market a Product

“It’s not advertising, stupid”

Great startup marketers are great at launching products with limited funds. They create buzz not by aggressive advertising, renting billboards, or flooding the airwaves with radio spots, but by inventing and doing marketing events. Put your creative thinking cap on! Get experiential! Create memorable experiences that people can take home with them! 

For years we have taught introductory marketing courses to many different students at many different universities. Through all the differences from person to person and from school to school, there is one great constant; new marketing students want to believe every marketing problem can be solved either by doing more advertising or by charging a lower price. To a novice, every marketing problem has an easy solution. Successfully launch a new product - more advertising, lower price. Improve sales of a failing product - more advertising, lower price. Deflect the attack of a competitive product - more advertising, lower price. Build brand equity and accelerate repeat sales - more advertising, lower price.

Fighting in the trenches of a new business, however, startup marketers soon discover that high-cost advertising and price cuts are not the panaceas that novices wished they would be. First and foremost, both are too expensive for cash-starved entrepreneurs. In the case of advertising, today’s media channels are so fragmented it is difficult for advertisers to reach potential customers cost-efficiently. 

Just spending a lot of money and reaching a lot of people doesn’t add up to a lot of anything for most entrepreneurial products. With bad advertising, advertisers are talking, but not necessarily saying anything. A case in point: is Super Bowl XXIV, the so-called dot-com bowl, which will be forever remembered more for the dot-com advertising excesses and failures than the two football teams that played. On that Sunday, a dozen or so Internet startups spent over $40 million to air a total of 10 minutes of advertisements. And that $40 million amount only covered the media buy. Millions more were spent to produce the spots. In spite of their large ad-spend, most of the startups were quickly dead and gone. The dot-com entrepreneurs apparently fell into the Marketing 101 mind trap, falsely believing that big advertising can easily solve all the big marketing problems. Just think about it. Did you see any television advertising last week? How many ads do you remember? Of those, how many advertisers do you remember? In modern America, it takes tens of millions, even hundreds of millions of television dollars to burn an advertising message into the public consciousness. As marketers, we hate to admit it, but most paid advertising is often really, really ineffective. Advertising is at its strongest when reassuring people about purchases they have already made or passing on some good news about awards, accomplishments, or fun events. Advertising is at its weakest when attempting to persuade people to purchase new products. 

An Act of Congress

In 1970, Congress passed a law banning television and radio advertising of tobacco products. Congress believed that stopping advertising was the key to stopping teen smoking. They were thinking, “If we want to destroy new sales and cause product failure, squelch all advertising” - that same old Marketing 101 mind trap with a twist. Unfortunately, the advertising ban on tobacco hasn’t worked out for Congress or the American people. According to the CDC, every day in the US, more than 3,000 young people become regular smokers. That adds up to more than a million new smokers a year. To add to that, teen smoking rates have increased each year for the last 10 years. Congress is left to wonder, “How can the tobacco industry have all of this success without the powerful aid of television and radio advertising?” 

Congress forced Big Tobacco away from Big Advertising to a much less expensive and much more effective marketing tactic - the marketing event. After the ban, it wasn’t long before wildly successful marketing events like Marlboro Country Nights were attracting teens by the thousands to hear their favorite country-western acts and to learn directly from their friends the social benefits of smoking. Dreaming up a successful marketing event takes a lot more time, energy, and creativity then just handing over big bucks to a big-name advertising agency. But time, energy, and creativity are exactly what startup marketers have to offer. Entrepreneurs and marketing events appear to be a match made in marketing heaven. 

As the costs to launch a new brand go up and up, even large companies are getting more entrepreneurial. In cooperation with the House of Blues, Honda Motors sponsored “Fit in the House” music concerts from San Diego, California to Atlantic City, New Jersey. As part of the event, a Fit Custom Art Car, painted by House of Blues folk artist Jack Poppitz, was auctioned off. Proceeds went to the House of Blues Foundation, which encourages music and art in schools and local communities. For each concert, the Fit was featured prominently in front of the House of Blues venue with colorful, brand-themed lanterns posted on either side of the vehicle. Honda took the vehicle directly to the young, hip crowd they believed were most likely to buy it. Potential customers saw the car, sat in the car, and learned that the Fit was hip. 

Even television shows have found that they need to use something in addition to traditional television advertising to promote their programming. On the day of the premiere of VH1’s “I Love the 90s,” over 50 models danced through the streets of Manhattan dressed like 90s celebrities such as former president Bill Clinton, presidential intern Monica Lewinsky, rapper MC Hammer, Baywatch icon Pamela Anderson, and other crowd-pleasers. The look-alikes did the Macarena in high-traffic areas including Times Square and Grand Central Station, giving away stickers encouraging everyone to tune in for VH1’s new 90s series. In recent years we also have seen television producers and sponsors embed marketing events into television programs as part of the storyline to generate interest in the program as well as new products. 

