David Cummings on Startups

Category: Sales and Marketing

  • Ecommerce Mystery Coupons

    Last month there was a good bit of dialogue around the lack of innovation in the ecommerce world. Over half of the top 15 internet sites didn’t exist 10 years ago, yet only one of the top 15 ecommerce sites didn’t exist 10 years ago. There are lots of theories why but I’m not going into those now. I want to talk about something related.

    My wife was doing some online shopping, and is passionate about saving money and finding the best deals — she truly gets excited about it. One of the retailers she shops at was running a promotional campaign I hadn’t seen before: put in your email address to have a mystery coupon, worth up to 50% off, sent to you. This is brilliant. As I mentioned before, email is a currency that’s worth more than people realize. People love getting deals and playing games — a mystery coupon combines the two. I believe we’ll see more of these types of campaigns in the future.

    What are some analogous ideas in the B2B world? Do you think these types of campaigns will become more commonplace?

  • Marketing in a Web World

    I spent time today talking with the marketing team of a successful financial-related technology company in town. It was a good opportunity to dig into their online marketing strategy — something they are in the progress of moving from primarily off-line to almost all online. Here are the categories they broke things into:

    • Buying leads (e.g. BuyerZone, VendorSeek, etc)
    • SEO/natural search
    • Paid search
    • Email
    • Webinars
    • Display ads
    • Original content sites
    • Affiliates

    I think online marketers often get focused on the most obvious categories — like paid search, SEO, and email — and don’t allocate enough dollars to experiment with other areas like buying leads or sponsoring webinars. My recommendation is to carve out a piece of the annual budget, say 5- 10%, and allocate it to experimenting with different options.

  • Online Lead Generation

    Today I had lunch with an entrepreneur that is an expert at online lead generation. Like him, I also believe that online lead generation is an untapped opportunity for most companies. The great thing about generating leads online is that there are several ways to do it, many of which have a strong ROI. Let’s look at a few:

    • Offer something free like a white paper, product trial, or a product demo on your site and require a person’s email address for access
    • Sponsor a community through banner ads, promotions, or information in email blasts and drive the clicks to landing pages with conversion forms
    • Purchase leads from third-party lead generation sites (most industries have these sites)
    • Buy pay-per-click ads on search engines that have relevant keywords and drive the clicks to landing pages with conversion forms

    Of course, a marketing automation system is highly recommend to maximize the value of your investment. My advice to entrepreneurs and people responsible for customer acquisition: use the power of the web and try several different tactics to generate leads online.

  • The Five Fs of Web Content

    For entrepreneurs looking to grow their business (who isn’t!), I think one of most under-appreciated marketing and lead generation tactic is to generate inbound leads through traffic from search engines. Of course, one of the biggest drivers for ranking well in search engines, along with links to your site from other sites, is to have high quality content. Web content is powerful.

    Let’s look at the five Fs for web content:

    • Frequent – New content should be published on a regular basis at least once a week if not several times per week. Getting into a good publishing rhythm, and sticking with it, is critical to building momentum as it takes a significant amount of time for the web traffic to build.
    • Fun – Web content, especially blog content, is better served in a fun and personal manner. Too often we read corporate speak with a variety of gobblegook words — don’t do it.
    • Facts – People like facts, figures, and statistic to make the content more interesting. Yes, I’m not good at this on my own blog, but do as I say and not as I do. Use hard data to make your point and provide compelling information.
    • Food for Thought – Make the content interesting and memorable. Take an unusual stand or position that is likely to make someone think twice about it. Good food for thought will give people a reason to subscribe or comeback to the site.
    • Fans and Followers – Look for ways to stay in touch with your fans and followers through RSS, Facebook, Twitter, and any other networks they use on a regular basis. Go to their networks, as opposed to limiting access to your own site.

    Don’t just sit there — start writing content. But, remember, pace yourself and do it on a regular basis. You won’t regret it.

  • LinkedIn Who’s Viewed My Profile

    In talking with a friend of mine two days ago about how he markets his five person consulting firm, he told me one of the best things he’s found to track how well he’s doing is to check the LinkedIn Who’s Viewed My Profile feature on a weekly basis.

