NPD Test #2

What about other paid online sites?

-affiliate marketing -shopping channels (comparison shopping engines) -display and banners ads -retargeting ads -email marketing

Successful Elevator Pitch.....

(1) grabs attention with a product demonstration, (2) associates the demonstration with a memorable brand name, (3) makes note of market traction in the form of product orders or sales, and (4) advances the sale by asking for an opportunity to present the full story and introduce the investor to the business team. -Sometimes product demonstrations are difficult. In those instances, highlight who you are and how that qualifies you for startup funding. -Have you already launched one or more successful businesses? Are you working with a business team with industry cache? Are you a blogger with millions of followers? All of these special qualifications can be leveraged to get a next meeting to tell your whole story.

In an entrepreneurial setting, the three biggest challenges with beta testers are to get them....

(1) to purchase the product, (2) to use the product, and (3) to provide feedback on the product. -In our experience, overcoming the first challenge, that is, getting beta testers to purchase the product, goes a long way in solving the other two

A successful catch phrase combines product/service benefits and which of the following?

*A customer's hopes and dreams*

According to a study sponsored by the Harvard Business School, the most important skill for an entrepreneur is...

*Be a closer* -For entrepreneur, never give "no sale" a chance. Closing the sale is what matters. If you are a closer, you can grow your company. If you are not a closer, make sure you find someone who can.

Many entrepreneurs are so focused on building a better product that they do not spend enough effort on:

*Being personally involved with selling their product* -The cardinal sin for many new ventures is to be too product focused and not sales focused. Unique products will sell even with a few imperfections. Selling the product gives you the "best feedback" for growing your new venture.

5 Rules for Marketing Events

five "secret sauce" rules for dreaming up successful promotions and marketing events. 1. *Make sure the distinctive product feature takes center stage in the event.* -Ex: the Promo Magazine judges particularly liked that the "Cadillac Under 5" promotion directly sold the premise of the car. The power and speed of the vehicle took center stage in creating excitement and were not peripheral to the event. The key features and benefits of the new product were spotlighted. 2. *Make it gorgeous; event quality reflects on product quality.* -Ex: HP is another award winner with the "You + HP Experience" interactive tour. It consisted of a modular structure moved from town to town like a traveling high-tech circus spotlighting over 40 products via 12 interactive concourses. Consumers photographed themselves using pop-culture backdrops, printed pictures with HP gear, and watched videos using HP digital projectors and plasma TVs -he judges were impressed with the professional execution and how "gorgeous" the concourses and activities looked. 3. *If at all possible, connect the event with a local cause* -Washington Mutual used a bus to tour Los Angeles and Seattle schools to encourage parents to support their WaMoola program. WaMoola is money donated to support local schools donated from each Washington Mutual check-card transaction. Card applications jumped and card use increased by 42%. 4. *Target the event to fit a specific audience and marketing objective* -Ex: Gatorade is an award winner for its "Gatorade High School Athlete Award Program." In this promotion, high school coaches registered for an awards kit to honor their top athletes. -The judges were impressed because it was simple for the coaches, but more importantly because it "targeted coaches by sport, by boys or girls, and by past participation." Gatorade's targeted approach achieved a 30% response rate with over 50% of the active coaches re-enrolling. 5. *If appropriate, send home a personalized souvenir to drive home a living, breathing brand experience* -Ex: Jelly Belly launched a national road tour and as the tour visited popular shopping and other high-traffic areas throughout the US, consumers sampled old and new flavors of Jelly Bellies. Next, personalized photos of family and friends were shot using Polaroid film with a pre-exposed border featuring the Jelly Belly logo. The souvenir and the happy memories of the Jelly Belly tasting experience then returned home to be posted on the kitchen refrigerator -increasing top-of-mind awareness and Brand Loyalty, and making sweet increases in Jelly Belly sales -Promo Magazine judges were very impressed with the Jelly Belly logo photo that allowed consumers to take something home even though the product itself was consumed. ; The souvenir put a personalized, long-term Jelly Belly reminder in the home.

The Audit Checklist

*Competitive Angle?* -element of differentness? -spark a personal connection? -get people over a hurdle? *Sharpening the Angle* -Unique Product Claim -Large Addressable Need -Dominate the Situation -Reason to Believe -Quantifiable Support *Leveraging Leverage* -Ride Horses -Prospect for Beta-Goldmines -Land an Anchor -Seek Out Benefactors -Build an Advisory Board *Think Big and Act Big* -Puff it Up -Grow with Borrowed Interest -Master Social Media & Publicity -Get Your Swagger On -Reach Out with Crowdfunding -Dominate Trade Shows *Launching Tactics* -Marketing Events -Have a Love Fest -Compelling Demonstrations -Charge a Value Price -Close the Deal

A well known cookware store hosts a cookie contest every year featuring their most popular mixer. Customers share recipes, cooking tips, and prizes are awarded. This event does all of the key activities for creating a winning marketing event except...

*Connects the event with a local cause* -If at all possible, connect the event to a local cause to increase attendance and sales. In today's marketing environment, many people care about "why you sell" as much as about "what you sell".

Be Brash

Inject energy into your startup by tapping into the brash, in your face, mojo afforded to new competitors. *if you aren't a "nervous wreck" before you launch it, it might just not be brash enough* -SB (small businesses) can take more risks to grow that EB (established businesses) won't. -SB can be aggressive, independent, and admired for it. -EB's success makes them vulnerable because they can't change direction Ex: *Mac desktop computer commercial; the hammer smashing into the screen" Ex: "Unleash the Beast" Monster Ad with Hulk (M on his chest) Ex: Squatty Potty ice cream pooping unicorn commercial Ex: -Bartles & Jaymes uses two actors playing roles as old hayseed farmers poking fun at big business wineries when introducing their new wine cooler even though its parent company is Ernest & Julio Gallo, the world's largest winery. -Wendy's taunts mainstay burger chains with "Where's the beef?" ^^ Each of these businesses are getting their swagger on. -*That is, showing great confidence in their ability to follow their passion, take on the status quo, and then crush it. What new businesses don't have in size or raw popularity, they can make up for in attitude.* -*New ventures with swagger can turn heads and generate buzz by doing things that would go unnoticed or even raise eyebrows if coming from bigger, more established businesses. To be a David, all a new business needs to do is find a Goliath and throw some rocks.* Ex: -Allegiance, Inc. has swagger. It has an attitude. It doesn't back down from much bigger competitors. -Allegiance hired an aggressive sales team, relentlessly makes cold calls, makes a big splash at the key trade shows, and routinely takes on business that stretches their capabilities. -Allegiance marketers don't hesitate to kick sand in the face of much better known and stronger competitors. -They frame small size as an advantage rather than a disadvantage. -They point out that their competition can take months to provide the analysis and feedback that their software can provide in minutes." -By the time the competition gives you their results," the founders say, "The freight train will have already run over your business."

Crowdsourcing

the practice of outsourcing a task to the "crowd" (e.g. customers) during NPD -Involving customers through crowdsourcing provides firms with: 1. Access to greater and different resource base. 2. Creates congruity between customer needs and product solutions. Ex: Lego Factory ("designed by LEGO fans"; winner gets design sold); Treadless t-shirt competition (winner gets their design sold)

Brand Equity

the value of having a well-known brand name that can generate more money from products with that brand name -bran loyalty is transferred to new products

The Self and Consumerism

*Consumerism* -why do people purchase things? -the things we buy become an extension of ourselves >> *Extended Self Concept*: who you are consists of 'the self' and your possession. -we believe that if we own more, then we are MORE ("I shop therefore I am") >> *Endowment Effect* the phenomenon that an owner of an object values the object more than a non-owner, simply bc they own it. ("it's mine you can't have it")

Crowdsourcing downstream NPD phases

*Crowdsourcing Product Design* -Most extant crowdsourcing research focuses on the question: "where do I get new product ideas?" -We ask the question: *"how do I develop a new product idea into fruition."* -How? Crowdsourcing during the developmental process-->design crowdsourcing. Ex. of Design Crowdsourcing: -Red Clay (on-demand industrial design) >> red clay makes it fast and easy to match with top industrial design talent and turn your product idea into manufacture-ready technical files. -Crowdspring.com (Creative brief) >> resulting product was the trapper keeper binder -Quirky.com, a crowdsourcing community >> submit sketches, images, videos, and prototypes that illustrate industrial design directions for (the product). they use the top concepts as a starting point for their final design sketches. >> product then sells on Quirky.com's website and in other retail outlets >> Quirky raised $185 million in venture capital funding. >> Quirky secured partnerships with Mattel and GE. >> "Quirky has adapted the innovation model from open-source software for the physical world, and done it quite successfully." -Example of Design Process: Farmer's Market Bag >> the orange bag produce hamper (original submission to quirky); listed what it was for, the solution to problems, and key features >> quirky took the idea and produced the crowdsourced design winner (across body or shoulder strap bag; cell phone/purse pockets;interior pockets, extra bags;exterior preference pockets; magnet seal; mesh, cover flap, etc.) added way more features and updated the design

Empirical Model

*Data Collection* Web scrapped data from Quirky.com -Monthly unit sales for each product. -The raw product idea as originally submitted. -Was designed crowdsourced (yes/no) 26% were not design crowdsourced. -Price and other control variables.

The reason to make the marketing event "gorgeous" is because?

*Event quality reflects on product quality* -The quality of your marketing event reflects the quality of your product. The quality of marketing event execution can strongly influence the sales of your product.

In 1990, Jim Koch, the founder of Samuel Adams beer attacked Heineken beer with an outlandish marketing tactic. Koch launched an American advertising campaign proclaiming, "When we asked for Europe's tried and poor, we didn't mean their beer." Heineken was visibly upset because Jim Koch highlighted the fact that Heineken beer was outlawed in Germany because of a purity law--it is made of corn not wheat. Heineken called his tactics "classless." However, Jim Koch's new venture got a lot of attention and increased sales by attacking one of the largest beer manufacturers in the world. This is a good example of a startup:

*Getting their swagger on* -When a large firm attacks a startup, everyone roots for the underdog. No one likes big businesses beating up on the little guy. New ventures can be brash by getting their swagger on by throwing rocks at Goliath. New ventures don't have size but they can have an attitude. Such tactics create buzz in the market and are very memorable.

Successful entrepreneurs create high-impact low-cost buzz for their new ventures by:

*Marketing Events* -Marketing events are critical for creating buzz. Marketing events are low cost, highly effective methods for developing awareness and brand loyalty.

Topic: Personalization

*Personalization* allows consumers to: -create better congruency between the item and their own personality (ex: "the item" matches "the self"; custom t-shirt) allows consumers to: -express themselves and make it "mine" (ex: designing wedding dress online; personalized m&m's; make your own 6 pack of cupcakes or beauty products online) ex: nike id, lego factory designed by lego fans, my lululemon, customink shirts, etc. -Because consumers created the items, they will automatically like it more. *'I designed it myself' effect*: > people overvalue things they make themselves. > they will pay more for an item that they created themselves > people are more likely to like the experience with the company bc they feel accomplished *Personalization results in:* -better post-purchase satisfaction -better brand loyalty -higher willingness to pay (more revenue) -creates a differentiator for the brand

Value Pricing

*Pricing Review* - What price should I charge? -Price is a factor of 3 things: 1. *what your business can afford (cost)*: you can't price below cost 2. *Competitors*: do consumers already have an "expected price" from market norms? How are you positioning yourself (luxury or cost leader)? 3. *Customers*: how much are they willing to pay for what you offer? *Charge a Value Price* -but, what influences that "max price a consumer is willing to pay?" -*it's your competitive angle!!* -margins, margins, margins!! (ex: squatty potty)

Purchasing and Self Expression

*Self-Expression* -people use products as a self-expression mechanism -I use what I own to express something about myself (ex: "to me, clothing is a form of self expression--there are hints about who you are in what you wear." - marc jacobs -brands with strong meaning are better self expression mechanisms

Successful entrepreneurs can get above average prices for their products by:

*Using a marketing channel in which consumer need and value are high, but product alternatives are few* -Selecting the right marketing channel makes all the difference in generating demand at an above average price point. A hot dog at a fast food restaurant can cost as little as $1. Virtually the same hot dog at a Major League Baseball stadium can cost $3.50 or more.

Creativity *Loves* Constraint

*Venn Diagram* (left side is #2) -Hopes and Desires of Buyers (right side is #1) -Produce/Service Benefits (overlapping in the middle is #3) -Catch Phrase Ex: -#2 = I want our love to last forever -#1 = clear, shining jewels of enduring beauty -#3 = "Diamonds are forever"

Steven Covey described his book "Seven Habits of Highly Successful People" as:

*a Trojan Horse for opening doors* -Steven Covey had a practical and humble view regarding his famous book. The book was like a Trojan Horse. It allowed him to get into doors that he otherwise couldn't open. It allowed him to help his business and more people than he ever imagined possible.

AllRecipes has introduced a website for busy moms to search for quick and easy recipes that can be made with local ingredients. This is an example of managing:

*customer touch points* -Managing each stage of the customer experience is critical for new venture success. Managing the website allows AllRecipes to connect with their clients in a way that is meaningful to busy moms.

To feed a frenzy, which of the following give customers a reason to act today?

*greed, uncertainty, and fear* -A combination of fear, uncertainty, and greed get people to take action. To create a frenzy, you need to activate all three emotions.

A useful approach for planning and measuring potential customer touch points is:

*understanding each of the steps in the customer experience* -If a new venture wants to understand the consumer touch points, then they must explore the customer journey--the steps the prospective customer goes through when doing business with you.

Which comment by an entrepreneur to a potential customer listed below violates the rule of three?

*we love your group and want to sign an exclusive win-win agreement as soon as possible* -The Rule of Three is based on the idea that it takes a minimum of three sharks swimming around your idea to get someone to take immediate action. Anything you say or do that hints to your current customer that they are the "only one" violates this rule.