Procter & Gamble achieved the highest online interest in a new product launch in their history when they sponsored an episode of the reality TV program The Apprentice. The episode featured two teams of businesspeople competing to stage the best marketing event to launch a new flavor of Crest toothpaste. Building on the idea, program viewers were encouraged to enter an essay contest to describe in 100 words or less how they would have promoted the new toothpaste flavor. The P&G website received 100 essays a minute in the first 20 minutes after the show ended. In total, over 20,000 applicants participated in the contest. The website received over 4.7 million product-related hits and 40,000 samples of mint vanilla Crest were requested.

Entrepreneurial companies also have run across some great ideas for marketing events. In many ways, entrepreneurs have more freedom than large companies to do something unique and creative. A local roller coaster designer and amusement ride manufacturer sent their marketing director out on a road trip to amusement parks across the country driving a VW Bug he personally purchased and modified to mimic the look and feel of the amusement park ride he was promoting. The event stirred up a lot of interest among park patrons, which in turn sparked interest in the new ride from park operators and owners. 

5 Rules for Marketing Events

Every year, Promo Magazine recognizes the best of the best promotions and marketing events. Several years ago, Cadillac won the top award for its “Cadillac Under 5” promotion, in which contestants made five-second films to spotlight the new car’s power. The contest drew 2,648 entries, drove site traffic up by 358% with one million new visitors, and delivered nearly 45,000 incremental requests for dealer information. As we look over the winners from year to year, we look for recurring themes. What does it take to make a winner? Below we list five “secret sauce” rules for dreaming up successful promotions and marketing events. 

1. Make sure the distinctive product feature takes center stage in the event. From what we’ve observed, promotions are judged on short-term results, but goodness also can be judged on strategic impact. For example, the Promo Magazine judges particularly liked that the “Cadillac Under 5” promotion directly sold the premise of the car. The power and speed of the vehicle took center stage in creating excitement and were not peripheral to the event. The key features and benefits of the new product were spotlighted.

2. Make it gorgeous; event quality reflects on product quality. HP is another award winner with the “You + HP Experience” interactive tour. It consisted of a modular structure moved from town to town like a traveling high-tech circus spotlighting over 40 products via 12 interactive concourses. Consumers photographed themselves using pop-culture backdrops, printed pictures with HP gear, and watched videos using HP digital projectors and plasma TVs. The tour attracted about one million visitors at 45 events spread across the US and Canada. The judges were impressed with the professional execution and how “gorgeous” the concourses and activities looked. 

3. If at all possible, connect the event with a local cause. Events that promote a product and a popular local cause are also frequent winners. Washington Mutual used a bus to tour Los Angeles and Seattle schools to encourage parents to support their WaMoola program. WaMoola is money donated to support local schools donated from each Washington Mutual check-card transaction. Card applications jumped and card use increased by 42%.

4. Target the event to fit a specific audience and marketing objective. Another key to a successful event is careful targeting. Gatorade is an award winner for its “Gatorade High School Athlete Award Program.” In this promotion, high school coaches registered for an awards kit to honor their top athletes. The judges were impressed because it was simple for the coaches, but more importantly because it “targeted coaches by sport, by boys or girls, and by past participation.” Gatorade’s targeted approach achieved a 30% response rate with over 50% of the active coaches re-enrolling. 

5. If appropriate, send home a personalized souvenir to drive home a living, breathing brand experience. Consider the experiential marketing event orchestrated by Polaroid and Jelly Bellies. Jelly Belly launched a national road tour and as the tour visited popular shopping and other high-traffic areas throughout the US, consumers sampled old and new flavors of Jelly Bellies. Next, personalized photos of family and friends were shot using Polaroid film with a pre-exposed border featuring the Jelly Belly logo. The souvenir and the happy memories of the Jelly Belly tasting experience then returned home to be posted on the kitchen refrigerator. In total, about 20,000 free photos went home during the 150-city tour, increasing top-of-mind awareness and brand loyalty, and making sweet increases in Jelly Belly sales. Promo Magazine judges were very impressed with the Jelly Belly logo photo that allowed consumers to take something home even though the product itself was consumed. The Jelly Belly eating experience doesn’t leave anything other than some pleasant memories. The souvenir put a personalized, long-term Jelly Belly reminder in the home.

Empower the Love Group

If you want new customers to feel the excitement of your new product, empower your best customers to help launch it with you. Sponsor your own events and generate Love Fest buzz. Putting together a successful Love Fest is a two-step process. Step One: Create opportunities for your best customers to “share the love” they have for your products and services. Step Two: Get out of the way and let your customers sell for you. Startups need to orchestrate ways for their evangelists to spread the message of love, that is, the good news about their favorite company and products. The ultimate high-credibility information source is customer talking to customer or customer talking to new prospect. A Love Fest leverages “customer love” so that current customers buy more from you and pre-sell more of your products to new customers. 

