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Free Just Means Startups Are Afraid to Compete

free(Note: For new startup-related blog posts, head to my ME Consulting Website)

I don’t like free.

Free makes me uneasy because nothing is really free. There’s always some kind of cost involved, even though it can be difficult to see at first.

My aversion to free includes startups that offer free services.

Yes, free is a powerful marketing tool because who, after all, doesn’t like getting something for nothing.

Far too often, however, free is a lazy marketing short-cut that does little to create or drive a business.

There are still too many startups that offer a free service, and then plan to create premium services after they’ve attracted lots of users.

At the same time, there are VCs happy to pour money into these startups, which are popular but hoping they can somehow make their product even better so a small percentage of  users will pay for it.

To me, startups that embrace free (not fermium) are afraid.

They’re afraid no one will like their product enough to pay for it.

They’re afraid the competition is too strong.

They’re afraid of not being good enough at sales and marketing.

They’re afraid to build a business.

This is not to suggest free-first never works but free strikes me as the emperor with no clothes.

Everyone is so enthralled with the idea of attracting lots of eyeballs that no one wants to be the little boy who says “Startup, how do you plan on making money?” (Note: A must-read is Mark Suster’s blog post on why startups need to “ring the cash register”)

There are people who contend free is different for online startups but that’s just digital gobbledygook.

Can you imagine free in the “real world” where you could, for example, walk into a restaurant for a free meal because the owner believes they will be able to charge once it has enough patrons?

Over the past year, I have started to slowly but surely buy or subscribe to more online services.

While it has a lot to do with more features and customer service, a key consideration is supporting startups trying to become businesses as opposed to emperors.

What do you think? Is there any merit to only free or free-first?

More: Check out Connor Tomas O’Brien’s article about how we need to move away from a free culture.

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This Week in Canadian Startups (July 20, 2013)

This Week in Canadian StartupsThe latest edition of “This Week in Canadian Startups” kicks off with Apple’s purchase of Toronto-based Locationary for “10s of millions of dollars”.

It’s apparently only the second time Apple has waded north of the border to make an acquisition. The question is whether the deal is representative of a cross-border trend, or whether it’s an anomaly. No doubt, many people will get themselves into a lather about how the purchase reflects an important development.

The newsletter also includes a story on how a spilled coffee led to a $1-million business, how startups should focus on building their brands rather than distribution, and how startups need to be aware of the costs of content marketing.

It’s easy to sign up for the newsletter, which is published every Saturday morning. If you have news or content you think would be good for the newsletter, drop me a line: mark@markevans.ca

The Cost of Content Marketing for Startups

free lunchFrom the outside looking in, content marketing seems like an attractive opportunity for startups.

On the plus side of the ledger, content marketing can establish startups as thought leaders and domain experts, it can provide potential and existing customers with relevant and interesting information, and it can drive search engine optimization.

This is why startups are so enthusiastic about content marketing but there is a key variable that can’t be ignored: the “cost” of creating content to drive marketing.

There are two elements to cost: people and money. Both consume a startup’s most valuable resources: time and cash. But the hard truth is there’s no way around spending time or cash to embrace content marketing.

For startups, it comes down to figuring out who is going to create the content. It could be someone internal who has good writing skills. It could be a contractor or agency, or it could be new hire.

So what’s the right option?

It comes down to how much content has to be created to meet the needs of target audiences. In some markets, a wide variety of content has to be pumped out. In others, a more focused approach is viable.

Once the needs are determined, it comes down to deciding what kind of content to create. It could be a blog, videos, a monthly newsletter, case studies or white papers.

Whatever the medium, an investment (time and/or people) will need to be made. As important, a startup needs to commit itself to making a steady investment given content marketing is a marathon, not a sprint.

For startups not quite sure about what content to create, the safest route may be a blog for a variety of reasons.

Out of the gate, a blog provides a startup with the opportunity to provide insight, expertise and information, as well as search engine juice.

As important, a blog can become an effective “engine” that can generate re-purposed content for other channels such as case studies, white papers and a newsletter.

Another benefit of a blog is it can be supported by multiple people, who can offer different perspectives. At the same time, it can also be a way for a startup to nurture corporate culture by getting many people involved in a marketing and sales program.