Create a Catchphrase

-*go out on a limb*, take a risk, and invent a tag line or catch phrase that grabs attention -A great catch phrase grabs *sparks a personal connection* by causing a "ha ha" an "ah ha" or an "aaaaaw" -A great catch phrase will wrap your benefit in bacon -A great catch phrase mixes a compelling benefit with an authentic need and/or perhaps a "get your swagger on" attack

Active vs. Passive Demonstrations

-Active demonstrations are better than passive demonstrations. -Seeing may be believing, but doing is understanding! -Product demonstrations will work and should be part of every entrepreneur's product-launch toolkit. -We are not talking about simple variants of food sampling that everyone sees in grocery stores. We are referring to full-out demonstrations of even pricey items in which people have a chance to handle the product and experience its benefits firsthand. -People want proof, not puffery, and this is particularly true for startups and entrepreneurs. -Generations of fast-talking salespeople and over-the-top advertising have made the public skeptical of product claims, and each new generation seems to be more skeptical than the last. -Growing skepticism and boredom with sales pitches unfortunately means that not all demonstrations will be equally good. In today's world, demonstrations almost always must be active in order to be effective. -There is a big difference between active and passive demonstrations. >> Passive demonstrations are like boring classroom lectures. >> Active demonstrations get people doing rather than just watching. -Active demonstrations give people hands-on experience. -Great demonstrations are just like great games: everyone wants a chance to play. Developing a great game takes some creativity and ingenuity, but not great sums of money. Ex: DuPont Stainmaster developed one of the best demonstration games of recent history. Consumers walking into carpet stores were led by retailers to a kiosk where they could soak light-colored swatches of Stainmaster carpet in their favorite stains, then wash out the stain completely in seconds using a simple solution of soap and water.

The Financial Impact of Crowdsourcing

-Does crowdsourcing the design have a financial impact (units sales)? -Under what situations does crowdsourcing have the most impact? *Key Moderator*: Marketability of the initial raw concept.

Determinants of Quality

-Each stage of the customer experience gives a startup an opportunity to send out a message of quality. -Every activity matters because you can manage it. -Make positive impressions with face-to-face meetings, telephone conversations, email notes, website content, trade publications, product literature, trade shows, media-based advertising, service calls, customer visits, and social media. -Just think, at each touch point your customer may be evaluating your reliability, responsiveness, competence, the access to you and your company, or your courtesy, communication, credibility, or the security in doing business with you, or your knowledge of their particular needs, or your tangible cues of success and stability, or a combination of the above or all of the above. >> Performing well on these criteria, by managing the touch points, provides an opportunity to gain or build commitment with the customer.

Key Insights on Crowdsourcing

-Firms are using the crowd to help implement new ideas. -Decision to design crowdsource is dependent on characteristics of the raw concept. -Crowdsourcing the design can help performance. >> But, the effect is dependent on the marketability of the raw idea.

While most of the content for Unit 2 is geared towards entrepreneurial new product development, much is still relevant to big business -Remember, the point is to learn how to think differently.

-How to develop new products on a budget? -How to market on a budget? -How to gain credibility when you are a new brand? -How to leverage others when you are small?

Accelerate Time to Money

-Learning to create a frenzy around your new business idea is a key skill in finding investors and signing up new customers. -The fear of being at a competitive disadvantage or losing a business opportunity provides a strong incentive for people to get involved. -If you want to get distributors, partners, investors, and key customers to sell, champion, invest in, or buy into your competitive angle, create a feeding frenzy by following the Rule of Three. Ex: When sharks smell blood in the water and see others circling their food, they go crazy biting everything around them. -*In short, seeing the opportunity to feed and watching other sharks circle the food gets them excited about the feeding opportunity and creates an insatiable appetite.* -Ex: Each year, especially around Thanksgiving and Christmas, shoppers put on their shark-face when presented with the opportunity for a bargain. When the loudspeakers in a store trumpet, "Bargain in aisle five," watch shoppers run to the location, snapping up products they hadn't planned on with an insatiable appetite. When Christmas sales are advertised in the newspaper, watch people line up the night before just to be first in line to run through the store like blood-crazy sharks, circling every bargain and attacking everything and anything around them.

Products Need Personalities

-People consider brands much more personally relevant than mere products. -Brands make buying decisions easier. -Brands stand for consistent quality, create expectations of thoughtful customer service, and help people communicate to others something about themselves. -When someone buys a favorite brand, they are anticipating a well-defined consumption experience. -A brand is like a personality. It is multidimensional. -It has name, like Nike. Often it has a distinctive logo, like the Nike Swoosh; and an advertising slogan, like "Just do it." Sometimes it may have distinctive packaging, like a Coca-Cola bottle which was designed to be recognizable as a Coca-Cola bottle even if it were broken into several pieces Ex: One entrepreneur told us that after making his first million dollars he immediately rushed out and bought a luxury Mercedes automobile because he wanted everyone to know he was successful without having to say it himself. -Branding changes and elevates the focus of many startup marketers. -Brands say "join me" where in the past many marketing campaigns have simply said "buy me." -Reframing the marketing imperative from "buy me" to join me," begs us to market products through the eyes of brand champions. And there are big dividends when we do. Ex: Cinnamon Toast Crunch can't "fix" itself to fit in with health trends, so marketing managers decided to look at the cereal through the eyes of brand champions and feature the sticky cinnamon and sugar coating that brand champions loved to lick off the cereal squares and their fingers. The wildly successful campaign says "join me" in "craving those crazy squares" and shows cannibalistic squares of Cinnamon Toast Crunch licking and devouring each other. -Brand champions often love their favorite brands to the extreme. -Marketers interested in saying "join me" can't shy away from being extreme, perhaps brash, when talking about the brand. -We remember brands that dare to stand out.

Not every product demonstration can bring together each element.. but for startup marketers, however, there are 3 must-haves to include:

-Research shows that, in general, relative advantage and compatibility are the two most important factors energizing new product acceptance. ^^ (it is clear that success often comes to those new products that are superior to their predecessors and mesh closely with rather than awkwardly interrupt our way of life.) -Finally, because we know doing is more powerful than watching, we also recommend that every active demonstration include an element of hands-on trainability ^^ ( If you own a camera shop and sell digital cameras, let prospective customers take a few pictures of the salespeople and experience the technological miracle for themselves.)

Respect by Association

-Startups need reliable partners with respected track records. -Whom you associate with makes a big statement to potential customers. -Learn to earn respect by association. Working with good companies and business partners will imbue your new business with respect and credibility. -BUT, This sort of credibility can be temporary >> A well-respected business partner is like a Fairy Godmother that takes you to the Ball to meet Prince Charming. Once you meet Prince Charming, you are on your own to make a positive and lasting impression. You have to deliver on promises. Ex: "Customers, like banks, will take a first chance on you if you come backed by the best. But they will not do so a second time, no matter how glowing your references, unless you prove your own personal reliability with results."

Catchphrase 101

-effective catchphrases are straightforward. -They roll off the tongue with rhyme, alliteration, and the brashness of Bob Dylan poetry. -Great catchphrases are like great humor; they state the obvious. -But don't be fooled. Just because great catchphrases are simple doesn't make them simpleminded. -a catchphrase should "wrap the benefit with bacon." (For example, he points out that BMW automobiles own the benefit fun, energetic driving. With that as the benefit, many of us might write the catchphrase, "BMW, It's fun to drive." The catchphrase wins high marks for simple and direct, but doesn't score well on the brash, "wrapping with bacon" dimension. It probably took some time for BMW marketers to arrive at "The Ultimate Driving Machine," but the drive was really worth it.) -Don't settle on a catchphrase that highlights something that sparks your imagination but doesn't highlight something that directly benefits and/or sparks a personal connection with your customer. >> Those types of slogans fail the "simple and direct" test. >> They require too much mental processing for the average customer to get it. Ex: Morton Salt's "When it rains it pours," General Electric's "Imagination at work," and Timex's "Life is ticking," express fine sentiment, but may not make a direct connection with customers who may say, "What does rain have to do with salt?" or "Does General Electric still make light bulbs?" or "When did Timex get into healthcare?" *Catch Phrase Mojo!* -catch phrase + compelling demonstration = "will it blend" startup marketing magic

One of the first American firms to leverage the power of the Love Fest is Harley Davidson (H.O.G.- Harley Davidson Owners Group). A love fest enables Harley Davidson to:

-empower their best customers to sell to other customers -encourage the H.O.G. to sell products for Harley Davidson >> A Love Fest encourages your customers to share the love with prospective owners and help sell your products. Customers are more credible selling Harley Davidsons then the Harley Davidson's Sales Group.

Why Marketing Events?

-low cost -innovative, different, memorable -viral--use existing social networks to momentum -create a great place for selling *Get a Horse....for the event* -combining a newsworthy marketing event with advertising support pays big dividends! -positive media coverage (earned media) is 600% more effective than paid for advertisements (paid media) *Borrowing Marketing Events* -can't afford a marketing event? Borrow one! -Ex: BYU world record water balloon fight; boy uses this as opportunity to make a music video for his song (eventually was the theme for a show) *Develop a Creative Marketing Strategy....with no money!* -Stoneyfield Farm milk (adopt a cow)

Topic 5: Launching Tactics

-marketing events -have a love fest -compelling demonstrations -build a sticky brand -charge a value price -close the deal

Top 3 Selling Challenges:

1. *Entrepreneurs lack credibility, name recognition and track record* -In short, there is little or no trust. The solution is to earn credibility and establish trust. -To build a customer base over time, a business must establish trust with its customers, who must believe the business will meet or exceed their expectations. If customers' expectations are met or exceeded, the business grows -credibility and trust can be gained by reputation, it can be transferred to you, and it can be earned by you. Establishing credibility by reputation is difficult for entrepreneurs because they have no track record. Temporary credibility can be transferred to you by someone else recommending you, such as an introduction, a phone call, or an email. -**Of course, the best way to gain credibility is to earn it yourself. Credibility is earned or lost with every interaction you have with a customer 2. *Power is with the buyer* -sharpen and then sell your competitive angle. -Your product and/or service must stand for something different that is important to the customers -If your product offering lacks distinctiveness, customers have no reason to try it. 3. *Entrepreneurs often have big egos* -Entrepreneurs must learn to subjugate their egos and deal with frequent rejection. -The solution is to check your ego at the customer's door. This is not the time to win debating points. Sure, you could win the battle of words, but you will lose the sale. -This is a real test for many startup marketers who want to show how smart they are and who want to defend their product. -Remember, the focus is not on you. The focus is on the customer - A big part of being a successful entrepreneur is learning how to cope with rejection. Our experience suggests that successful entrepreneurs use rejection as an opportunity to learn.

Why would a Horse want to be associated with a new angle in the market?

1. *Industry Guru* -looking smart and up-to-date 2. *Trade Association President* -angles with "wow factors" put them on the cutting edge 3. *Local Expert in your State* -looking credible because he/she is a "thought leader." Experts love to jump on a winning bandwagon *Good angles attract powerful horses!!*

Antecedents of Crowdsourcing the Design

1. *Usability*: how much effort is needed to use the product? (-) 2. *Reliability*: will it be dependable and error-free? (-) 3. *Technical Complexity*: how complicated is the product to design? (-) 4. *Usefulness*: does it fulfill a need? (NS) 5. *Newness*: is it innovative and novel? (NS) -constructs measured via consumer surveys

Closing Sales

1. Professional Selling Skills -SPIN Selling 2. Learn to Feed a Frenzy -Rule of Three: it takes a minimum of 3 people swimming around your new idea to get someone to take action (ex: black friday at Target) 3. Reducing Barriers -physical, financial, emotional ex: the power of free (free trials); guarantees (or your money back) 4. Augment your core -Heart: core product--product emotion -Body: tangible product--physical product -Energy: augmented product--complementary products and services >> augmented product energizes basic products and often presents the biggest growth opportunities for entrepreneurs Ex: CROCS and jibbitz

7 Ways to Earn Credibility and Trust

1. dress and speak the part 2. speak the language of the customer 3. seek to understand 4. listen, listen, listen 5. set correct expectations 6. be responsive 7. deliver results

Topic 4.7: Startup Marketing Essentials: Big on a Budget

A dental hygienist, Dr. Bill, has invented a device called the FreshPet to eliminate their pet dog's bad breath. It is similar to a surgical brush. A dog licks the brush and removes the bacteria that causes bad breath. Dr. Bill used Kickstarter to fund product development and is now making sales on Amazon.

Marketing Slogans

A few carefully selected and memorable words can make a big impact when building a brand. -A great catchphrase keeps your brand focused and in turn focuses buyers on key benefits. -name should create synergy with your brand benefits -catchy and memorable -your name is your best marketing tool -don't play it safe. get your mojo on! Ex: -"With a name like Smucker it has to be good." -"M'm! M'm! Good!" -"Melts in your mouth, not in your hands." >> These memorable catchphrases bring to mind focused, well-defined brands - Smucker's Jelly, Campbell's Soup, and M&M Candies - and focused, well-defined benefits. >> Because of the catchphrase, when we think about buying one of these brands we are reminded what we will be getting and why we want it! -Crafting a memorable catchphrase may be a lost art. -It has been a long time since catchphrase blockbusters like "Where's the beef?" "The real thing" and "You deserve a break today" were written for Wendy's, Coca-Cola, and McDonald's. (Can you even remember what advertising slogans these brands use today? Most people can't. Today we get sad catchphrases like, "If it's not an iPhone, well it's not an iPhone.")

Do-It-Yourself or Outsource Sales

A major decision you must make is whether to sell the product yourself or look for partners to sell for you. -Of course, if you cannot sell, if you are not willing to learn, and if you cannot find someone to teach you, then you should consider an outsource partner. *Advantages of Partners* -Partners can provide instant access to customers -entrepreneurs save the cost of building and maintaining their own sales force *Disadvantages of Outsourcing* -loss of control -loss of power -When you outsource, you don't control the selling activity. -You have little power over the salespeople who are selling your product. -In addition, the selling partner develops and owns customer relationships. -The sales force will know and understand the customer better than you will. And for startups, very little is more important than knowing and understanding the customer. -So, evaluate the strategic and cost considerations of do it yourself versus outsourcing sales. Which option can better sell, get the business, and close the deal for you?

While we know what drives a feeding frenzy in sharks, why do people exhibit the same primitive pattern?

