Posts Tagged ‘Marketing’

I attended a shareholders meeting last night for a small start-up.

The marketing manager mentioned their “viral coefficient”.

I had to raise my hand and ask what a viral coefficient actually is. The embarrassment was only slightly lessened when the majority of other people in the room confessed they’d never heard of it either.

Embarrassment quickly turned to shame once it was explained to me. It’s such a simple concept and one I really should have known.

I’m operating on the assumption that some readers of this blog may not be familiar with the concept either. So to save you embarrassment , here it is:

A viral co-efficient of 1 means each of your customers in turn brings you one more customer. It’s as simple as that. So a coefficient of 0.5 means every other customer brings you a new one. 0.1 would mean one in ten customers bring you a new customer.

So the goal is to achieve as high a number as possible. I’m told Facebook has a viral coefficient of 12. So each user brings in 12 others. A nice position to be in as once you pass 1, your users/customers grow exponentially.

After the Global Entrepreneurship Week launch event last Monday I went along to the IoD for the final of The Pitch. Think Dragons Den without the TV cameras.

It was an entertaining afternoon with 6 businesses pitching for a prize package worth £50,000, Anthony Lau, Founder of Cyclehoop was crowned the winner.

One thing that did worry me was the finalists response when asked about their marketing plan. For some of them their entire marketing plan could be summed up in one word: Google. “If you search for x we’re number one on Google”.

It’s something I see way too often. Relying on natural traffic from Google for your sales is a very precarious position to be in. Google can change it’s algorithm overnight and you can drop from page 1 to page 100 – effectively putting you out of business.

Whilst free traffic (as opposed to paid-for Adwords) is highly desirable – and we certainly do well from it ourselves – you should never rely on it as your primary source of new business.

If you’re ranking well now then great – but make sure you use the revenue generated by that traffic to implement a marketing plan so that you’re not so dependent on one source for your livelihood.

What’s almost as worrying is the  judges apparent willingness to accept “Google” as an acceptable response to “What’s your marketing plan?”.

It isn’t.

It’d be fair to say we court controversy here at KashFlow when it comes to marketing and this blog. Setting fire to boxed software, implying the over 60’s are over the hill, saying designers are all crap at business, a public dumping letter to Vodafone,  Being evangelical and preachy about business cards - the list goes on.

But it works for us. The marketing challenge for any small business is standing out from the crowd. Our approach has got us huge amounts of coverage in the trade, national and international press and has had a positive impact on our bottom line.

Not Sexy

We sell accounting software – that’s “accounting” and “software” combined. Not exactly the source material for a sexy  action-packed hollywood blockbuster starring Liv Tyler and Daniel Craig. So a little but of fun and humour brightens things up for all concerned and stops us all boring ourselves silly.

Controversy Around Every Corner

But sometimes controversy lurks where you least expect it.

We recently improved our Settings page to make it easier to use and introduced icons for all the different sub pages. The icon we used for “VAT Settings” is the icon used at the top of this blog post – that of a masked robber.

I posted a link to this on Twitter yesterday, just for something to say,  and within minutes it was retweeted (to the uninitiated, that means other people on Twitter reposted the message to everyone that reads their posts) and was seen by tens of thousands of people. Over 5,000 other people saw it just because the Guardian computer Editor, Jack Schofield,  retweeted it.

I Can Hear The Sirens Coming

I thought that was the end of it, but then in came the cop mentioned in the title with a blog post about it. He’s essentially saying it’s a PR faux pas because VAT isn’t robbery. I’ll copy and paste my response:

I totally agree. It’s an inappropriate image for VAT for the reason you state above. The worst that can be said about VAT is that we’re unpaid tax collectors for HMRC.

I guess the reason for the image is tapping into the general feeling that people are being “robbed by the tax man” – not VAT specifically.

Regardless of how apt the image is, it got retweeted to a few tens of thousands of people on Twitter within minutes and got us free advert on AccManPro. So I can’t see it being a Bad Thing.

I only wish I’d linked to a blog post with it rather than just to the image so we could have converted more of that traffic into sales.

Inappropriate image? Yes
Harmful to anyone? No
Controversial? Perhaps
Useful free marketing? Yes!

Business cards seem to be getting flashier and flashier. I’m seeing more and more cards that are covered in marketing messages, calls to action and sales pitches.

Your business card is NOT a sales brochure so don’t treat it like one.

Your business card should have your logo, web address and contact details – it doesn’t need much more than that.

It doesn’t need to fold out into an origami duck, it doesn’t need to be inserted into a CD drive, it doesn’t need to tell us about your 10% discount to new customers, it doesn’t need to play the national anthem whenever it’s picked up and it doesn’t need to taste of strawberries when you lick it.