    The idea is that he’s always reaching out to executives and decision makers within his niche to build his pipeline. One of the major challenges is to determine who’s interested at the early stages of the deal cycle, and he doesn’t have enough content on his website to justify a marketing automation product to track prospects. With LinkedIn, he doesn’t know the individual person at the company that has looked at his profile, but he can see if one or more people at a specific company pulled up his profile. If they have, he then focuses more effort on following up with his contacts at that specific firm.

    Use technology and social media to become a more effective marketer.

  • Email as Currency

    I was talking with an entrepreneur earlier today and the conversation centered around strategies for monetizing highly specialized content. Her company provides niche business services and supporting collateral (books, white papers, worksheets, etc) to a valuable audience. The question was as follows: should I sell my content or give it away for free?

    In the end, my advice was to go the free route for the following reasons:

    • The conversion rate for unique visitors to buyers of digital content (e.g. a PDF for $20) is likely 1 in a 1,000, so it’ll take a ton of visitors to make much money
    • Most people don’t like to buy content online, and pulling out a credit card to purchase a PDF results in tons of friction
    • If instead of 1 in a 1,000 that spend $20, you give the content away for free in exchange for providing a valid email address that opts into an occasional newsletter (no more than 2x a month), the number of emails you earn is 20 in a 1,000
    • With opted in email addresses, and thus a targeted audience, new articles and content can be sent out with sponsored, context-relevant advertising, that will command a high quality rate (e.g. $5 – $10 per email of annually), resulting in significantly more revenue than the digital content route
    • The biggest value of focusing on email as currency is that not only is the revenue higher, but that it is recurring revenue, which is one of the best business models

    Selling digital content appears to be an easy way to make money online, but I believe that building a loyal, opted-in audience around the content is a superior strategy for value creation.

  • Milestones for New Sales Reps

    Hiring an effective sales team is one of the most difficult challenges for a technology entrepreneur. It isn’t that there aren’t good sales people out there, it is just that sales is usually foreign to technologists, and like non-technical people trying to hire technical people, it is hard to determine who will be successful. Sales people can be even more challenging to figure out because by their very nature they are good at selling, especially themselves.

    One of the best things to do as part of hiring a new sales person is to establish success milestones. These are milestones for the sales rep to achieve during their first six months to a year, assuming you have a consultative sales process with a decent learning curve. Here are some categories to measure:

    • Call conversations logged
    • Demos scheduled and completed
    • Opportunities created
    • Opportunities closed won (sales made!)

    Of course, these are standard metrics to track for sales people. What I’m emphasizing here is to have specific numbers of each that are required to be met for every 30 day period to stay on the bus until quota is achieved. What gets measured gets done.

  • Billboards for Web Hosting Companies

    Driving around Atlanta recently I’ve see several large billboards for web hosting companies — yes, web hosting companies. Do they know something I don’t know? Since when did old fashioned billboards on the side of the road generate a better return on investment (ROI) when compared to online advertising? Here’s my theory: web hosting is so competitive, and has such low barriers to entry and obvious need, that the traditional online lead generation routes don’t have an appreciable ROI. Web hosting companies that continue to do the online advertising do so to get greater economies of scale so that these new customers eventually will be profitable. And, that’s why they are trying out billboards.

    Oh, and here are the companies that are advertising:

  • Money Now or Later

    One of the challenges in a startup is deciding when to trade off short term revenues (money!) to focus on the long term plan. This might sound like a strange concept — why would I want to say no to money? Let’s look at a few examples where this can happen:

    • A key beta customer really wants to pay for consulting work, but you know, based on previous experience, that this will take too much energy away from the product
    • Traffic is growing nicely on your site, and the urge is to put up advertising, but you know it’ll detract from the user experience
    • Users are using your service for free, and several have offered to pay, but time is better spent improving the product and not implementing a payment system

    Of course, this can be a good problem to have. My recommendation is to think hard and be wary of making short term decisions that can hinder growth or don’t have economies of scale.

  • Atlanta’s Online Marketing Software Cluster

    One of the themes we’ve heard over the past few years in the Atlanta technology community is that we should focus on our existing clusters like Internet security and logistics as we have a wealth of existing expertise and investors ready to go. Well, I’d like to start creating more dialogue around our online marketing software cluster. Didn’t know we already had a cluster? Take a look at these existing Atlanta companies that do over $100 million in combined annual revenue:

    The next time someone mentions clusters in Atlanta, I’d bring up the largest cluster that no one talks about: online marketing software. In fact, I’d bet it is one of our faster growing clusters as well.