Wednesday, November 25, 2009

Giving Away Free Product Does Not Make for a Successful Marketing Campaign

I had the occasion to read about a pretty neat marketing campaign executed by IKEA for the launch of a new European location store opening. It was run through facebook.

The way the campaign was handled and the idea behind it was really unique, it leveraged facebook beautifully, and it was viewed as successful by many in the social media/marketing communities.

A few things grabbed my attention about this campaign that I thought were good tidbits for conversation:
1. One social media pro exclaimed this campaign was proving the death of the micro site
2. IKEA successfully got people on facebook to post IKEA products on their own pages, and in return had a chance to get free furniture
3. IKEA gave away quite a bit of free furniture - or at least that is the message that was communicated through the case study I saw
4. Nowhere did I see how much furniture was actually sold at the grand opening - or even how many people showed up at the grand opening of this new store (the whole point of the campaign as I understood it)

We can take this point by point.....
1. Taking the buzz word "micro site" off the table and looking at the purpose of that tactic - usually to promote a specific product launch, service launch, promotion, limited time offer, etc. A person's profile page on facebook, with all of the API function and rich media capabilities, now basically fills or can fill that same role. The "micro site" based on its function and not its name, is still a micro site it just now lives within the facebook framework. So I guess, the micro site is not dead, it just has a new place to live outside of a unique url address. Facebook, in essence, becomes the "micro site's" browser. Sorry my overzealous friend the "micro site" or as I might call it - the highly focused web promotion - is not dead.

2. IKEA did a great job, and saw a lot of free impressions and some interactivity with their brand in having general consumers spreading their word for them. This is definitely a win for positive brand experience. No need for a long dissertation here.

3. What was IKEA's objective for this initiative? Was it to give away a lot of free furniture? It was made clear that this store did not have a big budget for this store launch, so how much budget did they have to give away free product? If they gave away a lot, did they really save any $$ on their budget? If they did not give away a lot of furniture, did that upset potential customers? None of this explored or explained in the case study I read. The piece made it sound like they gave away a lot of furniture, and if that is true, I must ask, isn't selling furniture the point of all of this?

4. The best scenario I can come up with is why not run this promotion for their e-commerce platform to boost online sales? The fact that the case study did not say how much furniture was sold, or how many people showed up at the store tells me that it probably was not that impressive. If I am wrong, and they saw a big return, then if I was them I would trumpet that from the rooftops.

In closing, I think getting a ton of people to share your product online is great exposure, but many executives are wanting sales, above and beyond impressions and viral passing along of their message. If you are someone selling social media marketing strategy and execution, you ought to know one of the biggest stumbling blocks to a significant budget allocation for you is the lack of tangible ROI cases for social tactics and efforts. Whether you like it or not, that is the tell tale proof for many executives to pull the trigger on a significant budget allocation.

If I am IKEA, I love the case study, but if I do not see a store traffic bump, sales bump or both over time, It was a waste of time, product and money.

Tuesday, November 24, 2009

The Muppets - Bohemian Rhapsody

I have always been a Jim Henson fan. As a result, I have always enjoyed The Muppets. I have even written about them in the past. I have seen this passed around quite a bit recently, so I thought I would share it with you. Henson's beloved Muppets doing their version of Queen's Bohemian Rhapsody.

Saturday, November 7, 2009

Starting a Business? Stick to Your Guns.

If you are thinking about starting a business, especially a business that is either directly involving digital media, technology, application development (marketing, operations, ecommerce, etc.) or even just related to these industries I am dedicating this blog post to you. I want to share some experiences I have had in hopes that you will take them and steer clear of some potential snags. Hopefully you can learn from my experience and take advantage of the opportunities that exist in our beautiful free market while avoiding some potential pitfalls.

This could be a very long blog post. I have enough mistakes over my career to fill several posts. In the name of keeping this somewhat manageable, I will only focus on a few key and, in my opinion, critical things to be aware of.

