word, Excel, PowerPoint, and for the most part Outlook. [Stay tuned to see how on-demand offerings (SaaS) are able to penetrate this software marketplace.]

And it’s tough to invest enough to build brands like P&G
Branding and owning the customer is typically a long-term investment with many dollars spent to make it happen. This is a place most companies beyond the P&Gs of the world can not typically go. There are typically few exceptions (e.g. Google) that can build a major brand without major investment in marketing -- although having a remarkable product sure can give you a leg up and go a long way.

So what can you do? A lot with Smart Channel Management!
You can still be remarkable with a solid channel strategy and tactics that can help build you into a relevant and meaningful brand. Smart tactics that tie directly to both your long and short-term goals will help you hit and exceed your business goals this year and put you on track for a bigger tomorrow.

First, rank channels subjectively based on five core criteria and any you’d like to add that are in important for your business. Include your existing channels you use and any new ones you could truly afford with your budgets (if TV isn’t affordable, keep it off the list… although new offerings are even making this an opportunity for small business like Spot Runner). This can frame your business growth opportunities so you can make smarter decisions and test new ideas without risking your main growth channels.

Next, get all your data together and rank them objectively, so you can make the right trade-offs given what is helping you best hit your business goals today. The charts below show two of the five channels being analyzed in this example.  Also, revenue per sale, cost of acquisition, and margin per sale may be better measures to use for your objectives:

Do your final tally and truly consider your subjective components one more time, as well as any estimates you are making for new channel “objective” score.

Work the plan. Take smart risks on big ideas that can grow your business faster. It’s often wise to start with a test so you don’t’ bet the farm on the ideas.   A final suggestion.  Other than the extra resources it takes to launch a new idea, give it no more undo love than it will receive when you roll it out.  Inflated success may come back and bite you with poor performance later.   

How to listen to your prospects and see what they really like

You want to really listen to your prospects in a way that drives more business?  Test!  Test emails, web pages, ads, pricing, ... it's all there for you to learn.  Testing is the most powerful way to listen to your prospects and customers.  Why?  Because testing measures what a prospect does, not what he says he will do.

What people say and what they do are often not related what-so-ever. And if you're a small business, you can't afford the millions of dollars large companies spend on focus group and quantitative research.   A great example is regarding "choice" and how it affects a customer's actions.  Research will tell you one thing, how people act will tell you another.

Choice - Everybody wants it, but fewer people act on it
In most any research you may have had the opportunity to field, people overwhelmingly say they want choice.  Yet, too much choice actually creates worse results.  McDonald's may have created value meals to drive more revenue per customer visit, but the real gain was in simplifying choice.  It made it faster to take an order, less time for a customer decide, and in a business where operation excellence is everything, they can manage many more people through line at peak hours faster than ever.  In the world of 401(k)s, offer over 12 investments choices and the percent of employees who participate starts to decline.  Research  will tell you "a la carte" is preferred to bundled meals and more investment options is preferred to fewer, but customer actions tell us a completely different story.

Choice creates trade-offs and if the number of choices your provide is not making it easier to buy from you, it is hurting your business.  Choice creates second guessing.  Choice makes you wonder if you're  picking the right thing, or getting the best value.  Choice complicates the most simple decisions.  If you haven't yet, check out The Paradox of Choice (www.swarthmore.edu/SocSci/bschwar1/books.html) by Barry Schwartz -- it will give you many ideas on how to offer your products and services on the web or on the shelf.

Two most important things you must understand to improve your business

1. Find your best "sizeable" audience.  The rules of direct marketing hold true:  Target, Offer, and then Creative Design/content are the three sisters of success. And they rank exactly in this order in terms of impact:  1) Target, 2) Offer, 3) Creative.  If you are blanketing your product to an audience that will never have an interest in your product, you can have the best incentive and creative, and you will get no results.  So test direct mail lists or banner ads on web sites you think your audience visits and see who becomes a lead and eventually buys (or buys directly depending on your product).
2. Use an incentive on the next action you want your prospect to take.  Every business wants a prospect to buy now.  Truth of the matter is, beyond simple commodities, your buyers are going through a purchase process that can take days to over a  year.  In B2B, anything under 60 days is fast.  So think about what is the easiest next step you could have a prospect take that would help the prospect and help you move her closer to making a decision.

A Simple Way to Get Started
If you have an in-house prospect list, this is the place to start.  These prospects have come to you via a downloading a white paper, past purchase or other means.  They have raised their hand that they are interested in you.  Your house list is the best target list to learn from and then take your learning and apply to how you acquire new leads.

Use email to test headlines for open rates and call-to-actions to see what content is most interesting and when.  You'll find your newest leads are typically interested in much different content than your oldest leads.  See what offers are most likely to drive an action or sale.  Make sure your deadline for the offer is clearly stated and typically within 30 days to create interest to act now versus put off a decision.  If at all possible, have one action you are driving in the email.  You can have multiple call-to-actions but make it to do the same action.  Providing options between buy now, see a demo, download a guide will deliver worse results.  Don't believe me, please test it!  :)

Track email open rates, click thrus, and the action you have "incentivized" and compare against your future efforts.  You will not only understand what works, but you will create a baseline of what is great vs. poor in terms of opens, clicks, and closes and can then focus your tests on improving your weakest links for greater results.

If you're looking for more practical ideas on what other companies have done that has worked, visit www.marketingsherpa.com and sign up for the enewsletter or become a member and peruse their case studies.  Also, start saving your favorite emails you get from your favorite companies.  You'll likely get an idea of what works from watching companies you love communicate with you.  Take the idea, mold it for your service, and go test it against the email, banner ad or headline you need to beat... and beat it!