Answer: because of the FUG factor. *F* -Fear of losing out on an opportunity; people don't like others getting an inside deal on the hot new product idea before they do. *U* -Uncertainty if the opportunity will come their way again; people don't want to miss out on the opportunity of a lifetime. *G* -Greed for fame and fortune; people want an opportunity to hit the jackpot with a "WOW!"" product. -Instead of blood in the water, it is fear, uncertainty, and greed that spark the feeding frenzy in distributors, retailers, partners, customers, and investors. -But don't just allow one shark to circle your competitive angle. With one shark in the water, the only thing that will get bitten is your company. *Never, never, never allow one key stakeholder to hold your company hostage.* -Great competitive angles will attract the attention of many other sharks. >> Allow other sharks to see, smell, or even taste your competitive angle. >> With startup companies, we find it is human nature for people to only take action when they are pushed to do so by the FUG factor. >> As entrepreneurs, we don't have the time to wait for distributors, partners, and investors to eventually wake up and then make up their minds. >> Time is money and startup companies have a limited amount of time to survive. *Startup marketers must accelerate time to money.* -Don't limit the possibilities of your new business and slow the time line to success by only pitching to a "special few." Go ahead and show as many people as possible your idea.

Summary Case: Leveraging Leverage Advisory Board & Horses

Ava the Elephant Horses for the Product: Dr. Oz?? Advisory Board: Shark Tank QVC Lady -gets kids to take medicine without a hassle or fit

Club Fest

Building a club is another way to launch with a Love Fest. Ex: Are you a connoisseur of fine chocolate, microbrews, power ties, or taste-kicking hot sauce? If so, you will want to join an online club where experts send you the newest product every month! -A uniquely fun and effective Love Fest used by entrepreneurs is to start a club or community where product users can be united with a common set of interests and focus. -Entrepreneurs that organize clubs find an easy way to generate continuing revenue. -Love Group customers are eager to participate in automatic monthly purchases just to be the first to try and comment on the latest and greatest flavor, color, or product improvement. -Customers who join clubs love to share their knowledge and expertise with anyone who will read or listen Ex: tie buyers don't want to bother going to a store and shopping on their own for them; so why not have a tie expert pick out the tie of the month and send it directly to you?

An Act of Congress: Big Tobacco Example of Marketing Events

Congress believed that stopping advertising was the key to stopping teen smoking. -They were thinking, "If we want to destroy new sales and cause product failure, squelch all advertising" - that same old Marketing 101 mind trap with a twist. -Unfortunately, the advertising ban on tobacco hasn't worked out for Congress or the American people -smoking has actually increased: Congress is left to wonder, "How can the tobacco industry have all of this success without the powerful aid of television and radio advertising?" -Congress forced Big Tobacco away from Big Advertising to a much less expensive and much more effective marketing tactic - the marketing event. -After the ban, it wasn't long before wildly successful marketing events like Marlboro Country Nights were attracting teens by the thousands to hear their favorite country-western acts and to learn directly from their friends the social benefits of smoking. -Dreaming up a successful marketing event takes a lot more time, energy, and creativity then just handing over big bucks to a big-name advertising agency. -But time, energy, and creativity are exactly what startup marketers have to offer. *Entrepreneurs and marketing events appear to be a match made in marketing heaven.* Ex: For each concert, the painted Fit was featured prominently in front of the House of Blues venue with colorful, brand-themed lanterns posted on either side of the vehicle. Honda took the vehicle directly to the young, hip crowd they believed were most likely to buy it. Potential customers saw the car, sat in the car, and learned that the Fit was hip. Ex: Even television shows have found that they need to use something in addition to traditional television advertising to promote their programming. On the day of the premiere of VH1's "I Love the 90s," over 50 models danced through the streets of Manhattan dressed like 90s celebrities such as former president Bill Clinton, presidential intern Monica Lewinsky, rapper MC Hammer, Baywatch icon Pamela Anderson, and other crowd-pleasers. The look-alikes did the Macarena in high-traffic areas including Times Square and Grand Central Station, giving away stickers encouraging everyone to tune in for VH1's new 90s series. -Entrepreneurial companies also have run across some great ideas for marketing events. In many ways, entrepreneurs have more freedom than large companies to do something unique and creative. Ex: A local roller coaster designer and amusement ride manufacturer sent their marketing director out on a road trip to amusement parks across the country driving a VW Bug he personally purchased and modified to mimic the look and feel of the amusement park ride he was promoting. The event stirred up a lot of interest among park patrons, which in turn sparked interest in the new ride from park operators and owners. *Stretch Marketing Events to the Extreme* -giant hamster ball run-thing -beer mile competition to try new beers -happiness machine: coke giving gifts out of the vending machine

Wal-Mart Mini Case (Get Your Swagger On)

Can you find a Goliath when you are a Goliath? Wal-Mart finds a Goliath: (Fortune magazine cover saves "Wal-Mart Saves The Planet: well, not quite, but CEO Lee Scott's green campaign, which started as PR, is becoming a force of nature") >> "Due to our size and scope, we are uniquely positioned to have a great impact in the world, perhaps like no company before us" ^^ Translation: Instead of focusing on why people hate us, why not give customers and employees a better reason to love us! *Background on Sustainability* -consumer enthusiasm around sustainability is growing...but, there is a disconnect between awareness, intent, and behavior. (most can't name a green brand, most considering themselves environmentally conscious can't name a green brand, and almost half of the gen. population say they prefer to buy green brands but green brands only have 4% market share) Ex: Walmart "GreenWork" Cleaning spray ("if all 200 million of us walmart shoppers would buy a bottle we could help prevent _____") -Walmart slogan: "budget-friendly prices. earth-friendly products" -Walmart rolled out all kinds of LiveBetter product innovations; "You x 200 million" -cleaning supplies, shirts, garden supplies, and everyday products we use expect for how it can help eliminate waste in landfills, etc. -Walmart's in-store impact: using LiveBetter kiosks in the aisles to advertise the new products *Outcomes* -Kudos from business press - "redefined itself in terms that Sam Walton would recognize as an extension to his core value system" "save money live better message more than corporate double-talk...blazing a trail in environmental sustainability and health care benefiting consumers not just consumerism" -Kudos from industry experts - "leadership in sustainability has become the No. 1 image maker for Walmart" -Kudos from Wall Street - "Walmart shares have climbed the charts in recent months...shares hit a new 52-week high May 1st, up nearly 22% from the beginning of the year"

Managerial Insights

Crowdsourcing is being used to turn ideas into reality -"in online sourcing from a crowd...you're connecting multiple people to get to an end solution" How does crowdsourcing aid design? -"they all started working together in a way that not only developed the initial idea, but the product just kept (evolving) and iterating" Crowdsourcing is done judiciously. Based on project requirements -The decision to crowdsource is based on the specifications of the project. >> "I need a design that is unobtrusive and easy to use." >> "I need a design that is tough enough for frequent use."

Remember What Works, Then Close

Customers buy your products and services for their own reasons. Take careful notes. Learn their hot buttons. -What works for one customer may work for another customer. -Remember the pitches that work in certain selling situations to close the deal. Then use this knowledge in similar selling situations. -In addition, too many people think closing the sale is about using gimmicks and trick questions to get the customer to buy. This may work once, and only once. Remember the adage, "Fool me once, shame on you; fool me twice, shame on me." -Closing the sale is about helping the customer make a decision to solve a problem or capitalize on an opportunity. -We have found the best way to do this is to summarize the benefits your product offers the customer and then ask for the order. -In summarizing the benefits, you should match your product's benefits to the customer's most pressing needs. (Of course, this assumes you know the customer's most pressing needs. And you do know them because you have asked good questions to identify the needs and you have listened well.) -With the Summary-of-Benefits Close, list each need and then show or describe how the benefits of your product address each need. Then ask for the order. (A soft, non-threatening way to ask for the order is to simply say, "Based on what we have talked about today, do you feel comfortable purchasing our product?")

Jelly Belly Swagger

David Klein knows how to create positive buzz. -He earned Jelly Belly a lot of exposure through a nationwide publicity campaign including an article in People magazine which featured a full page photo of a nude Klein taking a bath in Jelly Bellies. -Mr. Klein also made several appearances on national television programs in which he persuaded celebrities to taste and react to Jelly Bellies. -Total Jelly Belly sales in the first seven days were only $44. -BUT, David Klein promoted Jelly Bellies with real swagger. -He made sure a jar of Jelly Bellies was on President Reagan's Oval Office desk in the White House and on Air Force One. -He also made Jelly Bellies the first jelly beans in outer space, sending them on the Challenger shuttle as a surprise for the astronauts. -He envisioned that people would be willing to pay 10 or 20 times more for jelly beans if they simply tasted better, came in scores of natural flavors and had a clever name. -David was on his last few dollars when he called a writer from the Associated Press to come see the "hottest new candy in California." -The writer arrived at the ice cream shop where Jelly Belly rented space and saw customers come in and buy bag after bag of candy; like they were addicted to Jelly Bellies. -David knew when the writer was coming to the store so he made sure all of his friends and neighbors had money to buy pounds and pounds of Jelly Bellies. -The writer was so impressed with what he witnessed that he wrote an article about this fast selling candy and the rest is history.

What to Demonstrate

Effective demonstrations do a lot more than just demonstrate what the product does. -In the case of Stainmaster, the demonstration showed off the carpet's "relative advantage" over other carpets. >> Relative advantage, however, is something that goes above and beyond a product benefit. *When developing an active demonstration, we want to hit as many of these quick-acceptance hot-buttons as possible* -Relative advantage means the new product is much better than the old product it replaces. -Compatibility means that the new product fits in with the typical way we go about doing things. (Humans are creatures of habit. Demonstrations should show that people don't need to radically change their day-to-day behaviors to get the most out of a new product.) -Complexity really should be called anti-complexity, because it is the degree to which a new product is easy for people to understand and use -Trialability refers to how accessible a product is for hands-on trial and experimentation. -Observability is the degree to which we can observe others using and enjoying the new product. Ex: -The Stainmaster kiosk was set up to highlight relative advantage by providing red cough syrup as the benchmark stain. -Carpet buyers knew a tough stain when they saw it, and they knew how impossible it would be to remove from their own carpeting. -With Stainmaster, the red cough syrup stain washed clean again and again using only simple soap and water. -No need for fancy cleaners, processes, or chemicals; nothing could be simpler than soap and water. -The Stainmaster in-store demonstration spotlighted relative advantage, compatibility, anti-complexity, and trialability. - One could even say that the DuPont kiosk incorporated observability when interested carpet buyers watched as others stained then washed bits of Stainmaster before taking their own turn!

Hard-to-Demonstrate Products

Ex: Terra Nova Biosystems sells a pollution-eating technology that cleans badly-polluted soil. The product couldn't get traction with investors or users until Terra Nova founders came up with a way of demonstrating the benefit. Since then, they have attracted a lot of attention and have funded rapid growth. Now they demonstrate the benefit by first showing detailed pictures of an untreated site and then by eating a pinch of purified dirt from the site once it is treated with their system. Eating the treated soil made the benefit tangible. *Demonstrations afford startup marketers an opportunity to add tangibility to otherwise Intangible benefits.* Ex: To communicate friendly service, McDonald's cashiers are trained to look directly at patrons and smile. * Great marketing makes the intangible, tangible! It makes the unnoticed impossible to miss. It assumes people will not figure out and remember a benefit unless it is experienced as a sight, sound, texture, smell, or taste.*

Expos and Conferences

Ex: For Apple lovers, users, and all-out devotees, Macworld hosts the ultimate Love Fest with expos, conferences, trade shows, a magazine, and a website; If you want to celebrate everything Apple, Macworld provides the venues. -This shared love for Apple generates significant buzz among Apple's brand champions. -Many of them become so connected to the brand they begin to act like latter-day evangelists, preaching the good news about Apple to their co-workers, friends, and each other. -The Apple Love Fest represents a significant force in Apple's marketing efforts. -Imagine having thousands of Love Group customers extolling the virtues of your product to the market and selling your product. And this is highly effective voice-of-the-customer selling, not megabuck paid advertising available to only deep-pocket corporations.

Classes and Contests

Ex: Lance Anderson started Rusty Pickle, a creator and distributor of papers, binders, stickers, die cuts, transparencies, albums, ribbons, and other materials for scrapbook companies and scrapbook enthusiasts. -The company tagline is "Adding texture and dimension to scrapbooking! -The company also adds texture and dimension to retail stores and customers by providing classes, contests, and even a blog. -Teaching scrapbook classes at retailers and shows from coast to coast is a core activity for Rusty Pickle. -Of course, retailers love these classes because they generate a Love Fest buzz about scrapbooks, which means more sales for the retailer. -And customers love sharing ideas and learning about new products with other experts as well as with beginners. -The Love Fest buzz then takes on a life outside the classes as customers show off their newly acquired scrapbooking skills to family and friends. *Love-Blogging* -And then there is the Rusty Pickle blog. -This virtual venue creates a Love Fest forum for customers and scrapbook junkies to learn and to share the love of scrapbooking. *Creative Competitions* -Duck Brand Duct Tape (prom outfits made out of duct tape); costs the company nothing but gives great exposure

Selling and Closing

For startup marketers, selling and closing are must-have skills. -Experiment with different selling tactics and find the closer. "Build a better mousetrap and the world will beat a path to your door." -This statement is true if the world knows that you sell mousetraps, if the world knows where to find your door, if the world understands the unique benefits of your mousetraps, and if the world knows how your mousetraps solve their mice problems better than alternative solutions and at a price they are willing to pay -Without this information, knowledge, and understanding, the beaten path will miss your door completely. Unfortunately, some entrepreneurs become so focused on "building the better mousetrap" that they do not spend enough effort or resources on selling it. *Selling answers the above "if" statements.* -Don't ignore this important function along your way to building the better mousetrap. -If you are to cash in on the rewards for developing a fantastic product, you must learn to close sales -Calling on a customer and securing an order means selling. -It means asking the right questions and listening to customers to understand their needs and wants. -It means matching the benefits of your product offering to the needs and wants of the customer. -It means getting commitment from the customer for the order; that is, closing the deal. -It means delivering on the commitments you make. -It means meeting, even exceeding, customer expectations. -Successful entrepreneurs know how to sell. They know how to close.

