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Bootstrap Marketing: The Growing Venture
Transcript of Bootstrap Marketing: The Growing Venture
The Growing Venture Marketing Plan Dancing with the Customer Target Marketing and Advertising Selling and the Internet Marketing Plan Marketing Plan = Blueprint How can we engage? Entrepreneurial Ventures & Global Markets are Shaping Economy "It therefore appears quite likely that there will be dwindling opportunities to sustain competitive advantage by attempts to simply interpret and respond to existing customer wants." -Rethinking Marketing (2009) Reactive vs. Proactive True Customer Interaction Four P's to Four C's of Marketing
Communication with Communities of Workers
Choice and Convenience Growth is Hard! Why?
- Entrepreneur not aware of Cash Flow importance
- Escalating accounts receivable
- Growing Inventories
- Necessity of new employees "The Present Value of a Business is the Sum of the Future Cash Flows." - John Gonas Business Planning is CONTINUOUS Marketing Plan No more of that traditional stuff, please! Bootstrap Marketing Techniques:
1. Wind-shield Market Research- Experiencing the market first-hand
2. Everyone is a Market Researcher in the Company- Everyone has access to critical information that can shape the DYNAMIC process of business and market planning
3. "VIDEO" not "PICTURE" - Planning should create more of an EVER-CHANGING "video" rather than a STATIC "picture" BOOTSTRAP ALL THE TIME! Dancing with the Customer
Product Positioning "The product sold by a business is more than simply the physical characteristics of the product. It also includes how the product is PERCEIVED by the customer in terms of a variety of features and intrinsic characteristics." What should you focus on? Product Variables
- Design Service Variables
- Interactions with customers
- How customers are treated Personnel Variables
- Skill level
- Engaging the Customer What does it look like? Product Variables
- Full line of products
- Depth in product lines
- Wide choices Service Variables
- Customer support
- Customer interaction with staff Personnel Variables
- Knowledge and expertise
- Open communication with customers Bootstrapping Techniques to Communicate with Communities of Customers Just as important for Growing Businesses Promotion the way a business communicates to the customer all other types of marketing.
The Product and its attributes
Distribution, how they can get the product Principles of Bootstrap Marketing
Goal is to efficiently use scarce marketing dollars to reach the desire community.
B2C Business to Customer Marketing
B2B Business to Business Marketing
- Business Size
- Industry Segment
Snappy Auction Growing Venture Marketing Techniques
Target Marketing - use of promotional tools that go directly to known customers or those who have a high likelihood of becoming customers.
- Focuses on the specific benefits the customer will receive
- Sends messages directly to customers home or work
- Papa Johns sends emails and coupons after you order online and adds you to their mailing list after you give them your address. Common Items Sent To Existing Customers
Holiday Greeting Cards
Customer Gifts (calendars, magnets, ect)
Thank You Notes
Special Promotions only for Existing Customers
Sources of Information for the Direct Email Database
Special Offers Advertising
Bootstrapping can play a role in traditional advertising.
Example: Evans Glass made a $100,000 investment in advertising to add local television ads, resulting in a $1.5 million increase in sales.
Ways to include traditional advertising while still keeping costs down include:
- Entrepreneur plays a large role in development and production
- Working with new advertising agencies
- College interns
“It is a visible product. It is hard to describe a mirror or glass, so we decided not to do radio.”
- Bill Evans
Depending on number of program viewers, the average cost of a national television ad can cost hundreds of thousands or even a million dollars for a single 30 second ad. Local television ads are less expensive, and reach a more targeted audience.
Channel Selection - food network, cartoon network, animal planet.
Remnant Ads - good test, but less control for the entrepreneur
Newspapers, Magazines, and Ezines
- Color Ads can cost up to $25,000
- Ad Placement - food vs. sports section
- Coupons - get customers interested
- Target Market - age, Internet
- Ezine - periodical exclusively delivered via the Internet
- Radio advertisements can be highly targeted
- Significant diminishing return to ads on more than one station
- Radio listenership has plateaued, making stations lower their prices
- Remnant ads can be a good way to test the effectiveness of radio ads Selling and the Internet Every entrepreneur must learn to sell to
While the entrepreneur may become less active in this selling as the company grows, the importance of selling only becomes more important, to support the growing venture to get new customers and retain existing ones.
Bootstrapping A Sales Force
Due to the entrepreneur needing to spend less time on selling to focus on growing and running the company, a full time sales staff will be needed.
There are ways to bootstrap hiring on a potentially costly sales force.
Putting sales staff on commission
Hire independent sales personnel (Sales Reps or Manufacturer’s Rep)
Turn customers into its sales force
I.e.- customers will wear merchandise with the company’s logos to show their allegiance to the brand.
Keeps costs down until sales personnel become productive
Common form of payment
You can time the cash flow of payment for the sales force to the revenue needed to cover it
Small base pay may be needed depending on competitive practices in the industry Independent Sales Personnel
Known as Sales Reps or Manufacturer’s Reps
Independent contractor who sells for different companies at one time
Often represent small/medium-sized businesses that can’t afford their own sales force
May or may not sell competing products, but offer a wide array of products produced by a variety of companies Benefits of Sales Reps
Sales Reps aren’t paid unless they actually sell the product.
A business can enter many different markets at once.
Reps usually already have god connections and contacts in markets and a list of potential customers from the start.
Can actually package different products the reps sell together to make them more appealing.
Can easily enter foreign markets with local sales reps who know the market.
Selling at Trade Shows and Conferences
At trade shows and conferences, you can engage in personal selling to a captive audience. The key is getting noticed, and have people remember your company when they get home. To do so, you must pay close attention to planning the following:
- Eye-catching- lighting, colors, pictures, graphics
- Clearly and quickly communicate the essence and benefits of the product
- Contests, free giveaways, food and drinks
- Working prototype or video loop
- Sexy models, animals, or entertainers to grab attention Staffing the Event
Sales pitch should be well-rehearsed, delivered with enthusiasm, sincerity, and passion
Each prospect spends a very short amount of time at your display
People pitching must:
- Communicate key elements
- Answer questions
- Address objections
- Sort “lookers” from true prospects
- Assure future contact with all prospects Follow Up
Trade show contacts will not follow up on their own
Business card or brochure is not enough- they will receive many that day
Gather contact info on each prospect- have fishbowl contests
Have catalogue sign-ups or samples
Quick follow up- via email, phone call, or hand-written note Distribution Using the Internet
Using wholesalers then retailers adds cost to the product
Internet creates a “virtual niche”
Allows widening of the channel of distribution
Retailers are no longer bound by their location thanks to e-commerce
Building/maintaining a website is a low cost compared to the benefits.