If you have started a company or are planning on launching your own company and you have what you believe is something of value (service or product or combo of both) I recommend you do a few things:

1. Research the hell out of your offering and the industry/market you will be in, the current state of your industry, current offerings, and the companies/people who are offering anything closely related to what you want to sell. You need to understand the competitive landscape. I have launched four companies, none of them launched with a single client. Three out of the four have seen success in a relatively short period of time. The three that are successful - a ton of research and market analysis prior to launch. This analysis included an honest assessment of potential clients, how many exist, how many realistically would engage with my new venture, and how developed the market was/is for these offerings. After all, if the market is not ready for you, or if it is past you, you will not have much success. Timing is critical. If you have competitors, are they good? Are they mediocre? What will make you unique? Will you blend in with everyone else? It is always tougher to ski on a crowded lake. What about the company that did not find success you ask? We rushed in with what we thought was a phenomenal idea. We were first to market with our idea, the technology was ground breaking in an industry that was and still is growing by leaps and bounds. Sounds perfect right? Wrong. We did not have a good enough understanding of all of the hoops we would have to jump through to get the necessary clients, we did not have a good enough foothold in the industry we were entering because we had not done our homework. We rushed in and the result was a quick start with eventual tapering results. If your technology is that good/unique, you most likely will have enough time to handle the pre-launch due diligence.

2. Avoid those trying to get your something for nothing. If someone you meet makes you an offer that seems to early, to good to be true, or too eager to make you a deal consult your business attorney. If this saint in a suit is truly looking to help you launch, secure the big deal or simply leverage what you have for their interests, that is great, just don't go too far down a road without consulting others that have more experience in these matters, specifically your attorney. After all if this person or group is a legit opportunity and they really have a good business relationship in the cue, they will have no problem getting it set up right from the get go. If the approaching party is shy about involving attorneys or even documenting the relationship details, run the other way. You will only be avoiding future headaches and potentially losing your intellectual property with no recourse. Even if the deal does not work out, and your suitor is not legit, that is a good sign you may be on to something.

3. If you are dealing an application play never let others see your source code unless you have a document that protects your ownership rights to that code, or a document that outlines the sale of that code. Seems obvious, but you may be surprised at how many coders and app. developers get ripped off.

4. Review #2 - when people throw money around multiple conversations, it is easy to believe it especially when your new company is hungry for revenue. Do not drink the kool-aid.

5. Stick to your guns. This may be the most important point. If you have done your due diligence, you have a truly unique offering, a better way to do things, a superior product, a unique position in the market, the next big app., whatever you believe is going to be a success and make you a successful entrepreneur, if you take the leap - do not give up. Do not listen to naysayers (they are probably scared of your offering, esp. if they are perceived competitors). Ignore the nonsense and focus squarely on your plan, your offering, your clients, your business development efforts, your operations. Give it every ounce of energy you have. Work it until you feel like you are going to die. If you stop short of any of this and quit believing you are the only one to give the market your "thing" you will fail. Stick to your guns. Stick to them despite a bad month of sales. Stick to them despite a server meltdown. Stick to them despite your friends not understanding what the hell it is you do for a living. Stick to them despite not being able to talk shop with your family at Thanksgiving. Don't look back, keep moving forward.

One quick story about sticking to your guns. We launched The Basement when I had less than a month's income to my name, two children, a wife who had been dealing with a wacky self-employed husband for years, our family house was up for sale do to the whole lack of income thing, and we did not have one client or one dime in our company bank account. We stuck to our guns - all I can say is my family is still in our home, it is not up for sale, we are running a successful business with a great client list (most of which are return clients many times over), new clients jumping on board monthly, we have a ton of positive new opportunities on the cusp and an awesome staff. Sure this year has not been all roses with a nasty economy, but that being said, we are hanging tough and there are blue skies ahead.

We stuck to our guns.

Tuesday, November 3, 2009

3 to 5 Year Business Planning

As time goes by I sometimes think about the businesses I have been a part of, and of course my favorite memories are of the businesses I have helped create from scratch. If I was ever asked what the most important component was to each of these businesses I would have to say the initial 3 to 5 year business plans that each business required. Yes, I said required.

Most recently it is The Basement Design + Motion. This was the most pain staking, time consuming and rewarding plan to date. Before I get into the details of this planning, let me tell you I am a big believer of taking a proven winner, learning from it and executing built upon the winner's success. Assuming some small business owners, or future small business owners are reading this, here are a few steps I took to insure the plan was one that would help guide our business down the right path.

1. If you have never written a business plan before and you think you can run a successful business without it, think again. My words of advice; take plenty of time to write a complete business plan, review the plan, revise the plan, share the plan with a trusted advisor, and revise the plan based on feedback.