"It's not advertising, stupid"

Great startup marketers are great at launching products with limited funds. -*They create buzz not by aggressive advertising, renting billboards, or flooding the airwaves with radio spots, but by inventing and doing marketing events.* -Put your creative thinking cap on! Get experiential! Create memorable experiences that people can take home with them! -new marketing students want to believe every marketing problem can be solved either by doing more advertising or by charging a lower price. -To a novice, every marketing problem has an easy solution: more advertising, lower price >> Fighting in the trenches of a new business, however, startup marketers soon discover that high-cost advertising and price cuts are not the panaceas that novices wished they would be. First and foremost, both are too expensive for cash-starved entrepreneurs. In the case of advertising, today's media channels are so fragmented it is difficult for advertisers to reach potential customers cost-efficiently. -Just spending a lot of money and reaching a lot of people doesn't add up to a lot of anything for most entrepreneurial products. With bad advertising, advertisers are talking, but not necessarily saying anything. Ex: A case in point: is Super Bowl XXIV, the so-called dot-com bowl, which will be forever remembered more for the dot-com advertising excesses and failures than the two football teams that played. On that Sunday, a dozen or so Internet startups spent over $40 million to air a total of 10 minutes of advertisements. And that $40 million amount only covered the media buy. Millions more were spent to produce the spots. In spite of their large ad-spend, most of the startups were quickly dead and gone. (spent all that money for them to be forgotten and never remembered again) -The dot-com entrepreneurs apparently fell into the Marketing 101 mind trap, falsely believing that big advertising can easily solve all the big marketing problems. -Just think about it. Did you see any television advertising last week? How many ads do you remember? Of those, how many advertisers do you remember? -In modern America, it takes tens of millions, even hundreds of millions of television dollars to burn an advertising message into the public consciousness. -As marketers, we hate to admit it, but most paid advertising is often really, really ineffective. -Advertising is at its strongest when reassuring people about purchases they have already made or passing on some good news about awards, accomplishments, or fun events. -Advertising is at its weakest when attempting to persuade people to purchase new products.

Empower the Love Group

If you want new customers to feel the excitement of your new product, empower your best customers to help launch it with you. -Sponsor your own events and generate Love Fest buzz. -Putting together a successful Love Fest is a two-step process. >> Step One: Create opportunities for your best customers to "share the love" they have for your products and services. >> Step Two: Get out of the way and let your customers sell for you. Startups need to orchestrate ways for their evangelists to spread the message of love, that is, the good news about their favorite company and products. -The ultimate high-credibility information source is customer talking to customer or customer talking to new prospect. -A Love Fest leverages "customer love" so that current customers buy more from you and pre-sell more of your products to new customers. *So, how do you create these Love Fests among your customers and prospective customers?* -Love Fests can be leading-edge conferences, summits, events, blogs, clubs, community classes, or any other activities that bring your current customers and prospective customers together. -The goal is to get your customers together, in person or in virtual space, to learn, share, enjoy, and celebrate their personal connections to your company and products. Ex: Harley Owners Group, aka H.O.G.. -In 1983, Harley-Davidson formed H.O.G. "to enhance the Harley-Davidson lifestyle experience, and to bring the company closer to its customers." And bring customers together, in a Love Fest way, they did. -Today more than a million people around the world pride themselves as H.O.G. members. >> Wouldn't you love to have a million customers selling for you? And what do they sell? -They sell the Harley-Davidson dream and making it a way of life. -One million Harley-Davidson owners, selling their friends, neighbors, and relatives on the Harley-Davidson dream. -And they sell themselves on group events such as rides, open houses, pin stops, pit stops, and of course, products. -Company managers estimate that an active H.O.G. member annually generates more than $5 thousand, while even an inactive member annually generates more than $4 thousand. Membership is a roaring success for Harley-Davidson. Ex: Pop-Tarts World -pop-up store in Times Square with cafe/retail store/interactive experience area -30+ treats made with pop tarts -varietizer with 23 flavors allowed visitors to create own 6 pack -retail store with pop tart flavored chap stick and t shirts -complementary computers for pop tart video games, social media chat, -generated 1.1 billion impressions, featured on 1000 broadcast segments, 200K new FB fans

Try Sticky Branding

In our experience, a great brand name can be a significant awareness-builder and buzz-creator when launching new products. (We have also observed that not all brand names are great.) -When thinking about brand names, we have developed our own unique way of sorting out winners and losers. -Backed with the clout of enough money, any brand name can be made memorable. -But true winners stick with us and generate word-of-mouth without having to be pounded in with millions of advertising dollars. Ex: Great brand names like Haagen-Dazs are invented, not borrowed. In addition, such brand names evoke strong emotion and spark personal connections that endure year in and year out. Haagen-Dazs is an invented word, yet it has a rich and sophisticated European ring to it. Because it is invented there are no conflicts with existing trademarks or brand names. Because it is invented the brand name does not carry any negative baggage and only conveys the positive emotion-rich meaning we want. Ex: Good brand names like Stainmaster are engineered from existing words. It is not invented, but can't be found in the dictionary either. These brand names perhaps don't create as strong of an emotional connection as Haagen-Dazs, but are very clear on the functional benefit. -In the case of Stainmaster Carpet it is carpeting that masters stains, and so on for brands such as Energizer Batteries, Pizza Hut, Dunkin' Donuts, and Rice Crispies Cereal. -Brand names using acronyms such as IBM, UPS, AT&T as well as brand names using personal names such as Honda, Howard Miller, and Pulte are challenging because, on their own, these brand names do not convey any particular meaning. -On the other hand, with enough Big Business money they certainly can be good brand names. -The worst brand names have a dark magic all of their own. They evoke negative thoughts and can result in failed products. (Ex: Ben-Gay Aspirin, an unsuccessful analgesic pill evokes thoughts of swallowing smelly Ben-Gay cream rub.; The list of bad brand names goes on; Cocaine Energy Drink, Colgate Kitchen Entrees, Frito Lay Lemonade, and Harley-Davidson Perfume are also in the stinker-brand-name hall-of-fame.) -Brand names may not make a successful product, but they can kill a product. -Test brand names for likability, memorability, and meaning. -People may not pay more for a great brand name, but they may just try it once or twice to see if they like it. Ex: -Boudreaux's Butt Paste -Gorila Snot hair gel

Power of Pleasing Personality

Lauren Luke's popularity is attributed to several factors. First, she posts videos on a hot topic. With women all over the globe with a keen interest in looking like their favorite celebrity, it's easy to see how videos addressing this subject would be popular. Second, she is friendly and natural on the camera. She has likable confidence. Although she clearly is an expert on her subject, she is down-to-earth and takes a conversational tone that makes viewers enjoy their time with her. In the end, this is what has kept viewers coming back again and again to see Lauren's next celebrity makeup tutorial. Lauren Luke is proof that the internet is one of the most powerful marketing tools of our times. It seems as though anybody with limited resources can be successful today with the help of the internet. In the case of Lauren, she found a pain-point and delivered a solution with just a video camera in her small bedroom.

Topic 3.6: Startup Marketing Essentials: Finding Leverage

Looking for leverage is a key to finding investors, partners, anchor customers, and benefactors. In particular, anchor customers and benefactors lend important momentum to startups.

Unravel the Channel

Marketing channels make or break new products. -Startup marketers, of course, must Place new products in the hands of distributors and retailers who want to sell it. -But even more important, we have to put the product where people (1) are ready to buy, (2) are able to pay, and (3) know that good alternatives are out of reach. Ex: -Del Sol color-changing vacation-themed t-shirts are best sold in resort areas. -Red Bull energy drinks are best sold in convenience stores and college campuses. -Expensive, beer-soaked hotdogs are best sold in ballparks. *Give-away Contests* -personal training contest; the others who entered but did not win for the year still get one free session with a personal trainer (gives them a chance to experience what its like with one but it is hard to see if you don't experience it firsthand) *In-Store Challenges* -Ex: how do you get people into appliance stores to consider purchasing your air conditioners -nose-a-meter: Customers with sufficiently-sized noses get 25% off the purchase of a BGH Air Conditioner. Large noses can push a button in the nose-o-meter which causes the nose-o-meter to blare "big nose - big nose - big nose" and the light on top to start flashing. Thousands of noses were put to the test. Hundreds of discounts were given to winners. *Addictive Samples* - Once you've located a channel where thousands of people are ready to buy and pay a premium, sampling is a great tactic if the product is right. The more irresistible the product; the more suitable it is for sampling. -Ex: Pinkberry on the Las Vegas strip

Topic 5.8: Startup Marketing Essentials: Selling with Events

Marketing events, particularly when they engage the mind and heart, are powerful tools for launching cash-starved startups. Staging successful marketing events will take entrepreneurs a long way towards building a successful business.

Innovators

Markets for new products consist of two types of buyers: innovators and imitators. -the number of innovator-buyers can be very small, sometimes as small as 2-3% of the total number of people that will ultimately make purchases in the product category. -Nevertheless, these early adopters can get a new idea moving forward and take a startup directly to the goldmine.

Lessons from Edison

Product demonstrations generate a lot of energy and interest. When done well, they also can lead to purchases Ex: Edison knew all about Entrepreneurial R&D. He borrowed and improved upon the ideas of at least a couple of innovators; the scientist Humphry Davy, who made the first light bulb in 1800, and the physicist Sir Joseph Wilson Swan, who in 1860 invented the carbon filament. To successfully commercialize the light bulb, Edison bought the patents from its inventors, discovered how to make a bulb burn for more than 1,500 hours, and then discovered how to get people excited about it. -Edison was an expert at making compelling product demonstrations. On New Year's Eve, he arranged for a public demonstration of his incandescent lights. Interested and influential spectators arrived on special trains from New York City to view the Menlo Park laboratory, grounds, and an adjacent boarding house glowing with 100 electric light bulbs. Ex: Edison believed his best chance to win the electricity war was to convince the public that AC was too dangerous to have in their homes. His main weapon in the fight was making public demonstrations of AC's lethal power. An Edison employee staged numerous events for reporters in which dogs and cats were "Westinghoused" to death with AC electricity. The biggest demonstration, however, was the electrocution of the ill-tempered, man-killing Coney Island elephant Topsy, which was witnessed by more than 1,500 reporters and interested bystanders. The papers reported that cyanide couldn't kill the elephant, but Westinghouse electricity could.

Social Media and the Puffer Fish

Puffer Fish can act big even when it is not. -When swimming easy, the puffer fish looks like most any other little fish. -When stressed, the puffer fish pumps water into its stomach that transforms it into three times its usual size. -For a little fish living in a world of much bigger fish, being able to puff up a few sizes is critical to survival. -The same can be said for new businesses competing against bigger companies. Startup Location Examples: where would you meet with your potential client? your dirty closet office space? NO. rent an office space for a day. Leverage your contacts (putting plaque on the front entrance with all other company names in the building; have the secretary be in on it too) -When startups go where the money is, and they must, their competitors will be big in terms of money, resources, personnel, and image. -Customers and investors often equate big with safe. "It's safe to do business with Big Blue because, well, they're big." IBM, aka Big Blue, made a living on this line of reasoning for years. -Unlike the happy thoughts that come to mind when doing business with a large, well known company, many unhappy thoughts may come to mind when doing business with a startup. -Potential customers prefer buying from a stable, dependable company, but this business is not established. -Business advisors prefer working with a viable, ongoing company, but this business is unproven. -Suppliers and employees prefer teaming up with industry leaders, but this business is a niche player. -Partners and Investors prefer throwing support behind a reputation builder, but this business doesn't have a blue chip track record and may even harm one's reputation. *New businesses are stressed. When they swim frantically around like little fish or bite off more spending than they can chew, they will choke and fail. When they puff up like a puffer fish they often succeed. One way to puff up is to dominate a vertical market where you have a natural advantage before expanding to other markets.* Ex: Francois Lane, serial entrepreneur and co-founder of CakeMail a whitelabel email marketing service, insists that new businesses "must select one vertical market and focus on complete world domination of this specific market." He also points out that new businesses are best off when selecting markets that have their own network of trade shows and industry publications. When you are small, it is important to attack a market where it is easy to identify and connect with marketing channels. *Social media provides a spectacular way to puff up your market presence. For many startups, your website is your company. Build a look and feel for your website that is equivalent to an IBM. Show real people. Show a brick and mortar location. Include a telephone number. Learn what makes a productive splash page. Highlight awards, accomplishments, notable customers, and interesting product stories. Blog the victories. Twitter the fun. Facebook for friends. Get involved with a cause popular with social media followers. Bring your pitch to life with YouTube.* Ex: Puff it Up: Phone Service -BJ's brother's wife acting as his secretary and having all calls forwarded to her number and then saying "please hold Ill connect you with ____ or ____" but really it's still her playing those roles Ex: would you wanna pick your client up in an old station wagon? NO. rent or borrow a nice Audi to play the role

Finding Golden Threads

Sales to innovators will not sustain a startup, but will get it going and moving in the right direction. -Consider mining for gold with the early adopters; the customers that will get your startup out of the gate and running! -Pete Seeger wrote the lines, "Oh, had I a golden thread and a needle so fine, I'd weave a magic strand of rainbow design." *Every entrepreneur needs to find a golden thread to build a successful business. Innovation-loving beta-test customers can be that thread.*

Can't Say It, Then Sing It

Simple lyrics and simple music are memorable; and happy music makes for happy memories. -A great jingle has the power to transform how people think about a product. -The singing jingle, "Hooveround takes me where I want to go, where will it send me," transforms a stinko motorized wheel chair into a sought-after mobility device. Ex: Many otherwise boring products work magic in the marketplace because of their jingles. Meow Mix is just another cat food until cats start singing, "Meow, meow, meow, meow! Meow, meow, meow, meow!"