The bottom line: is content marketing is not an easy proposition for startups because there is a cost involved. As much as content marketing is appealing, every startups needs to assess whether there is enough of a ROI to jump on the bandwagon.

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What’s Your Story, Morning Glory?

what's your storyWhat’s your story? Why should I pay attention to you?

For any business, these are fundamental questions they must be answered to capture the attention of customers, employees, investors and other stakeholders.

But it’s troubling to see so many startups struggle with their inability to tell a good story, even when they have interesting products.

The reason so many startups fail at storytelling is simple: they don’t take a customer-centric approach to their marketing and sales.

Instead, their focus is themselves and what their products offer. It may not sound like a big difference but talking at your customers rather than meeting their needs or interests is a big, fat fail.

In working with dozens of startups, good storytelling begins with strong core messaging that answers the following key questions:

1. What is your product?

2. What does it do?

3. What are the leading benefits for users? (aka “What’s in it for me?”)

4. How is it unique, different and/or better than the alternatives?

There are other variables involved in the development of core messaging but being able to nail these four questions helps a startup tackle big chunks of the exercise.

So why is core messaging so important, other than letting a startup tell a good story?

In many respects, core messaging establishes a solid foundation upon which a startup can layer on its marketing and sales activities. Core messaging also provides a startup with consistency, coherence and cohesiveness (the three C’s) in it and its employees engage with different stakeholders.

Without a solid foundation, startups not only have trouble effectively telling a customer-centric story but struggle to effectively deliver things such as a Website that drives the sales funnel, social media and content marketing.

So how do startups begin with core messaging? Here are some key steps:

1. It begins with thinking about the customer. What are their needs, interests and points of pain? What products are they using, including those delivered by non-direct rivals – e.g. Excel vs. accounting software? What would make a customer happier, more productive or profitable?

2. Think about how your product can be embraced by potential customers. What are the key benefits and features that should be highlighted? Remember, we’re talking about the needs of  customers, not what a startup wants to tell customers. To get into customer-centric mode, a good exercise is a brainstorming session that involves people from different parts of the business who can offer a variety of perspectives.

3. Identify the key themes and topics that can drive the development of core messaging. It could be a single word or a phrase that has the potential to resonate with customers. Then, test these ideas internally and externally to get a better sense of whether you’re headed in the right direction.

Here are some important things to remember in developing core messaging:

1. It’s an iterative process that can unfold in different ways. If you’re lucky, you can hit a home run but core messaging usually takes time, patience and commitment.

2. Core messaging is a fluid, dynamic creature because it can change over time as the market and product evolves. Think of core messaging as drawing a line in the sand rather than etching something in stone.

3. Be prepared to think differently. Many startups are so focused on their products, they lose an important tool: perspective. It means new ideas and concepts can be quickly brushed aside because they don’t align with the current view of the world. This is a mistake that can undermine the creation of better and more effective storytelling.

Bottom line: If your story isn’t connecting with target audiences, your core messaging may need an overhaul. Rather than be intimidated, think about it as a one step back, two steps forward exercise that sets the stage for growth.

The development of core messaging is a key part of my startup marketing business. If you want to learn more, contact me.

More: For some insight on why startups need to focus on telling their story, check out Marco Barros’ post on why building awareness is more important than distribution.

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Six Questions Your Website Must Answer

Everyone recognizes the importance of a Website so why is it that so many companies drop the ball when it comes to their design and content?

In looking at hundreds of Websites recently for some startup marketing projects, it’s troubling and surprising that so many fail to deliver a solid, let alone great, user experience.

Here are some key questions a Website has to answer:

1. What what does your product do? People are digitally impatient so they don’t spend a lot of time trying to figure out what a company does. It means telling people quickly and clearly (and we’re talking about in seconds) about what a product does and, as important, how it meets the needs or interests of a potential customer. This information has to be snappy and easy to understand, which means using a small number of words and eye-catching graphics or photos. The penalty for dropping the ball is people will click away to another Website.

Best practices: Create clear and well-articulated messaging about what your product does and the benefits. Start with your homepage, and then continue to promote on other pages.