Putting anything on the back of your card is a big no-no too.

At networking events and so on where I might meet a lot of people, I tend to make a note on the back of the card to remind me who it is and why I took their card, ie: “bald bloke from Manchester with the funny nose, interested in integrating their software with KashFlow”. I know I’m not alone in this.

I’ve lost track of the number of times I’ve struggled to find a space to write anything on a card.

So please, keep your business cards simple. Don’t end up like this man:

Most books on marketing and branding  will tell you that you need to “position” a product and you should avoid associating the product with anything that conflicts with that brand positioning. (At least, I’m assuming they do. I don’t think I’ve read any!).

For example, Pot Noodle position themselves as the irreverent antidote to all the healthy options. A marketing manager at Ikea would perhaps say they are all about affordable style.

I was hit over the head by a positioning contradiction this weekend whilst out with the family in sunny Southend.

We stopped for an ice-cream (Mint choc chip and black cherry if you must know – they didn’t have any Tutti Frutti) and we all had the obligatory flake stuck in the top. Because that’s what flakes are for – putting in an ice-cream that’s on a hot summer day. Right?

Well not if you remember the series of “crumbliest flakiest” adverts, like the one  starring an attractive young lady in the bath. The word “phallic” springs to mind. These squarely positioned it as a sexy chocolate for grown ups. You can’t get much further away from it being a chocolate you plonk in an ice cream on family outings.

Are there any other products that successfully manage to position themselves in two such contrasting ways?

<gratuitous plug> John Stokdyk, Technology Editor at accountingweb, has commented in the past that KashFlow is the punk rocker of the accounting software world whilst also having the conservative respectability of having Lord Young as our Chairman</gratuitous plug>

Writing this blog post got me wondering where the name “99″ for a flake in an ice-cream came from. The Wikipedia page offers a number of entertaining possible explanations. But the highlight of the page for me was the quote from Eastenders: “get off my 99, you flake stealing nonce!”

I’m going to post this blog on Twitter first with the original title, and then again with the quote above as the title. I’m betting the second gets lots more clickthroughs. I’ll update this page with the results.

Update:  When touted on Twitter with “Get Off My 99, You Flake Stealing Nonce” as the title, it got 20% more clicks than when using “The Chocolate With a Personality Disorder”

There’s no shortage of web pages telling you how Twitter can generate you thousands of sales leads while you sleep.

This isn’t one of them.

However, I do want to share an incident that opened my eyes to how Twitter can be used to help you close sales.

What we’re selling

We sell easy to use accounting software direct to small businesses. As it’s relatively low-cost and there’s no tie in, it’s not cost effective to undertake any direct selling. We do however sell another product direct to accountants. There’s a free 30 day trial so it’s a relatively long sales cycle.

Closing

I think timing is important to closing a sale. If you can interact with a potential customer at a point where they’re feeling good about your product then it’ll increase your chances of closing that sale. If you can get them when they’re not rushed off their feet, then even better.

My Twitter Setup

If you use Twitter and only access it via the Twitter website then you’re only seeing a fraction of what it can do for you.You should use a tool like Tweetdeck.
I have Tweetdeck set up to alert me whenever anyone in the Twitterverse mentions certain keywords, “KashFlow” being one of them.

How Twitter Helped

So when accountant and fellow twitterer Will Farnell posted:

Another 2 Positive client meetings mean Kashflow Online Bookkeeping seems the way to go, another proactive service offering to our clients

I knew about it in seconds.

I ignored the effect on my blood pressure from the lower-case F in “Kashflow” and took a quick look at our CRM. I could see he’s currently trialing the accountants software and my colleague Michelle is looking after him. So I let her know what he’d just said, she picks up the phone, he picks up his credit card and everyone is happy.

Thanks to Twitter, Michelle got to speak to Will at a time when he was feeling positive about our offering (as the tweet shows) and  when he wasn’t rushed off his feet (as he had time to post on Twitter).

I don’t doubt that Will would have bought our product of his  own volition eventually anyway (most accountants do after taking the free trial), but from my perspective, the sooner leads can be converted into sales, the better.

And also the sooner Will can make Twitter posts like this:

Six clients switching to KashFlow from “Big Name” software, a good couple of days work, clients astonished by the simplicity

You’ll notice the correct capitalisation of the F.

So whilst admittedly this was a bit of a fluke, it came about because I was monitoring Twitter for certain keywords. You can do the same or, if you want to be a real stalker, you can monitor specific people you are working with to see what they’re up to to calculate when to call them to progress the sale.

Where to now?

If you’re a small business owner, perhaps one of our thousands of existing customers, and want a web-savvy, dynamic accountant then check out Farnell Clarke. Mention this blog and Will might even cut you a deal on the KashFlow subscription price : ) 

If you’re an accountant wanting to know more about Twitter from your perspective, then read Mark Lee’s Twitter for accountants blog posts.