Topic 5.7: Feed a Frenzy

Startup Thoughts: 1. Be a closer by feeding a frenzy! To survive, startups must accelerate the sales cycle and time-to-money. 2. Fear, uncertainty, and greed move investors, anchor customers, and benefactors to take action. 3. Entrepreneurs need to involve three or more "sharks" to keep their startup moving forward. *give people a reason to take action today!* -vendors, channel partners, VCs can be distracted and slow to act -hit them where it hurts--fear, uncertainty, greed (FUG) >> fear: someone else will get it first >> uncertainty: are they going with someone else? >> greed: don't want to miss the boat

Topic 5.2: Have a Love Fest

Startup Thoughts: 1. Customers can be an effective salesforce. Invent ways for customers to share positive experiences face-to-face with potential customers. 2. Consider expos and conferences, classes and contests, blogging and clubs when putting together a Love Fest. *let customers and "sense of belonging" do the selling for you* 1. let your customers sell for you 2. orchestrate a process that gets potential customers selling themselves 3. the ultimate credibility source is customer to customer

Topic 5.1: Marketing Events

Startup Thoughts: 1. For a startup, marketing events can be more powerful than advertising. 2. Be experiential. Sell a consumption experience as well as a product. Create an exciting hands-on activity with the product, and then provide a free souvenir that brings the excitement home. 3. Marketing events can be activities, happenings, gatherings, tournaments, competitions, matches, races, and games. 4. Can't afford to stage your own event? No worries, just "borrow" one. *do more than a promotion, have an event or competition* *your marketing events are advertising *an experience* and not just a product. People remember their experiences*

Topic 5.3: Compelling Demonstrations

Startup Thoughts: 1. Not all product demonstrations are equally good. The best demonstrations are participatory and active. 2. Use demonstrations to encourage product adoption. Consequently, find ways to emphasize (1) relative advantage, (2) compatibility, (3) lack of complexity, (4) trialability, and (5) observability. 3. Demonstrations worth doing will "blow away expectations" of what is possible. *turn reason-to-believe into see-to-believe* Ex: Pepsi Challenge *1st moment*: "the question" -make a killer comparison -ask something counterintuitive -ask something wild or different ("says he prefers cola over the leading brand Pepsi") *2nd moment*: "moment of truth" -make a lasting *positive* memory (reveals that he chose Pepsi on his own)

Topic 5.4: Brand Names, Slogans, Jingles

Startup Thoughts: 1. Products with great brand names, slogans, and jingles may not earn higher margins, but they will earn higher awareness and memorability. 2. For an entrepreneur, the best brand names often use invented words and convey emotions appropriate for the pain-point and solution. 3. With enough money, any brand name can be pounded into our minds. Startups, however, don't have deep pockets and must work smarter than Big Business. *build a "sticky" brand*

Topic 5.6: Learn to Close the Deal

Startup Thoughts: 1. Startup founders need to get into the field, meet with customers, sell and close. 2. Entrepreneurs have several challenges when selling. They lack credibility, have much less power than the buyer, and may have difficulty stepping past their big egos. 3. How far should an entrepreneur go to close that first big sale? All the way. Don't give "no sale" a chance. *don't give "no" even a tiny chance*

Topic 5.5: Let the Channel Create the Need

Startup Thoughts: 1. The marketing channel determines price and creates demand. 2. Startups must go where the money is. That is, they must put their products where people are looking to buy. 3. Startups should pick marketing channels that help them sponsor give-away contests, in-store challenges, and addictive sampling. 4. A multimillion dollar question for a startup is, "How do we get our product to the people willing to pay for it?" *balance product cost and customer value to maximize profit*

Don't Lie with Statistics

Support product claims in product demonstrations with facts and figures, but make sure the facts and figures are accurate and really do support your claims -Quantifiable facts and figures are easy to think up and some well-known companies do a very good job at it. Ex: Juicy Juice is good for kids - 100% juice for 100% kids. -Products MUST deliver on claims. -Trumped-up promises and fabricated sales pitches and demonstrations won't fly in an info-tech world of instant information access, online reviews, social media, and special interest blogs.

Winning an Anchor

The need for anchor customers is nothing new. -For example, a local bakery got its start by providing low-priced, high-quality bread and other baked goods such as impossible-to-resist giant cookies to area restaurants, cafeterias, and catering services. -These businesses were their anchor customers. -With the anchors established, the bakery could make their brick-and-mortar retail store a success, charging premium prices for their tried-and-true products, and even were able to add a few new products not offered through other marketing channels. -Anchor customers get your startup going and keep paying the operating bills through good times and bad. -No one gets rich from what an anchor customer is willing to pay, but these customers will create a foundation from which to grow into profitability.

Relative Advantage

The product must have a distinct advantage relative to alternatives. We think of relative advantage in terms of value-in-use. A new product can offer greater value-in-use than alternatives along many different dimensions. For example, compared to existing products, the new product may create greater economic value by being less expensive to purchase, less expensive to operate, less dangerous to use, or less time-consuming to use. Relative to other products, it may also create functional value by being easier or more fun to operate, offering a more complete set of features, or broadening its application to more situations. New products may also create more psychological value than other products by fully tapping into emotional needs such as feeling smart, successful, helpful, confident, productive, and so forth.

Work Smarter not Harder

What is a horse?? -people with the ability, willingness, and personal clout to help you promote an idea or product (the must have quality of startup marketers) -be smart and work smart. -find the sort of horses that you can ride to the bank -a good horse will be a champion for your competitive angle -identify and partner with people who have the skills, energy, and influence you need to succeed with your product and target market (after all, with startups and other types of ventures, "it's not what you know, but who you know" that determines success or failure.) -entrepreneurs don't lack the energy or willingness to put in 90-hour weeks. (*Entrepreneurs lack experience, resources, and credibility*)

Don't Choke a Feeding Frenzy

When a great new product idea attracts national attention, it is probably unwise to get in the way of the feeding frenzy. When people circle a product they like and want, but can't get, someone is going to get bitten. Ex: Many analysts wonder why Apple made exclusive arrangements with AT&T and limited their opportunity to sell the phone on all wireless platforms. The policy left many consumers frustrated. They wanted to buy an iPhone but couldn't buy because they were locked into a T-Mobile or Sprint. contract.

Rule of Three

based on the idea that it takes a minimum of three sharks swimming around your product idea to get someone to take immediate action. -Many entrepreneurs are so excited about finally finding a willing partner, investor, or distributor that they usually "give in" to unreasonable demands or "give up" future opportunities to make money in order to complete a deal. -You don't have to do that. -If you are going to survive and thrive as a company, you must pitch to a minimum of three organizations. -To do otherwise is success-a-cide. Unfortunately, it is all too common for us to hear the following statements by entrepreneurs: >> "To start our company, we want to work closely with just your group." >> "We are not talking with anyone else except you because we value your relationship." >> "We want to give you exclusive rights so that you will have a competitive position in the marketplace." *When you don't allow others to look over, greedily consider, and fiercely compete for your product idea, you do not motivate partners or buyers to take immediate action. Hence, no FUG factor, no contracts, no urgency, and limited sales.* -Key investors, distributors, and customers need a compelling reason to take action. -The level of excitement and appetite for a deal increases as others look at, sample, and negotiate. *Using the FUG factor is an important way to accelerate funding and initial sales and they are a key to the all-important accelerate-time-to-money life blood for new companies.*

Brand Champions

customers who love the firm's products and then advocate or champion the products to others -very important to growing a startup business (also known as product advocates, or the Love Group) Ex: think of them as a huge herd of wild stallions that jump to action at your command and set a positive, enthusiastic tone for everyone that sees them. *if someone thinks you've got a cool product and they have influence in the industry, leverage the leverage*

Topic 4: Act Big

dominating a market before expanding to other markets helps you look but *Don't act small* -*Potential Customers* want stable and reliable -*Business Advisors* want vital and growing -*Suppliers and Employees* want dependable and industry leaders -*Partners and Investors* want blue chip and reputation builders *But you are not established, still unproven, a niche player, and don't have a track record* *Best Practices* 1. Puff it up 2. Grow with Borrowed Interest 3. Play Big with PR 4. Get Your Swagger On 5. Dominate Trade Shows 6. Master Social Media 7. Reach Out with Crowdfunding

Sales to innovators can....

get a new business going -Knowing a little bit about the buying culture of innovators can go a long way in helping entrepreneurs sell to them. -First, innovators believe that new technology initially costs more than the old way of doing things, but that costs will come down with time. (Ex: After all, ENIAC, the first large-scale computer, cost $500,000 back in 1946 and only performed 5,000 operations per second. Today's home computers perform billions of operations per second at less than a hundredth of ENIAC's price tag.) -Second, innovators apparently can't say no to new technology even when they know it falls way behind on the bang-for-buck buying curve. >> Innovators crave new technology, but fear they can't afford to buy new technology. > Entrepreneurs to the rescue! Entrepreneurs can attract innovators by asking innovators for their help. > By recruiting innovators as product-development partners, startups can offer opportunities for innovators to move quickly and buy new technology at bargain prices before it is introduced to the general public at nosebleed skim-the-cream prices. > But from the perspective of the entrepreneur, offering a bargain price does not mean offering a price so low that their new business won't be able to make money or at least make payroll.

Borrowed Interest

putting regular milk next to almond milk, coconut milk, etc. Ex: Leveraging What's Relevant -Arby's sign reading "Bring in BYU stub for a free turnover" right after they lost a huge game when the QB turned it over

Crowdfunding

reaching out with crowdfunding Mini Case: Bandar (Dan and Salani's Monkey Sauce) -drawing on Dan's experience with the Wharton Follies to put together a goofy Kickstarter video describing their sauces and goals, they set a 45-day goal of $5,000 -within 48 hours, the project had met its goal and continued to climb. A large portion of the decisions--even at higher tiers--came from complete strangers -1,043 backers -$26,527 pledged of $5,000 goal -0

To be effective, entrepreneurs should boil down the core of their idea into a concise clear pitch in...

*25 seconds to 2 minutes* -Most investors have a short attention span. If you can't boil your idea down into a short explanation in less then 2 minutes, then you really don't understand what you are selling. And, neither will the consumer understand.

4 Types of "Horses":

1. *Sherpas* -let me tell you all about it and show the way 2. *Evangelists* -I'll prepare the way by stirring interest and awareness 3. *Patrons* -you pat my back and I'll pat yours 4. *Hunters* -I'll find the opportunities and bring them home

Play Big with Publicity

Ex: Klymit Media Features -won a shit ton of awards and features in magazines Ex: Autism Journeys - Failing Business

Innovators vs. Imitators

Sociologists tell us that innovators are fundamentally different animals than imitators. -When it comes to purchasing behavior, *innovators* (1) want to buy the next new thing before having to pay full price, (2) believe they deserve special consideration because they are taking extra time and effort to test an unproven product, and (3) refuse to sit back and watch anyone else have something new that they don't have. *Imitators*, on the other hand, present their own marketing challenges. -Imitators often are apathetic toward anything new and are not shy about expressing their dissatisfaction when something new goes wrong or fails to please.

Topic 3.2: Prospect for Beta-Goldmines (Part of Leveraging Leverage)

Startups Thoughts: 1. Recruit early adopters to provide capital to develop your new product. 2. Learn the keys to selling innovators and how they differ from selling imitators. 3. Give innovators what they want; the next big thing at a bargain price. But make sure to offer a bargain price that keeps your startup in business. 4. "Build it with your customers and they will come," is the real Field of Dreams.

Beta Goldmines

Tap into financial lifelines to bring a product to maturity. -Consequently, when looking for beta testers to transform into beta goldmines, picking customers with a strong need to believe is a key success factor. -In other words, the pain-point must be particularly painful for beta goldmines or the need for market leadership must be particularly strong. >> Give innovators what they want; the next big thing at a bargain price. >> "Build it and they will come," is just a Field of Dreams 1. product development 2. alpha test 3. beta test 4. release Ex: Zions Bank-->Allegiance

The Role of Big Ideas

A company can't think big and act big without great ideas - Chuck E. Cheese founder: believes that having a great idea isn't necessarily the same thing as having a new idea. He says, "Everyone who's ever taken a shower has an idea. It's the person who gets out of the shower, dries off, and does something about it who makes a difference." -Do something about your great ideas. Find effective ways to communicate them to customers

Co-branding your product or service with a large, well-known brand would be an example of...

*Being a puffer fish* -When you connect yourself with a strategic partner or brand, you look larger then you are. When you are small, connect yourself to someone who is big, and you look big.

You should concentrate on trying to convert the hate group.

*False* -Most startups and larger firms fail when they spend more energy on fighting their hate group then on understanding their Love Groups. -You should concentrate on trying to convert the swing group through the eyes and heart of the Love Group. -Focusing on the hate group takes your eye away from the true mark--customers who love you and are engaged in buying your products.

Startups should always try to land a nation-wide anchor like Walmart or Costco?

*False* -New ventures should be very careful when selecting an anchor. Big anchors are big risk because they have high expectations, high inventory demands, and consumer friendly return policies that can put a new venture out of business.

"If you want something done right then, do it yourself," should be the mantra for all new startup management teams?

*False* -The mantra for new startups should be, "Its not what you know, its who you know" and how well you can accomplish important goals together. Working smart and relying on influential and credible others is the sure way to success.

FruitStickles is a new venture that sells a wooden skewer used for sticking together chunks of fruit seasoned with cinnamon and tropical fruit flavors. The goal behind FruitStickles is that it gives fruit an extra boost of flavor to tempt children into eating more fruit. In addition to health-conscious parents, which group below would most likely consider themselves significant benefactors of FruitStickles success?

*Fruit growers* -Fruit growers are mostly likely to benefit in a big enough way to garner their support for the FruitStickies venture.

A new venture's first opportunity for real growth often lies with which group of customers?

*Innovators who make up 2-3% of the market* -Innovators are critical to new-ventures because they are the first to purchase new technology or new products and because they want to buy the next big thing.

Your most powerful tool for successfully recruiting the right people to join your advisory board is:

*Providing a concise business prospectus outlining the role they will play and time it will take* -Talented, experienced advisory board members want to understand the startup's financial model, competitive angle, and the role they personally will play. They need to understand the time commitment and be compensated for travel expenses, meals, and a fair market value for their time.

The best way to play big would be:

*Purchasing a large trade show booth at an industry convention* -A good way to play big is by attending a trade show and looking successful. Trade shows are a great time to highlight your initial success by surrounding yourself with key customers who are excited about your product.

The principle of building an advisory board is: "if you don't have a wealth of experience and/or a powerful reputation _______?

*Recruit people who have just taken the successful steps your business needs to follow* -An advisory board should be made up of people who have the talents, and overall experience to guide you new venture to success. Remember, experience counts, it just doesn't have to be your own.

In general, entrepreneurs should always:

*Sell to the swing group through the eyes of the love group* -The number one rule of marketing is, "Sell to the swing group through the eyes of the Love Group. The love group, i.e., Brand Champions, can answer why consumers want to buy and are emotionally connected to your product or service.

Accelerate Time-to-Money

*The 5 Tools* 1. *UPC*:unique product claim -stand for something different that is important 2. *NTB*: need to believe -large addressable market with large addressable pain(need) 3. *DTS*: dominate the situation -deliver genuine delight in a specific usage situation 4. *RTB*: reason to believe -easy to demonstrate and verify the distinction and benefit 5. *QTS*: quantifiable support -quantitative evidence of product superiority *Finding Leverage* 1. Ride Horses 2. Prospect for Beta Goldmines 3. Land an Anchor 4. Seek out Benefactors 5. Build an Advisory Board

A good way to think and act big as a new venture would be...

*Use social media and other Internet tools to highlight your product and company* -Startups must earn success, they can't afford to buy it. New ventures should think big and act big, not spend big.

