Stage 1 Clueless

I don’t mean stupid. Just that buyers at this stage don’t have your company or your product on their radar screen. If your purchase is a car, and like most people you go years between buying one, then you spend most of your life not thinking about new cars at all.

Stage 2 Curious

At some point it becomes time to consider a new car. You’re not ready to buy but you’re starting to pay attention. Maybe this stage was initiated by your car making some strange noise for the umpteenth time. Maybe you’ve had a couple kids since you bought your last vehicle and the car seats are starting to be annoying in your two-seater. Maybe some car company finally made something you’d like to buy and some ad really jumped out at you. But for some reason you’re now curious. Starting to look at models, features, prices etc.

Stage 3 Serious

Buyers at this stage have a budget and a time frame in mind. They’re in deal making mode, looking for the right place to purchase. Still doing some research but a different kind of research than those at stage 2. In the car scenario, you’ve narrowed down the type of car, the approximate price range, you know if you’re going for new or used and you’re starting to look for the place to buy it. Your research is helping you decide on what features, what make and model and maybe even what color. This stage carries on through the negotiation till you reach …

Stage 4 SOLD!

You’ve now plunked down your money and driven your vehicle off the lot. Congratulations. You’re now clueless about cars again, not to mention tires, service centers, and oil change locations. But you’ll go through the stages for those items soon enough.

How to Use This Information

A company needs sales to survive. If your company is alive, it has. Congratulations. But at some point as the company grows, you realize you need repeatable sales. An actual process. Something you can use to train and manage sales people and to increase sales. That’s where these 4 stages come in handy.

First Identify the Stages

Realize that every prospect is at one and only one stage at a time. The stages are mutually exclusive but progress is not always linear – it can loop. So learn what people do differently at each stage. There will be things they say (or don’t say) things they do or don’t do at each stage that are different enough you can identify them. The details vary with each industry, product and even type of customer. So this exercise must be quite customized to be helpful. For example, if I’m at the clueless stage about cars, the only thing I’m doing is looking at some commercials on TV that I can’t get away from and maybe I’ll think about some environmental breakthrough I’ve read about if it applies to cars.

But when I’m curious, when a new purchase in 6 months or so away, I’m starting to be more active in my research. I’m talking to my wife about it. I’m looking up things on the web. I’m paying more attention to ads on TV and other places.

At stage three, serious, now I’ve narrowed down the price and if not the exact make/model. I know if I’m going for a compact SUV or a mini-van. I’m looking at what feature are just nice and which ones I really need. I’m searching for a dealer or looking on-line for a seller.

Whatever you sell there are things customers do that differ for each stage. This is complicated by the fact that there may be different types of customers for your product (who do different things at each stage) and if you have a complex B2B sale there are people in different positions who may act differently from each other at the same stage. This makes the process of identifying the stages more complicated but not impossible. In fact, the more complicated it is, the more important it might be so you don’t waste your time and money.

It may be that you can’t tell by strictly being passive, but a certain set of questions (what’s your budget, what’s your time frame, who else are you talking to) will let you know the prospect’s stage.

Second Develop a Plan for each Stage

Once you know how to determine what stage the prospect is at, you need to determine the best thing for you to do at each stage. There are certain questions you ask at the beginning and others you only ask at stage 3. There may be informational or entertaining things you send my way if I’m just curious, but negotiations you do when I’m serious. You need to know what to do differently based on what stage I’m at.

If you do the wrong thing at the wrong stage, things will not go well. You may turn me off when I’m ready to buy. Or you may annoy me when I’m doing research and I’ll never come back. Or you may not close the deal when I’m ready to make a purchase. The point is that what you do at each stage is different. And my response to your actions will show you if I’ve moved to the next stage or not. If I haven’t then you can’t either.

Marketing or Sales

In general, the things you do for a buyer at the start of the journey (Clueless and Curious) tend to be marketing activities and the things you do at the end (Curious, Serious, Sold) tend to be sales activities. Where the line is actually drawn differs by industry, product etc. But Marketing and Sales should work together as different parts of the same journey. This is why I like the position I’ve heard about recently: Chief Revenue Officer. Marketing AND Sales report to the CRO.

What about Social Media and the Web?

These are tools, but they don’t change the buyer’s journey. Just like a well-placed item at a supermarket checkout can make me go from clueless to sold in seconds, so can a website or even a tweet. Well maybe a tweet. But in any case only if it’s done for the right product, to the right customer, in the right context. In a more protracted sale, building a relationship with me when I’m clueless might be cost effective with a blog or facebook page in ways it never was in print. Then when I become curious or serious we already know each other. But just like any tool, it’s there to do a job. In this case it doesn’t change the nature of the buyer’s journey, but it may help you understand your prospects and react to them better.