If you’re an accountant wanting to be able to provide a web-based accounting application to your clients whist having greater control and oversight of ther books, request a demo.

It seems we have a new product integrated with KashFlow virtually every day.

The latest is easywebstore, a hosted ecommerce platform. To incentivise our existing customers to take up their software they are offering a 50% reduction on their setup cost.

And of course we want existing easywebstore customers to become KashFlow customers so we’ve also arranged an attractive offer for them.

This type of cross marketing works brilliantly for small companies like ours that don’t have huge marketing budgets to play with. There’s a fairly small time cost to get the products integrated via our API but other than that, there’s virtually no cost to either party. Certainly we’re not paying easywebstore to promote us, nor are they paying us to promote them.

It also makes both products more attractive. Potential easywebstore customers are now more likely to buy if they see it can do most if the accounting work for them. And likewise potential KashFlow customers may be more likely to buy if they see that they can also get an integrated (and discounted) ecommerce system.

Sure, sometimes it may not work as well as expected and the number of new customers picked up from the arrangement is relatively low. But no money has been wasted so it’s not a big deal. 

Other times it can go the other way and end up generating many more cross-sales than expected. I’m sure the guys at WorkflowMax wont mind me telling you they were kept busy for days dealing with the huge influx of KashFlow customers who wanted to use their excellent project management software.

So you wont be surprised when I tell you we have loads more integration announcements on the horizon. Watch this space!

According to IDC, The harsh economic climate and worldwide recession are going to to accelerate the adoption of software as a service (SaaS) 

Their press release says:

Recent IDC surveys and customer interviews support the finding that the harsh economic climate will actually accelerate the growth prospects for the software as a service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications. Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams. As such, IDC has increased its SaaS growth projection for 2009 from 36% growth to 42% growth over 2008.

To anyone that’s established in the industry, it’s probably not much of a surprise. Whilst everything around us apparently crumbles, we’re sitting here trying not to look too smug whilst we wave the new customers through the door.

The reasons are pretty obvious: Spend a few hundred pounds on some software that will need upgrading and have additional support costs, or just spend £15.99 a month.

In the current climate (anyone else getting sick of that phrase?), small businesses are looking closer at their costs, and no-brainers like this are the first to get dealt with.

It’s worth noting, I think, that it was in the previous economic downturn that SalesForce.com really got it’s footing.

The figures in the IDC report relate specifically to the US, not the UK.

In search of UK specific numbers I turned up Hosted-applications usage on the rise (March 2008) which says

Large enterprise adoption of software as a service has increased by a third over the last year, according to analysts at Forrester Research

and Developers Expect SaaS Boom (Jan 2009):

More than half of software developers worldwide expect to work on internet-hosted applications during 2009, confirming the success of software-as-a-service, according to a survey from Evans Data.

Both are interesting reads, but none give the hard facts I’d like to know about SaaS adoption in the UK. So we’re left with anecdotal evidence. If my Google Alerts are anything to go buy, it seems SaaS is getting bigger, quicker in the US than it is here.

I’ve heard on the grapevine that a lot of the newer SaaS vendors (especially the non-British ones) are having a hard time getting any traction here in the UK. Is it because they’re not yet up to speed in marketing to a foreign audience or is it that  the reserved Brits are resistant to SaaS?

We’ve managed to do quite well over the past few years. The Software Satisfaction Awards Survey showed us with 70% of the vote for the web-based software category. Whether that means we have a 70% market share or not is debatable, but it certainly says we have a big chunk of the UK market.

I was discussing this with one of my colleagues last night over a bottle (or two) of the good stuff. We posed the following question: if we went in for a day as consultants to one of these firms that are struggling, what advice would we give them so that they could emulate the success we’ve had?

After much thought, I suggested “Be luckier”. A lot of what we’ve achieved, I think, is down to being in the right place at the right time with the right solution – pure good fortune.

Realising that our fledgling consultancy business wasn’t off to a very good start we opened another bottle and tried to think of something more useful to tell our imaginary clients. The only thing of any value that we could come up with was to not sell what you’re doing as Software-as-a-service. 

Look at our homepage – the fact it’s web-based isn’t mentioned. It’s certainly not prominent. We sell on the fact that it’s incredibly easy to use. The fact that it’s web-based is incidental. The people using our software aren’t “early adopters”, or they at least wouldn’t see themselves that way. They just want a bit of kit that’s easy to use.

Small businesses in the UK aren’t embracing SaaS, as a concept, as quickly as their American cousins seem to be. If they did then I think it’d go a small way to getting us out of the “current climate” a bit quicker.