The million dollar question for a new venture is?

*Who will benefit most if I succeed?* -Who will benefit most if I succeed is the million dollar question. The answer to this question determines your first investors, key strategic partners, and even your anchor customers.

Begin with Advisors

-A crucial part of a successful startup is to use a well-connected advisory board. -An advisory board can extend your social network of influence to increase its effectiveness in attracting investors, customers, and top employees. -No new venture is too small or too large to benefit from an advisory board. -Leveraging advisory board experience, expertise, credibility, and connections is the best way to succeed in today's competitive markets. -A startup gains a big boost from building a national or at least a regional reputation. -Perhaps one of the best-kept secrets of successful ventures is they know that reputation and experience counts, but that it doesn't have to be their own reputation and experience. We can't emphasize enough what we stated earlier about finding and leveraging advocates. -Successful entrepreneurs know that hard work, i.e., working 90+ hours a week, rarely leads to a successful new venture. -It is the smart work of yourself and others, especially a credible and supportive advisory board, which leads to new venture success. -Many startups make the mistake of developing their board of directors instead of beginning with an advisory board. -Whenever you start a new venture, leverage the experience, wisdom, and creativity of advisory members to accelerate your growth and time to money. (also connections to create your network) >> Advisory board members should not be limited to people who have simply *done things*, but people who can get things done. >> Also include people who possess local, regional, or national name recognition. (For example, prominent politicians, retired executives or managers, and industry gurus make great advisory board members.) -Advice really is cheap and advisory board members can save you years of painful and costly mistakes. >> Advisory board members who are willing to use their own time, influence, and contacts to promote your company are truly priceless. Look for advisory board members who are motivated to help you because they love your product and love to be associated with up-and-coming new ventures. >> Look for advisory board members that have just walked the path your startup is now treading. >> Minimal resources are needed to attract participation in an advisory board. >> Everyone loves a winner, and advisory board members are no exception. (If perks like free lunches, dinners, or golf outings don't work, then attract advisory board members with a nominal 5,000 to 10,000 shares or options; assuming around 10,000,000 shares are presently outstanding.) >>Building a connected advisory network is much more effective than setting out to create your own social network from the ground up.

Sailing the Startup Ship

-Anchor customers keep startups going and give it a platform for growing. -Finding anchor customers must be a top priority. -For a moment, imagine that different kinds of businesses are like different kinds of ships. -The Big Business ship likes to drop anchor in a calm and sunny harbor. The heavy anchor and calm waters make everyone on board the Big Business ship feel safe and secure. -The startup ship is like a pirate sailing the open sea. -The captain of the startup business ship doesn't like to drop anchor. The captain knows the ship only moves once the anchor is on board. *Startup businesses must get an anchor on board before they can start sailing.* (with an anchor on board, you can start sailing!) *Make Partnerships* -give discounts in exchange for being a reference -test the "newest things" on them -make them feel like a partner *Don't* -promise the world...unless you really can deliver -promise exclusivity

Pick Right-Sized Anchors

-Be careful when choosing an anchor. *Big anchors don't always suit small startups.* 1. *Payment Practices* -bigger anchors pay slower 2. *Vetting Practices* -smaller and growing anchors set lower hurdles 3. *Distribution Practices* -online and TV shopping channels may make it easier to manage inventory -An important decision point for a startup is whether the potential anchor is more likely to foster a startup business or let it flounder and sink under the weight of their way of doing business. -Unfortunately, we have seen far too many examples of the latter rather than the former. -A startup the size of a dinghy goes down fast when they take on an anchor fit for an ocean liner. Ex: Every time an entrepreneur walks into our office to announce they've landed a big account with a national retailer such as Costco, Walmart, or Home Depot, we get nervous. Don't get us wrong; these are wonderful companies that provide tremendous value for customers. However, these companies simply are not geared up to foster most startups.

BP: Prospect for Beta Gold Mines

-Beta Customers are your customers who purchase in beta stages -Beta Customers fund your R&D activities -Getting the first person to buy is unbelievably expensive. Getting the second person to buy is unbelievably cheap *Don't get Greedy* *Time to Adoption Chart* -Innovators: 2.5% -Early Adopters: 13.5% -Early Majority: 34% -Late Majority: 34% -Laggards: 16%

Fit with Routine

-Beta-products should also fit with a customer's current way of doing things or daily routine. -Consider the Dvorak keyboard. Back in 1936, Dr. Dvorak patented a simplified and much improved typewriter keyboard layout to solve the fatigue and inefficiency problems created by the gold-standard QWERTY keyboard layout. -In today's world, the use of computers makes the streamlined Dvorak keyboard available to anyone who wants it; however, the old QWERTY keyboard introduced back in the 1860s continues to dominate. -The Dvorak keyboard fails to please because it does not fit with a customer's current way of doing things which, in turn, usually means that it does not improve a customer's way of doing things.

The Wizard of Oz is a classic children's story about seeking out benefactors....

-Dorothy Gale has been caught up in a tornado and carried to the mythical Land of Oz far away from her home in Kansas. Unfortunately for Dorothy, she lands a house on and accidentally kills the Wicked Witch of the East upon her arrival. Consequently, Dorothy makes quite an enemy out of the dead witch's sister, the Wicked Witch of the West. Dorothy desperately wants to return to her home in Kansas and decides to travel to the Emerald City to enlist the help of the Great Wizard. Dorothy knows that she cannot make it to the Emerald City on her own because the Wicked Witch will try to slow her down, stop her, or maybe even kill her along the way. -Dorothy needs to seek out benefactors and she keeps an eye open for anyone that will also greatly benefit from a trip to the Emerald City. -At the journey's outset, Dorothy runs across a scarecrow at a crossroads. She removes a nail to take the scarecrow down from his post and finds out the scarecrow desperately wants a brain. Dorothy suggests that the scarecrow can get a brain from the Wizard in the Emerald City. The scarecrow joins Team Dorothy. -Next, the two stumble on a rusted tin man. Dorothy liberally applies some oil from an old oil can and finds out the tin man desperately wants a heart. Dorothy suggests that the tin man can get a heart from the Wizard in the Emerald City. The tin man is now part of the crew. - Not long afterwards, the little group is startled by a lion who attacks the travelers and tries to bite Dorothy's little dog Toto. Dorothy, heedless of the danger, swats the lion on the nose to protect her dog. Dorothy then has to comfort the lion as he whimpers about his nose, and finds out the lion is cowardly and desperately wants courage. Dorothy suggests that the cowardly lion can get courage from the Wizard in the Emerald City. The lion completes the team, and then the three benefactors successfully get Dorothy to the Emerald City. -But the story does not all go in Dorothy's favor. Turns out, the Wizard also needs a few benefactors. He needs someone to kill the Wicked Witch of the West. When Dorothy and her team arrive, the Wizard gives everyone the royal treatment. He then gives Team Dorothy an audience and finds out Dorothy desperately wants to return home, the scarecrow desperately wants a brain, the tin man desperately wants a heart, and the lion desperately wants courage. The Wizard promises to give each benefactor what they want most if and when Dorothy brings him the broomstick of the Wicked Witch of the West. Like Dorothy, the Wizard is a born entrepreneur. He really understands how to spot benefactors. -*It is an unwritten law of the universe, apparently hidden from all non-entrepreneurs, that when you give people what they want most, they are happy to give you what you need.*

Benefactors in the Value Chain Example

-DuPont Stainmaster is the world's single bestselling brand of carpet, but not many people know that DuPont doesn't manufacture carpet. -DuPont manufactures the nylon and stain-release sauce that other manufacturers and carpet mills process to make the carpeting we have in our homes and businesses. -DuPont found benefactors to transform the carpet industry from a narrow-margin heartbreaker to a high-flying profit maker. -DuPont managers fought commodity nylon prices for generations, but then decided to fight back by offering something that every player in the carpet industry wanted most. -Every carpet manufacturer and retailer wanted a premium-priced carpet that consumers would recognize and trust. -Everyone in the industry wanted a profitable product that would sell itself. -Before Stainmaster, all carpeting looked pretty much the same to consumers. -Since all carpeting looked the same, consumers bought on price - bad news for the entire value chain. -Premium-priced, high-quality, easily recognized Stainmaster brand carpet changed all that and consequently found benefactors all along the value chain willing to promote DuPont ahead of all other brands of carpeting.

Million-Dollar Question

-Early on in the new venture ask the question, "Who will benefit most if I succeed?" -Think through the question carefully, because the answer will help you find initial investors, key strategic partners, and perhaps anchor customers. -Learning to ask the right questions is fundamental to startup success! -If you were in dire straits, who would you turn to for help? Would you try to tap parents, friends, or the local bank? -If you were thinking like an entrepreneur, you would look for a benefactor that stands to benefit a lot from your growth and long-term success.

Winning an Anchor Example

-In the manufacturing world, new factories get built by making commodity goods that "fill the factory" with high-volume, low- or no-margin production. -Once the factory is rolling, design engineers and marketers start looking for opportunities to swap out the manufacture of low-margin goods with high-margin goods. -Not every manufacturer, however, has the good sense to bring anchor customers on board before investing millions of dollars in product development and/or building a new factory. Recall DuPont's cautionary tale of Kevlar. -DuPont spent $500 million to develop and commercialize Kevlar as a replacement for nylon as tire cord, but did not lock-up tire manufacturers. The tire manufacturers decided on steel as a better alternative and took a pass on Kevlar. -This left DuPont with a very expensive product in search of a market; a market they never found. Startups can't afford this type of misstep. -If a company as well-funded as DuPont needs an anchor customer to successfully launch a new product, then entrepreneurs certainly shouldn't try to survive without one.

Benefactors in the Value Chain (Startup Example)

-MyFamily is a leading online subscription service for providing genealogical information and collecting family photos. -Over the past decade, it has grown rapidly into one of the Internet's top 20 properties. -To accelerate their growth, MyFamily raised more than $75 million in funding from benefactors. -MyFamily looked at their value chain and asked the question, "Who will benefit if I succeed?" -The answers company managers came up with were Intel, Compaq, AOL, and Kodak. Intel benefits because family-history buffs want fast computer processes to digest their mountains of digital photos. -Compaq benefits because family-history buffs want new computers with lots of hard drive space, up-to-date memory, and Ethernet connections to access and post online genealogical information. -AOL benefits by providing a value-added service to its growing base of family-history buff Internet subscribers. -Kodak benefits by repositioning itself in the digital photography sector by building on the traditional strength of family photography. -My-Family increases the need for Intel, Compaq, AOL, and Kodak products. In addition to capital raised from these investors, My-Family also received publicity from their association with these companies. -At no cost to MyFamily, one national TV spot for Intel prominently featured a shot of the MyFamily webpage.

Right-Sized Anchor Example

-One new business signed a contract with a national retailer, but missed the deadline for delivering their product to the appointed distribution center by several hours. -The national retailer declined to reschedule a pickup and told the new business to wait another year before trying again. -Yet another new business shipped inventory worth hundreds of thousands of dollars to a national retailer notorious for paying vendors slowly. -The entrepreneurs, having taken out second mortgages and maxed-out their credit cards, got nervous and tried to pressure the retailer into paying with aggressive, bordering on rude and unprofessional, phone calls and letters. -In response, the national retailer returned the entire inventory. The entrepreneurs were then left with lots of debt, lots of inventory, and few prospects for earning any revenue. Ex: ChapGrip & Walmart, did not end up selling so they took it all off the shelves and it was done

Benefactors in the Value Chain

-Products do not stand alone. -Products are part of a value chain that extends from components to customers. -Understanding the value chain and where your startup fits in can be a powerful tool to give your new business legs. -To find benefactors, explore your product's value chain. >>Which businesses provide components as inputs to your product? >>Which businesses use your product as a component for their product? >>Which retailers sell and service your product or companion products?

No Love Group, No Worries

-Startup marketers like the simple Love-Swing-Hate approach to attacking the marketplace, but often point out that their new products, many of which are just in the idea stage, don't have a Love Group. - They raise an important point and put themselves on the threshold of discovering what really sets a successful startup marketer apart from a frustrated would-be entrepreneur. -Successful startup marketers don't expect their Love Group to find them; they aggressively seek out their Love Group. >> "Build it and they will come" rarely works in today's world of information overload and product proliferation -Realizing we don't know our Love Group is the first step in beginning to prospect to find a Love Group. -There are many ways to prospect for a Love Group, but we suggest bringing eight to twelve people together that may benefit from the new product, feeding them pizza, and soliciting their impressions. -After explaining the product concept, ask questions like, "Who would love this product? What would they love about it? Where and how would they use it?" - Listen and note the responses, but more importantly, observe the participants and look for those few who are completely engaged and articulate. -Ask them back to another session so that you can find out more, because they are your Love Group. -One prospecting session will not be enough to establish a detailed profile for the Love Group. In our experience, about three to five prospecting sessions are needed, and they should be spread across a variety of geographic regions. -Sometimes prospecting doesn't yield much gold. >> If that happens, then it is time for some careful reflection. >> Do I need to change my message? Do I need to change my target market? Do I need to set this product aside for a time and pursue another opportunity? >> But don't resort to thoughts of exerting personal pressure, manipulation, and coercion.

Elevator Pitch

-Startups looking for funding can impress venture capitalists and other potential investors with a snappy and concise overview of their big idea. -the 30 second to 2 minute elevator ride. -It is the amount of time that VCs will spare to identify good ideas and successful business teams that have promise and eliminate those that are not ready for funding -When putting together an elevator pitch, we want to hit hard with the most important information up front. -We want investors to get interested enough to invite us back to make a bigger, more detailed presentation. Ex: If we are pitching a smartphone app to locate restaurants that deliver to your office or home, we would pull out are smartphone and ask, "Have you ever wondered which restaurants will deliver meals to your home or office." "Here is an app called grubHub." "Just type in where you are, find close-by restaurants and order online for free." "You can look for a specific type of meal too." "We have over 5000 restaurants signed up in Chicago, Boston, Denver, New York City, and Seattle." "We are putting together funding to expand into more cities." "How would you feel about scheduling a time to review our business model and ask questions of our business team."