Takeaways:

• Think like a buyer and learn what stage your prospect is at.
• Develop a different plan for each stage.
• You now have a sales process that you can use to train and monitor sales people with.

If you have a website; if you write for websites; if you design websites, take an hour and watch this.

I know. It’s a whole hour. But it’s worth it.

http://www.marketingexperiments.com/images/multifiles/articulate/webclinic-07-20-11/player.html

It will be helpful to have some documents to do this. But a typical business plan is not usually the right document. The right ones capture what you thought would happen, and more importantly, why you thought it would happen that way. Then they make it easy to compare what did happen and why to what you were thinking at the time.

Here’s an example. In the marketing section, most business plans cover who the market is, how fast it’s growing etc. They often get this information from generic research reports that talk about market segments. But market segments are irrelevant to a small company (and all start-ups begin as small companies). Then the business plan makes some guess at what percentage of that market they can capture. The guess seems to be based on what number will look like they can make a lot of money, while not make investors think they are smoking crack.

But this evades the more important questions about your market: how you’re going to find them, educate them about your product and ultimately sell to them. And how much time this will all take, and how much it will cost?

Here are some better things to document about your market:

Rank your market in order of the cheapest / easiest to sell to. For each group estimate the following:

• What it would cost to sell to a customer in that group?
• How long it would take?
• What’s the average size of a purchase?
• What’s the average life-time value of a customer in that group?
• How many people there are in this group?
• Give examples of what you base this information on?

Never forget that a customer is a person. It’s not a company, a family, a household, or a demographic. It’s the person (or people) in that organization who actually decides to pay the money. Say you want to open a family restaurant. Yes, you need to know how many families live within a certain distance from your place. But don’t stop there. The time and cost of marketing a meal to a kid (think Chuck E. Cheese or McDonald’s happy meal) is different from marketing a meal to an overworked Mom or to a grandparent. Who is going to decide to spend money at your place and what will it cost to get them to do so?

Document your thoughts on that. Then you can regularly compare what your actual sales are, and what it actually costs to make a sale to what you were thinking. If you’ve been open a month you have enough data to start the process. The actuals won’t match up (trust me on this) but the point is to get better at projecting so that by month 6 you’re doing a better job and by month 18 you’re doing a good enough job to know if you should stay in business, close the doors or raise more funds. And if you do need to raise funds, that kind of detail will convince investors yours is a business not just a product.

Takeaway:

• The purpose of planning is not the plan – it’s to get better at predicting what the future will bring and how to be in the best position when it happens.

[tags] small business, entrepreneur, business plan, planning , CEO Skills [/tags]

Even with that caveat, Hugh MacLeod’s explanation is impressive.

Note: The picture is from the Stormhoek Blog

Takeaways:

• Know the market you’re in (see Hugh’s #10).
• Marketing can become a conversation not a lecture. The implications of that are huge.
• The differences can appear subtle yet have amazing impact.
• How it applies to you and your market will probably be very different from how it applies to anyone else (even your competitors).
• That means you kind of have to make it up. But you have to get the subtlety / amazing impact connection to do it well.
• Granted these are not just takeaways from that one post but from a lot of what I’ve been reading on Hugh’s blog and Seth Godin’s.

[Update: The hyperbole is mine not Hugh's. I knew that. Check out Hugh's comment here]
[tags] entrepreneur, marketing, web 2.0, blogging, small business [/tags]

So I’m off to St. Louis. Probably won’t post again till I return next week.

I have just two nits to pick. The first is #1 Don’t run out of money.

Yes but … especially for start ups, spend each marketing dollar like it’s your last. There are times when not having enough money makes you watch each dollar so closely you stop doing stuff that doesn’t work a lot quicker than folks with a big budget.

The second is #5. If it makes you nervous, it’s probably a good idea. If you’re sure you’re right, you probably aren’t.

The last part is true. The first is not. Good ideas will make you nervous. But not everything that makes you nervous is a good idea.

This post from John Dodds is directed at geeks trying to market software products. Just knowing that makes it easy to see how much of it applies to the rest of us. (In case you don’t know, when he gets to #6, RTFM means Read The F*&%ing Manual)

[UPDATE:  The question came from Neville Franks, who produces Surfulator a great program for capturing and storing web pages]
This is a very common situation with people who are great at building products. The reason it’s common with software products, is that you (and by you I mean some very talented people) can build things nights and weekends without quitting your day job and without investing a whole lot of money. Products that take real funds, often require sales or other interaction with customer earlier in the process. But I digress.

Here’s what I told him.

