By Art Reisman, CEO and co-founder of APconnections, makers of the NetEqualizer
Updated April 25th , 2010
Aside from a few freakish start ups, very few products will take off with out some form of promotion. However, since founding APconnections in 2003, we’ve learned that marketing can be a double-edged sword. Over time, we’ve been able to build upon both our successes as well as mistakes, coming up with a few dos and don’ts of marketing a tech start up along the way. Here are a few of the key points:
1) Make sure your marketing company has skin in the game
Most marketing firms are staffed by people who went to college and took soft course work, meaning they were not into the black and white of the scientific method. Perhaps they had a course or two with this emphasis, but it’s not likely to be as ingrained as perhaps a physics or psychology major whose course work included extensive lab experiments showing cause and effect.
Although some creative skill is necessary to be a good marketing person, the down side is most people in this industry tend to remain artsy and vague with how they can measure results. When negotiating with marketing companies (or people), we came up with a simple formula to measure results and provide a metric which was easy to quantify — hits to the web site.
In our case it was very simple. We had a baseline established already and we were only going to change one variable — marketing. Hence, it would be easy to tie any increase in web traffic to a marketing effort. To make sure that any benefit of doubt went to our marketing firm, we decided any increase in web traffic, regardless of cause, would be credited to their efforts.
Once we tied marketing fees exclusively to a metric that could be measured, we were able to eliminate several marketing firms, many of which headed for the hills never to be seen from again.
2) Round two — good web traffic verses bad traffic
Having solved the problems of paying for results, we came across another hurdle. We’ll just call it good traffic verses bad traffic. The easiest way to describe this is by example.
Our product, the NetEqualizer, is meant to be sold to commercial operators and businesses where there is Internet congestion. An obvious catch-all key phrase to lead with in marketing literature would be, “speed up your Internet connection”.
If you throw this type of tag line into a generic advertisement to a broad audience, perhaps 99 percent of the people who follow up on it will be home users, kids playing World of Warcraft, looking for some tool they can load up on their Windows machine for $25. In other words, the majority of these follow ups would certainly not be our target market.
What we found was that our consignment-based marketing people were not screening this traffic out. We believe this disconnect goes back to their inability to use the scientific method to control variables. So, as you can imagine, we initially had a flood of inquiries outside our target market which turned out to be a big waste of our time. The solution to ending this march of unqualified leads was to put a higher price in any literature or teasers and to emphasize our product was for commercial users etc. So, instead of just promoting the potential to speed up Internet traffic, we made NetEqualizer’s starting price clear from the beginning.
3) Make sure your marketing people understand how your product is used and take an honest interest in it
We would spend hours explaining our target market and details about our product only to find out that this information would go in one ear and out the other. When we finally found somebody who had the capacity to understand our product we doubled their pay. It was worth it in time saved.
4) Consignment ads only
Once you have decided on an effective message in an advertisement, follow this rule — Never pay a dime up front to bolster your ad’s exposure just to increase your market presence. Yes market presence is good, but unless you can measure this in terms of some metric, just don’t do it.
Any advertisement you place should only charge you when somebody clicks on it. I am not talking about discount coupons for a local business here. I am talking about selling a product to a broad national or global audience. This edict pretty much rules out print advertising. To be fair, I have heard from other CEO’s of tech companies that if you stick with print ads and spend a good deal of cash, they will pay-off, but this shouldn’t be your first or only option. Until you have exhausted every conceivable outlet for consignment based advertising, why risk digging any dry wells?
Our experience with six weeks of continuous quarter- and half-page ads in tech magazines brought zero impact. Nothing. Nada. We measured no increase in web hits. Maybe we did increase awareness, but awareness has no value if you go bankrupt establishing it and don’t see any returns.
Of course, while there are no guarantees for successful marketing, these four tips have been tested and proven effective at APconnections over the past several years.
5) Avoid being strung out
Perhaps this tip should be number one as it is essential to understand how companies will string you out. As a start up, with an idea you will likely get conditional inquiries. Can you product do “this”, can we we customize it ? Often times the more questions, the more uncertain the customer is about their own business. You MUST establish the customers willingness to pay before getting wrapped up in the promise of future sales. Obviously you cannot demand payment on a first consultation with a prospect, but this is a good time to set some expecations that your time is valuable. I bring this up because at this very moment I am in talks with a large customer interested in our product that has been asking questions for over a month. This morning I basically told them (nicely)I will continue the conversation if and when they purchase their first unit from us. For all I know I am dealing with an underling that has time on his hands but no ability to influence a purchase decision. Getting them to purchase something is a big first step toward qualification. If you fail to master qualification you will find yourself borrowing money from relatives to pay your rent or out of business very quickly.
I’d also suggest you look at our tips for using google ads.
Another great site for start ups is entrepreneurship.org
Here is a marketing company (outspoken Media) that I ran across last Friday , I have not talked to them yet but I really like their bio’s and attitude from their web site.
Good luck!
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