The Right Kind of Friends

-Surround yourself with reputable people, great ideas, and trustworthy companies. -New businesses don't need to and shouldn't even try to fight battles all on their own. There is plenty of good help around once we know what to look for! -"Get the right people on the bus and then figure out where to drive it," -author Jim Collins. >> For new businesses, the right people fall into three categories - connectors, mavens, salespeople *Connectors are people specialists* -Because of their winning personality, self confidence, curiosity, and other intrinsic traits, they have a knack for knowing lots of people from many different walks of life, vocations, avocations, and locations -Rely on them to gain access to worlds of people that you need to part of. -Connectors connect new businesses to new worlds of people. *Mavens are information specialists* -connect new businesses to new worlds of ideas and technologies - they seem compelled to collect information about products, prices, and places. - they seem compelled to share what they know with anyone who will listen -"mavens have the knowledge and the social skills to start word-of-mouth epidemics." *Salespeople are natural persuaders* -They have the power to persuade people to take action. (Some are pushy. Some are charming.) -But without them, new businesses are sunk. -With all the perceived disadvantages of a new business, consumers may never act, may never purchase, without the encouragement of a talented salesperson. -face-to-face selling as a leading determinant of success for new ventures.

User Friendly

-Usability is another key characteristic. -Beta-products suffer when people see them as complex to understand or just plain difficult to use. -The IBM PCjr of the mid-1980s provides an interesting example. -High price and limited software aside, the product was DOA because of its tiny "Chiclet" keyboard, which made typing almost impossible. -Evidently, when developing the PCjr, IBM hired usability testers with some mighty tiny fingers. -Beta-test customers become beta goldmines when they become reference points for future customers, provide funding for product R&D, are top prospects for upgraded products, and supply easy access to in-the-field reactions regarding value-in-use, product fit with current practices, and product usability. *Beta goldmines are vital for startups.* >> They may provide just enough money and information to keep an entrepreneur limping along on life support until the product and revenue model come into focus.

One of the key reasons for using social media is as follows:

-build awareness with potential customers -generate leads for new sales -strengthen relationships with current customers -improve customer retention -win back customers >> Social media allows us to achieve several marketing goals. All 5 are important for a new venture.

Mini Case: PUJ Bath Tub

-came from a personal need (mother) -makes bath time easy for mom and makes baby feel comfortable -warm to the touch -non-slip -hangs in storage: flat -doesn't absorb water -folds easily -fits into bathroom sink -comfortable to baby -makes it a bonding experience and there are no distractions *Who would be a Horse for this product?* -Ellen!! *Ride Horses-Evangelists & Patrons* -PUJ Tub and Rachael Ray & Kelly Ripa guessing game *New PUJ Projects* -booties (environmentally friendly, machine washable)

When adding employees to your startup, act big and think big by hiring:

-connectors that are people specialists -mavens that are information specialists -salespeople that are natural persuaders >> Hiring best friends and family members is usually poor business practice no matter how enthusiastic they are. Startups are much better off when surrounding themselves with connectors, mavens, and good salespeople

Use the Love Group to sharpen your competitive angle because the Love Group can:

-pinpoint the passion for your product or service -enhance the Need to Believe -enhance the Reason to Believe -enhance the Unique Product Claim >> When you tap into the mind and heart of your Love Group, they provide you the insights for sharpening all aspects of your competitive angle.

Beta Test

-refers to a stage in the software development and release life cycle. -Software products usually have an alpha stage, that is, a stage in which features are added; a beta stage, in which flaws are removed; and a market-ready stage, in which the product is fully groomed and broadly released to potential buyers. -The beta version is the first version of a product that gets released outside the business. -Beta versions help developers evaluate their products in real-world settings. -Beta versions are evaluated by beta testers. -Beta testers can be current or prospective customers. In the software industry, beta testers receive the beta version of a product for free or at a "bargain" price. -Beta testing suggests a process useful for nearly all emerging products and has important marketing as well as technical benefits.

Formal Pitch

1. *Reason* - Include a short "pump up" video that demonstrates why people are excited about the product. Follow up the video with a elevator-pitch style explanation of the problem, product, and Intellectual Property. 2. *Opportunity* -Describe the customers, competitors, how the product or service makes the competitors irrelevant, and how the product makes money. Investors want to see the potential for big revenues and big returns. Remember that if there are no competitors, then there usually are no customers, which in turn means that there is little or no money to be made. 3. *Status* -Present clear financials and make note of market traction. Highlight letters of intent, product orders, and better yet, product sales. 4. *Ask* -Make a case for your valuation of the startup and ask for an investment to accomplish the next set of important goals such as manufacturing products to fill orders, hiring staff to expand the sales or service organization, or expanding into new locations. Balance investment with reward. 5. *Remember* -Demonstrate how the product is validated with interested customers. Highlight the contributions of business team members to the startup. Close with a short "pump up" reminder with an industry opinion leader weighing in on the broad appeal of the product. Ex: Klymit pitchers memorized the pitch by rote, held slides in reserve to answer frequently asked questions, and never overstayed their welcome. And just as important, they continued to sharpen their competitive angle to pump up their WOW! Factor. Some investors questioned the experience level of their business team, but everyone watching the pitch were enthusiastic about the product.

Ten Determinants of Quality

1. *Reliability* -Perform promised service dependably and accurately. 2. *Responsiveness* -Willingness and readiness to provide service. 3. *Competence* -Possession of skills and/or knowledge to perform the service. 4. *Access* -Approachability and ease of contact. 5. *Courtesy* -Politeness, respect, consideration, and friendliness. 6. *Communication* -Listen and keep customer informed. 7. *Credibility* -Trust, believability, honesty, seeking customer's best interest. 8. *Security* -Freedom from danger, risk, or doubt. 9. *Knowledge* -Understand the customer's needs. 10. *Tangibles* -Appearance of facilities, equipment, personnel.

Finding Leverage....

1. *Ride Horses* -work smarter not harder...you must not "go at it alone" 2. *Seek out Benefactors* -who will be the answer to the million dollar question 3. *Prospect for Beta-Goldmines* -tap into financial lifelines to bring a product to maturity 4. *Land an Anchor* -win an anchor and sail to success 5. *Build an Advisory Board* -it may be you most important step towards success

Advisory boards have two key advantages over a board of directors:

1. Advisory boards often are not paid in equity or cash like formal boards. Thus advisory boards can be a low-cost and high-value alternative for startups. 2. Advisory board members can't be sued for their advice because they do not have any fiduciary responsibility to stockholders as do members of the board of directors. Thus, advisory boards are usually made up of nonpolitical, fun, and creative professionals who have a genuine interest and sincere desire to see the startup succeed. *informal* -serve only as long as needed *not liable* -not accountable if things go wrong *advise team* -give advice *not a career* -are not paid great sums of money

Advisory Board -- The Rules

1. Be clear on roles -what you expect from them 2. Encourage honest feedback, i.e., stay away from friends 3. Be professional to get professional behavior 4. Shouldn't cost them anything to participate 5. Listen and take advice or they will leave 6. Give them things to do

According to the research that has been done to help us understand the diffusion of innovations, three product characteristics stand out as must-haves for attracting beta customers.

1. Relative Advantage 2. Fit with Routine 3. User Friendly

Advisory Board-- Q&A

1. Whom do you want -Define the obstacles and key success factors for the business. -Bring in people that have already faced those sorts of issues. 2. What is the right level of experience? -Bring in people that are beyond, but just beyond, where you want to be. 3. How do I get them aboard? -Provide two-page prospectus of the business, the issues the board will address, how the board will operate, and compensation. 4. What is the compensation? -Travel, meals, perhaps some entertainment, opportunity to work with smart people on an interesting problem. -Modest compensation after and extended period of service comparable to their hourly rate in their full-time job. 5. How do I run meetings? -Meet two to four times a year. -Structure the conversations around two or three key decisions. -Devote an hour to each major topic. -*Spend most of your time on the future not past (10% past, 90% future).* -Don't read minutes. -Don't focus on looking back. -Keep moving forward.

For startup marketers, there are 2 important qualifiers:

1. do it yourself *only* if you can do it extremely well 2. do it yourself *only* if you have the bandwidth and energy to do it

Earn Success

Big Business often can buy success. Startups must earn success. -In this new era of Internet and social media, everyone can be a star; everyone can have a voice; everyone has market access. >> Startups can wear very big adult shoes even when they have very tiny baby feet. *Think big and act big, but don't spend money like you are big. DON'T try to buy success. Learn to earn success. DON'T bring in corporate marketers that haven't worked with small budgets. DO use new technology and tactics that level the playing field.* -Technologies such as social media and SMS communications, as well as low-barrier-of-entry market channels such as the Internet now give businesses of every size an opportunity to successfully compete locally and globally. -Knowing how to think big and act big without stumbling around can make or break a startup. Ex: The New York Times recently published an article about six new businesses that failed in the aftermath of the 2008 financial crisis. Four of the six businesses failed because the owners did not know how to think big and act big. One business, Wesabe, was a pioneer in the online personal finance market space, but allowed a competitor to come in with a stickier brand name, more-polished user interface, and slicker-looking website. -Three of the other six businesses mentioned in the New York Times article each failed the Think Big and Act Big challenge by spending money like they were big; trying to buy success rather than earn success.

Horses and Endorsers are NOT the same!!

But I Can't Afford a Horse! -they desire recognition -they want credibility among peers -stock to increase their social equity -being part of a winning team >> Entrepreneurs must *earn passion* and *make heroes* because they can't afford to do otherwise

Anchor Example

Consider the experience of Omniture, a business that helps other businesses understand and manage their Internet marketing channels. -Take a look at their customer list. There is Toyota, Cadillac, Ford, Microsoft, HP, Oracle, VISA, Ameritrade, ADP, Xerox, Siemens, Tyco, HBO, Fox, CBS, Walmart, Mary Kay, eBay, and it goes on. -Omniture always had great products and talented employees, but their success story really got started with two anchor customers, Microsoft and eBay. -According to their CEO, before landing these anchor customers, the Omniture sales cycle was a long and painful nine months. Prospective clients had lots of questions about Ominiture's financial stability, technology, and Service Quality. -With the anchors on board, however, most of the prospective clients' questions were answered with two words: Microsoft and eBay. The sales cycle shrank to a manageable three months. -Omniture won anchor customers by "promising the world and then delivering." -Many in the business questioned whether Omniture would make money with such a policy, but the CEO moved forward anyway. -Ultimately, eBay and Microsoft did produce profits, but more importantly produced high-margin, quick-turnaround sales opportunities.

Startups Must Connect

Court important customers and investors by identifying and creating touch points. -Every interaction, transaction, and engagement is an opportunity to build relationships and strong commitment. -The more touch points you make, the better. -How many ways can you interact with customers and potential investors? The possibilities today are numerous and can influence people before, during, and after a purchase. -Every touch point with a customer is an opportunity to improve the customer experience, ramp-up value for the customer, and increase customer commitment. Ex: Some of us still remember the AT&T advertising campaign, "Reach out and touch someone." The message is simple: reach out and connect with a loved one, a family member, or a friend through AT&T long-distance telephone calls. One way to think about customer touch points is to consider the customer's experience in buying and using a product: -The process starts with the customer (1) recognizing a problem, need, or opportunity. Then the customer (2) searches for information about products that can solve the problem, address the need, or capitalize on the opportunity. The customer (3) evaluates the alternative solutions and then (4) makes a purchase decision. Finally, the customer (5) uses the product with an expectation that the product will deliver value by solving the problem, addressing the need, or capitalizing on the opportunity. - Think about how you can connect with customers during each stage of product search, purchase, and usage Ex: As an example, car manufacturers learned years ago that more people went to their websites after purchasing one of their cars than before purchasing one of their cars. Smart manufacturers managed the touch point by highlighting testimonials from happy customers and spotlighting awards for initial purchase satisfaction and long-term quality.

Ride the Right Horse for Your Product

Ellen Show Example: his vs hers products -BIC pens "for her" (pink and purple); designed to fit a woman's hand -asked ellen to do a commercial for them and she refused bc she doesn't agree with what they are promoting

Non-Cash Benefactors

Entrepreneurs don't ignore benefactors that provide support other than funding. -Agilix is a software company that specializes in programs for Tablet PCs. -In this high-tech product category, Agilix needs capital to fund R&D, but also needs access to programming code and computer hardware technology. -To address the first need, Agilix approached Franklin Covey. Franklin Covey promotes personal planning and saw Agilix as a means to move forward in the electronic planner product space. -Agilix got their funding and Franklin Covey got a winning product. -Reviewers refer to Agilix-developed TabletPlanner software as marvelous, brilliant, and empowering. Competing with heavyweights like Microsoft, HP, and Corel, TabletPlanner is one of the top 10 best Tablet PC applications. -To address needs beyond R&D capital, Agilix has gone to Microsoft and key computer hardware manufactures. -They have become strategic partners that have provided Agilix with access to key technologies, allowing them to be on the cutting edge of this emerging field. -As a result of these benefactor alliances, Agilix was able to be one of two software companies to have their software applications ready for the launch of Windows-based operating systems for Tablet PCs. -The window of opportunity provided Agilix with market access and a tremendous amount of unpaid publicity.

Love Group Example

Levi Strauss deciding they should manufacture and market a line of three-piece suits called Levi Tailored Classics. -At the time, executives wanted to branch out into new areas of clothing over concerns that too high a percentage of their sales came from jeans. -They wanted to grow by penetrating new markets. Levi Strauss did their homework. They examined suit-buying preferences, shopping practices, lifestyles, and demographics for 2,000 men. -They uncovered five distinct segments in the market: the traditionalist, the classic independent, the utilitarian, the trendy casual, and the price shopper. -The marketing quickly focused in on the "classic independent" as the target, i.e., the tailored suit Love Group. -The segment accounted for 21% of male shoppers. They purchased about one-half of men's natural-fiber clothing products, were not price-sensitive, generally shopped for clothes in specialty stores, and strongly preferred tailored clothing rather than buying it off the rack. -The Levi Tailored Classics marketing team put together focus groups of the classic independents to prove the new product concept. -The focus group testing went well until it was suggested that (1) the suits would be sold off the rack, and (2) the suits would be manufactured by Levi Strauss. -At that point objections flew hot and heavy. -Behind the mirror in the focus group facility, the marketing team had answers for every objection. -The marketing team pushed forward, even though the product was completely inconsistent with everyone's existing belief about the brand and because of it, trounced every physical and emotional benefit these customers wanted from the Levi's brand. -The marketing team picked their Love Group, but predictably, Levi's love was unrequited and the product launch went down in flames.