The question you’re asking [what do I do with my time when I'm marketing and sellling] is like asking “What do I do to get a date?” The answer depends a lot on who you are, who you want to date, and what in fact you mean by a date. A 45 year old, suburban, divorced father of two who wants to develop a relationship with a woman that may lead to marriage will do different things than a 22 year old, single, goth lesbian whose idea of a date is a short, sexual encounter.

Dating is actually a good analogy for business. This is an over simplification but:

A market is a bunch of people who value your product more than they value their money.

Marketing is communicating with them (in every way – from the interface of your product to web sites, ads, etc) so that they become convinced of the value of your product. The result of good marketing is that they will contact you or at least be receptive when you contact them.

What’s important about marketing is knowing that what you do and say and communicate tells a story – whether you like it or not. To be effective it has to be a consistent story (would you buy a Tiffany’s diamond bracelet from a Sam’s club warehouse?) and it has to be consistent with what your market already believes. Some people will never be convinced to buy an American car, and some will never be convinced to buy a foreign one. For more on this, read Seth Godin’s blog for a while.

Sales is contacting them or responding to their contacts with you. The result of sales is actually getting them to exchange money for your product NOW.

So you have to spend time getting to know the people who could benefit from your product. Learn why THEY think it might help them and learn what convinces them of your value.

Just because you had a couple clients pay you to develop something doesn’t mean others in the same demographic would also be willing to pay for it. It’s logical that it would equate, but business, like dating, is not always logical. So get to know these people and learn.

You could start by talking to your current clients about why they felt the value was worth the money. See if they know colleagues or others who you might talk to. Use phone calls, visits as well as blogs and web sites.

Be open to seeing patterns that you didn’t expect. You might find people who “Should” love your stuff don’t. And people you never thought would, actually love it but for all kinds of reasons you never imagined.

When you find a vein, go with it. Make it easy for these people to find you and buy from you.

Sorry to be so vague, but without knowing more details it’s hard to give specifics.

Actually the vagueness, while not a help to him, makes this post useful to a more general audience.

Takeaways:

• Marketing is everything you do (from design to ads) that communicates to your market. The result of good marketing is that the right ones will contact you or at least be receptive when you contact them. And that the people who are not your market won’t.
• Sales is contacting them or responding to their contacts with you. The result of sales is actually getting them to exchange money for your product NOW.
• You have to spend time getting to know the people who could benefit from your product. Learn why THEY think it might help them and learn what convinces them of your value.
• You can’t ask the these questions directly because A) they don’t know and B) until you’ve gotten them to trust you, the won’t tell you the truth. This is what makes the whole process like dating.

His post is about the software business and his main point is a the bottom. But I think it applies to may other companies as well.  Not knowing your business model is a huge impediment to business growth.

Congratulations Terry. Her email was picked at random and I’ll be sending her A Whole New Mind (the book anyway).

Thanks to all who participated. See you in St. Louis – please tap me on the shoulder and let me know you entered the contest. But note: I don’t have my beard anymore (it’s an old picture).

Allow passers by to decide if they should stop at your booth. That’s it.

To do that, it should be visually striking, and informative. The information should be in bold, short, jargon-free words. As someone is walking by, without slowing down, they should be able to turn their head and read:

• Who you are
• What you do
• Why they should (or should not) stop

The should not’s are just as important as the shoulds. You don’t want to waste your time on the wrong folks – or worse, have the so booth crowded with the wrong visitors that you don’t have time to spend with the right ones.

The display type I’m showing you does this (if you design it well). It also has the benefits of being:

• Cheap – less than $300 to produce (exclusive of design costs)
• Fast to set up. Because anyone can do it in 5 min – no need to pay union wages for help you don’t need, or pay for shipping and storage costs at inflated prices, or fly in the night before to set up.
• Easy to transport. We carry ours in a surf-board bag. It has straps like a back pack. We can check in on an airplane, and walk it right into the show.
• Looks great. It’s not huge and overwhelming like those WALL O’ VELCRO displays, but it does look professional. And most of those wall displays have so much jargon and fluff in them they don’t do what they’re supposed to anyway.

It’s made of 3 posters. Each 24×36 inches mounted on sturdy plastic or foam core. Once your designer comes up with a PDF file, Kinko’s can print and mount them for about $80 each. Put a table across the back of the booth (a high table gives more visibility) and mount them on small easels. That’s it.

We use another table across the side of the booth to lay out literature. We try to get a corner booth so people can see it from two angles.

Takeaways:

• If the show is a buying show where people come to place orders then you probably want to highlight the merchandise, and a cheap display is not what you want.
• If it’s not a buying show, at least half the benefit comes from what you do after the show with the contacts you made there. If you don’t do that right you should evaluate whether to do the show at all.