2. Who are you? Unless we’re taking about a major brand, most companies have to offer information about what they do, who they serve, and the people behind the scenes. The best vehicle is the “About” page, but too many companies don’t give it enough time and attention. In too many cases, About pages are a waste of time because companies don’t tell people what they do and who should use their product. Instead, they offer a confusing mash-up of history, philosophy, culture and approach, which makes the About page useless.

Best practices: Quickly tell people what you do and who you’re targeting, as well as offering links to the management team (including photos). And don’t be afraid of being creative by including things such as a timeline to show people the company’s progress

3. How does it work? Once your homepage captures someone’s attention, you may need to tell them more about the product so they understand how they could use it. A good “How it Works” page featuring some text, graphics and/or a video should let people quickly grasp what you product does, the key benefits and how they could embrace it.

Best practices: Make it quick and simple to understand what’s involved in using your product. The easier you make it, the more likely someone will move closer to making a purchase.

4. How are you different? There are plenty of competitive options so it’s important to illustrate your product’s unique characteristics and how they are different and/or superior from rivals. Don’t be afraid to boast – after all, this is about marketing and sales. Consider the use of interesting and clear benefits statement on the homepage, as well as charts that show how your product stacks up against competitors.

Best practices: Be confident and bold about how you stand out from the crowd. Highlight the benefits and features that let you outflank the competition to encourage potential customers that you’re the better option.

5. How much does it cost? You’d be surprised by how many companies make it difficult to discover on their Websites how much their products cost. But as someone goes through the purchase funnel, they’re eventually going to want to know how much it will set them back, so why not make it easy. For products with multiple pricing tiers, a clear and easy to understand pricing chart can be a valuable sales tool.

Best practice: At some point, the price of your product could be a deal-maker or deal-breaker. If you’ve done a good job of showing people the value of your product, you shouldn’t be reluctant to give them clear pricing information

5. Tell me how to buy your product? If your value propositions, benefits and features seem promising, you need to make it a snap for people to make a purchase. There should be strong calls to action, as well as clear instructions on how to buy – whether it’s on your Website or though partners.

Best practices: If someone wants to make a purchase, make it as easy as possible. If the purchase happens on your Website, the process should involve as few clicks as possible. If it’s through a partner, send people to a specific page rather than having them peck around on another Website.

6. How do I contact you? It sounds straightforward but it’s important to give people a variety of options to get more information, ask questions, inquire about partnership opportunities, or provide feedback. A “Contact” page should provide an email address, telephone number, physical address and people who can handle different topics.

Best practices: Let’s face it, most potential customers will ask questions. Your Website should provide plenty of answers through calls to action and a solid FAQ (an under-rated but valuable creature). At the same time, there will be some people who will want more information so give them options to serve the way they want to communicate.

Bottom line: A Website needs to effectively meet the needs and interests of potential customers, as opposed to a company’s needs and interests. It’s a slightly different look through the lens but doing a good job of telling people the best information at the right time is a great way to make your marketing and sales efforts more effective.

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Don’t Drop the Post-Acquisition Marketing Ball

Marketing-Strategy_minStartups work so hard to acquire customers that it’s always surprising and troubling that so many of them drop the marketing ball after winning the initial battle.

Here’s the way it usually works: A startup will have an interesting product with clear benefits, solid messaging, and value propositions, and engaged marketing and sales efforts.

It’s a good enough mix that it attracts customers willing to take a chance doing business with a company that has a short track record and/or minimal brand awareness.

The problem startups once the customer says “yes”. Rather than really closing the deal and making sure they’ve been able to embrace and get started with the product, too many startups do little or nothing. Instead, they think the game is over when, in fact, it has just begun.

Many startups, for example, will deliver confirmation emails that have little other than a short welcome message and someone’s username. There’s no sizzle, no guidance, no instructions on what to do next…and, frankly, no love.

Mistake. Big mistake.

The reality is attracting a customer is only part of the marketing and sales battle. Once a customer signs up, the marketing and sales efforts needs to continue through the entire life-cycle. Through email, social media, newsletters and customer service, a startup needs to nurture, support and embrace its customers.

A startup needs to show the customer how much their business is valued, encourage them to check out new features, highlight the benefits, treat them like a member of the family, and always be marketing and selling in ways that are relevant and interesting.

By keeping the marketing and sales engine going after the customer climbs on board, it’s not only a good way to create loyal customers but happy customers can turn into your best marketing and sales team.

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