2. Dig up a proven successful business plan and adapt to your business. In my own experience I have often looked to the Harvard Business School's business plan contest that they put on for their business students. I was able to secure a copy of one of the winning plans and I looked at that as a great model to base The Basement's business plan off of. It was thorough, complete, to the point, had been reviewed and considered great by business luminaries who judged the contest and had plenty of great information that assisted me in making sure I was not leaving out any important variables or background information.

3. Do not get impatient and skip this critical part of starting and running your business. The streets are littered with failed businesses who did not work through a complete plan. Lazy planning will kill your business.

4. Find a successful business person that you trust and approach them about reviewing your plan to insure your projections, expenses, validation, mission, pipeline and more are realistic and based on an accurate foundation of industry intelligence. They may not be an expert in your industry, but the questions they ask will cause you to think through your plan, validate your projections and scrub your own reasoning.

5. When writing your plan compose it as if you will be presenting it to investors or potential suitors for your business. Even though this may not be a goal of yours - investors want to see the return potential, aka margin, time table to break even, time table to profit, top line revenue projections, scalability and future earnings potential of your business. Even if you do not think this is something you want to seek out in the future, those elements make for a healthy business, and planning for them now will only serve you well. After all, if your business cannot show profit, better to understand that BEFORE you sink yourself and your savings into it than after. Understanding how these important numbers scale out over time will help you plan more accurately for the future and become profitable quicker.

6. When writing your plan map out all potential start-up, one time and recurring expenses, not only for the first year, but for the following 3 to 5 years. Account for growth projections, taxes, services (lawyers, accountants, etc.) future employees, and the list goes on and on and on. When you think you have them all, add some more. Watch your margin shrink like George Costanza in a cold swimming pool. That is a good exercise because it will force you to review your cost model (what you charge for your service and whether or not the market will pay your price).

7. When you believe you have THE plan for success actually execute to the plan. Do not relegate the plan to the deepest, darkest corner of your hard drive never to be seen again. This is your most trusted partner in business and treat it like such. Go back and review the plan over time and adjust the numbers based on actual performance. review progress. Examine good months and what made them good against your plan. Examine bad months and what made them bad against your plan. Doing this will show you where you can improve, tighten up and expose opportunities for growth much quicker than relying on your gut. Fact based adjustment is always a good strategy.

I could continue this post for at least another couple of paragraphs, but I will stop here. Perhaps I will continue it in a "part two."

Monday, November 2, 2009

Internal Conflict and This Blog

I am having an internal debate about the content on this blog. I have reached an internal crossroads. I am conflicted about the content that I write about on this blog.

I have been writing about digital marketing and related topics, primarily, for the past 3 - 4 years and it is getting a bit tiresome for me. Yeah yeah I know there are always new ways to communicate within the marketing space, especially now with all of the hot topics spinning like social, new IP networks, digital out of home, etc.

Frankly, this stuff may be new to you or to a lot of people who are online yapping about the latest and greatest fad or trend, but it is not new to me and it has become boring to me. Maybe it is a mix of frustration and boredom? I am not sure. See, I told you I was conflicted.

I have been rattling this cage for a long time and it seems people still get caught up in the tools and the "hot topic" and continue to exercise poor business practice, which ultimately makes the "conversations" about tactics pre-mature at best. Case in point; a hotel that cannot even properly market its services on a web site is concerned about how it is going to "take advantage of the social space." Please. As a goofy gym teacher I used to have always said, "Get a grip." Figure out how to accurately communicate amenities online, sell your rooms for the night and actually deliver on the commitment. Once you have figured that out, then you can figure out how to leverage your raving fans. Until you do that you are essentially just performing damage control.

Here I am trying to figure out how to proceed with this blog. Do I focus more on personal things? If I do does anyone really give a crap or is it a cathartic exercise for me? Do I focus more on small business and leave the digital stuff as a mere piece of the overall small business pie?

I have started and had marginal success with a few different companies. That is experience and learning that may help someone else. Ha ha did I just admit to having marginal success, not huge, blockbuster entrepreneur of the year success?! That is not popular to do. I should have talked smack and said that I have had phenomenal success as a multi-company owner and blah blah blah. Oh well. Truth is valuable to me.

Anyway, I am trying to figure out how to move forward with this channel. Stick with digital marketing/media blather? Move to more personal writings? Write about business experience and make it more rounded with less focus on marketing?

I guess I will figure it out and when I do, it will be written about on this blog.
Until then maybe I will post videos I like on here. Who knows.