Klymit Change

Nate Alder founder of Klymit, earned $1.6 million in venture capital by leveraging a sharp competitive angle and the interest it generated with community leaders and industry insiders -learned hot noble gases are used as insulators inside of dry suits to keep divers warm -envisioned how the "dry suit" technology could be adapted to insulate winter gear -*while insulated clothing is nothing new, using thermostat-valve-controlled linings in clothing to regulate temperature is new* -no bulk, no layering, just turn the dial up and down (if the skier is cold, add a little argon gas to the jacket lining; if a skier is hot, open the valve and release some argon to cool down) -from the outset, he understood how to network and recruit product advocates. -his biggest successes have been with a local mayor that wants to make his city the skiing Mecca of the US, who has introduced him to a number of leading outdoor companies and investors. (one company is not a primary development partner and several others helped fund the business) -he was also introduced to an industry "graybeard" (someone w/ decades of experience in the outdoor markets) who began assisting the company as a consultant -he featured this industry insider whenever pitching Klymit to investors -the team was also convinced early on that they couldn't bring insulation products to market on their own -they decided to identify large, well-funded "benefactor" companies that would benefit from adopting the new approach to insulation and license the technology -within a year, the company secured letters of intent from 3 top outdoor brands that expressed great interest in adopting

The Love Group Picks You

One would think that entrepreneurs would have more sense than the Levi Strauss marketing team. -But again and again we see the same behavior from entrepreneurs dead set on selling to a particular type of customer. >> They settle for fool's gold rather than prospecting for real gold. Ex: -To make the point, consider the case of an entrepreneur who had invented a device to measure the curvature and other features of human spinal columns. -His technology could give doctors the lowdown on backbones. -Medical doctors, however, are a skeptical group. They are highly educated, opinionated, and slow to revise best practices. -This didn't stop our entrepreneur. -MDs would love his invention, he just knew it. -He aggressively pursued them. He pushed hard. They pushed back. They preferred X-rays. -In the meantime, chiropractors discovered the new back-measuring device and loved it. It was just what they needed to get a quick read on a new patient's spinal column and to provide feedback on the progress being made by on-going patients. -The entrepreneur, however, didn't want to sell to chiropractors. He felt they weren't professionals and that their involvement would diminish the seriousness and significance of his invention. -He ignored the Love Group, unsuccessfully tried over and over again to sell his invention to the Hate Group, and ultimately squandered hundreds of thousands in venture capital. His business went bankrupt. *We need to be on the lookout for advocates, but we don't choose love, love chooses us.*

Topic 3.4: Seek out Benefactors (Part of Leveraging Leverage)

Startup Thoughts: 1. A benefactor is a company with complimentary products and/or services that win if your startup wins. 2. Entrepreneurs can find benefactors in the value-chain, in the local community, and in the same industry. 3. Benefactors can help out a startup with cash as well as non-cash benefits. 4. Firms want to jump on a promising "new venture bandwagon". Let others share in your success.

Topic 3.3: Land an Anchor (Part of Leveraging Leverage)

Startup Thoughts: 1. An Anchor is your "stamp of approval." It provides "I have arrived" credibility. (your core customers. your best friends) 2. Anchor customers pay the bills. Every business needs a steady flow of revenue even if it is low margin revenue. 3. Select right-sized anchor customers; big enough to keep your startup afloat, but not so big as to risk going under if anything goes wrong.

Topic 3.1: Ride Horses (Part of Leveraging Leverage)

Startup Thoughts: 1. Don't do it alone. Be smart, find some help, and "ride horses" to the bank. 2. Look for a love-group and empower the group to help promote and gain market access for your new product. 3. Make it easy for industry experts that believe in your product to play an important role in pitching your business and obtaining funding.

Topic 4.3: Choose Big Friends

Startup Thoughts: 1. Every startup needs to surround itself with connectors, mavens, and salespeople. 2. Many people don't have much confidence in startup businesses. Gain respect by associating yourself with big ideas and big causes. 3. Successful new ventures must be people magnets. They must attract talented advocates and brand champions to create momentum in the market.

Topic 3.5: Build an Advisory Board (Part of Leveraging Leverage)

Startup Thoughts: 1. For a startup, advisory boards are more important than a board of directors. 2. Don't limit advisory boards to just include businesspeople. 3. Invite advisory board members that love your product, have a stake in staying on the leading edge of your industry, and/or people with regional, national or industry-wide name recognition. 4. Experience counts with startups; it just doesn't have to be your own.

Topic 4.2: Social Media

Startup Thoughts: 1. Social Media empowers small players to think and act big. SIze and money are no longer barriers to starting a successful business. 2. Facebook, Twitter, Youtube, Product Blogs, and Google each have their own rules for success. Informed use of all five is needed to beat Big Business at the Social Media game. 3. With Social Media, there seems to be no stopping an entrepreneur with a pleasing personality. In all online communications strive for "likable confidence."

Topic 4.4: Get Your Swagger On

Startup Thoughts: 1. Startups don't need to play by the same rules as Big Business. They can be direct, brash, and gain traction by attacking bigger competitors. 2. Startups need the market's attention, but can't afford to buy it. They must substitute swagger for dollars. 3. Attack large entrenched competitors; startups shouldn't hesitate to put their swagger on. The world favors small firms who fight against all odds. Use this to your advantage.

Topic 4.5: Reach Out with Touch Points

Startup Thoughts: 1. Startups lack credibility, but they can gain it by connecting with clients in ways that Big Business can't afford. 2. Each stage of the customer experience gives a startup an opportunity to send out a message of quality. 3. Study the customer journey, i.e., the steps your prospective customer goes through when doing business with your startup. Each step in the customer journey is an opportunity for a positive touch point.

Topic 4.6: Be a Trade Show Giant

Startup Thoughts: 1. Trade shows and entrepreneurs were made for each other. There is a trade show for virtually any product or service an entrepreneur may want to promote. 2. Trade shows level the playing field between startups and Big Business. 3. Put your best foot forward at trade shows. Use humor, be memorable, but stay on message.

Topic 4.1: Pitching the Idea

Startup Thoughts: 1. Use the elevator pitch to advance the sale and not to make a final sale. 2. An elevator pitch must hit hard and be brief. If at all possible, grab attention with a memorable product demonstration. 3. Formal presentations should be just as engaging as an elevator pitch. Memorize the pitch. Strip it down to essentials. Know the numbers. Show the potential for big revenue and big returns.

Using Social Media

Startups use social media resources for product branding and marketing communications. -Social media marketing may be effective than traditional marketing communications channels because it (1) offers greater flexibility for content and duration, (2) has credibility similar to word-of-mouth communications, and (3) can build awareness and interest at a much lower cost than traditional media channels. -Startups can use social media to achieve several marketing goals. >> Examples gleaned from a recent survey of business are (1) build awareness with potential customers, (2) generate leads for new sales, (3) strengthen relationships with current customers, (4) improve Customer Retention, and (5) win back lapsed customers. -Companies can track the success of social media efforts. -Startups can track increases in Facebook fans or Twitter followers, traffic driven to product websites and/or splash pages, positive mentions on Twitter, number of sales leads generated, as well as the number of visitors and page views. -Every new business will want to be active on Facebook, Twitter, Youtube, and have a product blog. -Startup businesses also will want to have a personal Facebook page to associate a face with the new product. Facebook, Twitter, Youtube, and product blogs all play a different role in achieving marketing goals. They also have different rules for effective use. -Google search engine and AdWords are also important Ex: Launching the treadmill song on Youtube using they're handheld camcorder for total of $300.00 Ex: Squatty Potty youtube commercial Ex: Save the Bros healthy protein shakes (humorous) ^^Squatty Potty and Save the Bros are examples of not only being different but their ads were educational and highlighted their angle

Cutting Through with a Small Budget

There are trade shows to cover nearly every new product or service an entrepreneur may have in mind. -Seek them out and display at the best ones. -Trade shows create opportunities to sharpen the competitive angle, learn from the competition, find early adopters, and make sales. Ex: -Omniture cofounder, Josh James, quickly learned that even startups can afford to be big players by concentrating their marketing dollars at trade shows. -The company bought the biggest displays and flooded trade show floors with attention-grabbing remote-control cars. -But when Josh saw that one of his competitors won a deal from a large airline and that Omniture did not even get invited to submit a bid, he pulled his biggest stunt of all. He bought a $15,000 spot at a trade show luncheon and had one of his salesmen say, "Everyone stand up, because we are going to play rock, paper, scissors. And the winner gets a Hummer. But instead of saying rock, paper, scissors, we're going to say Om-ni-ture." -The competitors at the luncheon weren't asked to play. Om-ni-ture was yelled louder and louder as the competition progressed. A one-year lease for a Hummer was awarded. And since that day, Omniture has been invited to bid on every large project that comes along.

Selling with Touch Points

When you have a small business it is easy to be overlooked, but if you can't be big in size, you can be big in action Ex: -One of the most effective salespeople we've observed in a startup business was a true master at finding and leveraging touch points. -This salesperson reserved a couple of hours each day for calling potential clients, bringing them up-to-date on things happening in his company, getting up-to-date on things happening in their company, asking for new business, or at least asking for the opportunity to respond to a RFP or make a presentation. -This master of the touch point also clipped articles from newspapers and magazines that would be of interest to potential clients and mailed them off with a little note, sent relevant website links via email, gave away personalized calendars each year, and gifted small but unique Christmas mementos. >> Did the tactic work? -He doubled the sales revenue of the next best salesperson. *What startups don't have in national reputation they can make up for by giving world-class personal attention.* -People buy from people they know. People buy from people they like. But most importantly, people buy from people they trust. -Reaching out with touch points and then making each touch point personal and memorable builds trust. Smallness can empower startups to gain trust by doing things with real gusto that larger, more established companies wouldn't even consider.

Role of Early-Adopters

early-adopting customers also can be powerful advocates -don't use time and energy to fight cynics and hecklers. *learn to focus on the love and take your product to the market through the eyes of those that love it* -"Who is in your Love Group?" >> *most startup marketers, similar to most Big Business marketers, can't identify who faithfully purchases their products beyond offering up a few Demographics like average age, gender split, and regional sales percentages* (startups can't afford to be that unobservant) -*The Love Group is their lifeblood. Just like a political candidate, startups must know and retain their Love Group while at the same time helping the fence-sitters see their product through the eyes of the Love Group* -New companies don't need 50% of the popular vote to succeed, but do need a strong group of core customers that they thoroughly understand. By thoroughly understand, we are talking about drawing together a profile that looks more like an ethnographic Mona Lisa than a demographic stick figure. What do customers look like, how do they express themselves, what do they read and watch, where do they live, what vehicles do they drive, what are their hopes and aspirations, and most important, which of our product features and benefits really get them going? -Special interest groups were successfully encouraging legislation to reduce, phase out, and even ban the use of plastic packaging and products. The American Plastics Council (APC) came to the rescue with a flashy advertising campaign to inform the public about the substantial efforts the industry was making toward recycling and reuse, and that products and packaging made of plastic actually saved resources compared to other alternatives such as paper or metal. Millions of advertising dollars were spent, expectations were high, but success was nowhere to be found. >> Directly attacking the concerns of the Hate Group didn't convince anyone and ultimately led to the APC being ordered by a dozen or so state Attorneys General to desist in their "false" advertising claims about the availability of plastics recycling. -The APC failed because managers ignored the Love Group in favor of attacking the Hate Group, but they learned their lesson. The next round of advertising built on the beliefs of plastics advocates. These messages highlighted the noble qualities of plastics - personal safety and health - that researchers had identified in personal interviews with the plastics Love Group. This time the positive results were staggering. -*Entrepreneurs need to discover what politicians, and successful advertisers have known for generations, the Love Group holds the keys to victory.*

Dentrix Dental Systems Example (Leveraging Leverage)

founder of DDS spent 2 years sitting in dental offices trying to find pain that wasn't in the dental chair. -he discovered, for dentists anyway, the pain was closing the gap between filling and billing (dentist performs procedures in the chair and then send the patient's file to the front desk for billing; problem occurs when the info about the procedure is lost or confused along the way to the front desk (bad handwriting, smudges, sometimes files magically disappear; all of this adds up to lost revenue) -DDS developed the first management software to connect the operators to the front desk, minimizing billing loss and confusion. (*but even after successfully developing the software and addressing a sizable pain-point, the venture would fail unless it found a way to persuasively and efficiently reach the target market--dentists*) -DDS at first thought they had only 2 choices: 1. hire a company sales force or 2. outsource the selling to independent sales agents such as dental product distributors or value-added resellers. *but Dentrix had a third option when they started looking for leverage* *Kimball's hard work in uncovering and solving everyday pain for dentists gave Dentrix a sharp competitive angle* -it wasn't difficult to find experienced and credible dental-industry salespeople that believed in Dentrix and wanted to take a chance on selling it for a commission and stake in the company rather than for a fixed salary *Dentrix leveraged their leverage and found salespeople to help them do what they couldn't do or afford to do on their own* (the experienced and credible salespeople earned millions. the business became, and still is, a huge success)

6 Best Practices at a Trade Show

six best practices that startup marketers should keep in mind when displaying new products and/or services at a trade show. 1. *Use the trade show to close sales* -Every marketing dollar a startup spends needs to generate two dollars in revenue. -Entrepreneurs should plan on how they will convert contacts to sales. -It is estimated that about 8 out of 10 trade show attendees come to buy. Those numbers are in your favor. Take advantage of it. 2. *Be funny, but don't cross the line to being offensive* -Spending money and putting your best foot forward at a trade show is a big deal. -Try out your ideas on an impartial audience before committing to a plan. 3. *Economical is okay, but don't portray a cheap image* -The trade show may be the first and last impression a potential customers gets of your new business. -People understand frugal, but may run away from shoddy and cheap. 4. *Don't be so clever that everyone misses your message* -normal people won't spend the time to unravel the abstruse. -Be direct, state the obvious, highlight a uniquely good solution to a compelling pain-point or the too-easy-to-pass-up opportunity to jump on a particularly high-value bandwagon. 5. *Swing for the fences, but don't make yourself look stupid* -From that point forward he tried to market with boldness, but think through the consequences to make sure he wouldn't end up with egg on his face. 6. *Be authentic, be yourself* -No sense in meeting with potential customers and coming off as being robotic or synthetic. -Be likable confident, not arrogant or elitist confident. Have fun in life. Smile when people ask tough questions After all, you are addressing real pain-points with real solutions.