I recently sat down with Scott Orn of Kruze Consulting (an accounting firm that works with startups) and talked about ForUsAll. ForUsAll is a 401(k) advisor, and we help small businesses offer their employees attractive retirement plans. You can listen to the interview with me, Healy Jones, here!
I’ve been thinking about channels a lot recently – where potential buyers/users come from, what were they doing when the ‘showed up’ and how did they even start thinking about making a purchase? When it comes to practical execution I find that understanding about purchase intent is a great way to cut the chase and efficiently decide on marketing actions that will result in either sales or learnings with data on what didn’t work.
By purchase intent, I mean the moment when a potential customer expresses interest in paying for a solution to a problem.
For a startup, there are at least two critical moments when you want to ‘exploit’ a potential customer’s purchase intent: a) when the person is forming purchase intent and b) when a person is expressing purchase intent. (I don’t like the word exploit, but it gets the point across.)
The funny thing is that now that I’ve run marketing at two different startups, I’ve found that the exact same channel could be in the formation phase for one company and at the expression phase for another.
For example, at my last company national press would drive a large number of new users into our purchasing funnel. Small business owners would read about us on a respected news site and decide to give the service a try, with many of them putting down their credit cards to begin using the service. Choosing to read an article about, say scanning receipts, shows that a person is already interested in the solution; nobody reads articles on b2b solutions for fun! Formation is triggered when the title the of the article is read “hey I have this problem,” and leads to purchase expression when the reader clicks to OfficeDrop’s website “this sounds like a great solution!”
At Boundless, national press does drive a lot of visits, but doesn’t covert in the same way. This is because students don’t make textbook buying decisions based off of news articles; students express intent during specific times of the school year. While they may be intrigued by an article on a way to save money with Boundless textbook alternatives, reading the article only helps them form purchase intent. It doesn’t directly lead to the expression of purchase. Instead, they (hopefully) remember to check out Boundless at the start of the next semester when they are looking for books. So news articles help the potential user form the desire to try out our solution when the time is right, but won’t directly lead to purchasing.
Supporting both sides of purchase intent is important. The Boundless press helps with branding (hard to measure) but also drives increased on page and in funnel conversion (by providing third party proof of quality.) So we can quantify the benefit beyond the hard to measure branding and awareness. However, my main point is that the exact same channel influenced different parts of purchase intent for two different startups. And if you don’t measure your channels you’ll never know if you are positively impacting anything, so careful tracking is critical to success.
Lots of good content all of a sudden on both mobile and online marketing. Here are some good ones:
- Triggered emails have HUGE open and click throughs: Online Media Daily reports on a study that shows that triggered emails (emails that are sent when a user takes a specific action, such as abandons a shopping cart, have a much higher click through than ordinary marketing emails.”Triggered open rates performed at 75.1% higher”
- I recently posted about email marketing subject line performance. Here are the subject lines email marketers should avoid, and which ones drive good open rates.
- The best email marketing frequency depends on your industry & users, but in general the more you can do the better.
- Yup, people are really opening emails on mobile devices these days; Returnpath “reports that mobile open share has increased 300% since 2010, and shows no sign of slowing, with four out of 10 emails sent being read on a mobile device.” Read more.
- “The iPhone and Android smartphones remain the most popular smartphone platforms for messaging. iOS users account for more than half of those opting into MMS and text-messaging campaigns, compared to 34% coming through Android phones. Those levels are up from 23.6%, and 16%, respectively, in April. BlackBerry accounted for 7% of opt-in messaging.” Read more.
I found this great infographic on Entrepreneur, listing various legal structures available to startups and showing each legal structure’s pros and cons.
update: OK, so this infographic did not paste over very well, so click on that link above to go see it!!
Recently Prasad Thammineni, Healy Jones (me), & one of our investors, David Mars, recent participated on a panel at Wharton reunion talking about how we worked together to grow OfficeDrop. Tyler Wry, Wharton professor, lead the discussion and recently posted an article on the panel for Wharton Magazine.
Tyler’s post, entitled “Teaching Lean Entrepreneurs,” dives into how a business school education can be an asset when running a lean startup. Tyler defines the lean startup, then goes into how OfficeDrop combined some of the theories we learned about at Wharton with the practices of running a lean startup.
Often times business school/MBAs are made fun of by startuppers; this is a somewhat fair stereotype – A lot of times MBAs think that they will join a startup and the the “strategy” person or run a bunch of analysis in Excel. Of course, we all know that startups need doers! But the MBA can be helpful as it provides frameworks that can be used to quickly make sense of a rapidly changing competitive environment that startups face. Also, things like pricing, positioning, etc are all classes taught at business school, and a good school will at least help you be prepared to know what you don’t know so you can launch.
Tyler had an interesting conclusion to his piece, and one that I agree with. He said, “For me, this drove home the point that entrepreneurship isn’t really that different than any other area of business—training matters. Anyone can start a company, and many scientists and entrepreneurs who don’t know the first thing about business become successful entrepreneurs. On average, though, the startups that are most likely to succeed have some serious business chops behind them.”
One of my sysadmins pointed out a great post from yesterday on using a decoy on your pricing page. If done well this can be a great strategy.
I’ve used this decoy pricing tactic on OfficeDrop’s pricing pages for a while. In particular, our digital filing pricing page has an expensive plan that has nicely increased overall conversion on the page.
The main result of this decoy is increased conversion on the page. In otherwords, a higher number & percent of visitors to the page pick a plan and become an OfficeDrop user. It hasn’t really changed the MIX of plans (very few people pick the expensive plan and the same % of people pick the other plans). But I consider the decoy plan a success because it’s getting more people into our funnel.
You can see the pop here when we added a decoy pricing plan to our standard digital filing pricing page. This chart is the % of visitors who visited the page and then signed up for a plan. I.e. the conversion rate of the page. Note that there is a little dip in the beginning that has nothing to do with pricing; it’s a data error. The way to look at this w/o the data error is the two little peaks on the left are close to the pre-decoy conversion rate average; the hump on the rigth is the new average post addition of the decoy pricing plan.
What the Decoy Pricing Plan Looks Like
The decoy pricing is the “
ScanPro” “ScanFive” plan on the right. (Thanks for the typo catch Pete!)
It’s designed to be expensive and to make clear that we’ve got the ability to support additional users in the plans… it’s not really clicked that often.
Anyways, check out the post I linked to above. You’ll find it very solid, and it explains why a decoy plan works.