So, how do you create these Love Fests among your customers and prospective customers? Love Fests can be leading-edge conferences, summits, events, blogs, clubs, community classes, or any other activities that bring your current customers and prospective customers together. The goal is to get your customers together, in person or in virtual space, to learn, share, enjoy, and celebrate their personal connections to your company and products. Owner groups provide a forum for customers to exchange ideas and educate each other about the important benefits of product ownership as well as product uses, usage situations, and complementary products. The idea is to get customers celebrating the brand together. A Love Fest of owners creates increased interest in the product, generates useful ideas for the company, earns more sales from customers, and promotes interest and sales among non-customers. As an example, let’s consider the Harley Owners Group, aka H.O.G. Who has more love than H.O.G. members? In 1983, Harley-Davidson formed H.O.G. “to enhance the Harley-Davidson lifestyle experience, and to bring the company closer to its customers.” And bring customers together, in a Love Fest way, they did. Today more than a million people around the world pride themselves as H.O.G. members. Wouldn’t you love to have a million customers selling for you? And what do they sell? They sell the Harley-Davidson dream and making it a way of life. Could you ask for more? One million Harley-Davidson owners, selling their friends, neighbors, and relatives on the Harley-Davidson dream. And they sell themselves on group events such as rides, open houses, pin stops, pit stops, and of course, products. Company managers estimate that an active H.O.G. member annually generates more than $5 thousand, while even an inactive member annually generates more than $4 thousand. Membership is a roaring success for Harley-Davidson. 

Expos and Conferences

For Apple lovers, users, and all-out devotees, Macworld hosts the ultimate Love Fest with expos, conferences, trade shows, a magazine, and a website. If you want to celebrate everything Apple, Macworld provides the venues. This shared love for Apple generates significant buzz among Apple’s brand champions. Many of them become so connected to the brand they begin to act like latter-day evangelists, preaching the good news about Apple to their co-workers, friends, and each other. The Apple Love Fest represents a significant force in Apple’s marketing efforts. Imagine having thousands of Love Group customers extolling the virtues of your product to the market and selling your product. And this is highly effective voice-of-the-customer selling, not megabuck paid advertising available to only deep-pocket corporations. 

Classes and Contests

Only several years ago, Lance Anderson started Rusty Pickle, a creator and distributor of papers, binders, stickers, die cuts, transparencies, albums, ribbons, and other materials for scrapbook companies and scrapbook enthusiasts. The company tagline is “Adding texture and dimension to scrapbooking!” But this is not all. The company also adds texture and dimension to retail stores and customers by providing classes, contests, and even a blog. Teaching scrapbook classes at retailers and shows from coast to coast is a core activity for Rusty Pickle. Almost weekly, company representatives are on the road teaching scrapbook aficionados, experts, and beginners the art and love of scrapbooking. Of course, retailers love these classes because they generate a Love Fest buzz about scrapbooks, which means more sales for the retailer. And customers love sharing ideas and learning about new products with other experts as well as with beginners. The Love Fest buzz then takes on a life outside the classes as customers show off their newly acquired scrapbooking skills to family and friends. 

Love-Blogging

And then there is the Rusty Pickle blog. This virtual venue creates a Love Fest forum for customers and scrapbook junkies to learn and to share the love of scrapbooking. Here are just a few voice-of-the-customer comments from the Rusty Pickle blog. Can you feel the love? Wouldn’t you love to have a Libby M. introduce your products to new customers? 

“You guys have the best things!!!” 

“WOW!! WOW!! WOW!! Another acrylic album. What does a girl have to do to get her hands on one of those?????!!!! I started to put together one of your kits the other night and oh my, so fun! I can’t wait to get some of this great new stuff!”

“Simply . . . I *heart* Rusty Pickle! :)”

“I was recently introduced to Rusty Pickle by Libby M! I am drooling over the Picklicious Line!!!”

Club Fest

Building a club is another way to launch with a Love Fest. Are you a connoisseur of fine chocolate, microbrews, power ties, or taste-kicking hot sauce? If so, you will want to join an online club where experts send you the newest product every month! A uniquely fun and effective Love Fest used by entrepreneurs is to start a club or community where product users can be united with a common set of interests and focus. Entrepreneurs that organize clubs find an easy way to generate continuing revenue. 

Love Group customers are eager to participate in automatic monthly purchases just to be the first to try and comment on the latest and greatest flavor, color, or product improvement. Some people, for example, those buying ties, don’t want to bother taking the time and energy to go to a retail store and shop on their own. Why not let tie experts pick out the power tie of the month and send it directly to you? Customers who join clubs love to share their knowledge and expertise with anyone who will read or listen. Make it happen for your product and organize a club for your customer community!

Lessons from Edison

Product demonstrations generate a lot of energy and interest. When done well, they also can lead to purchases. To build a market for Little Giant ladders, the founder Hal Wing would climb on top of his ladder at State Fairs and yodel while his wife took orders from onlookers. Use demonstrations to show functionality and immediate results. Thomas Edison is one of the all-time greatest entrepreneurs. Edison invented the light bulb, right? Actually, wrong: Edison did not invent the light bulb, but was the first to successfully commercialize the light bulb. Edison knew all about Entrepreneurial R&D. He borrowed and improved upon the ideas of at least a couple of innovators; the scientist Humphry Davy, who made the first light bulb in 1800, and the physicist Sir Joseph Wilson Swan, who in 1860 invented the carbon filament. To successfully commercialize the light bulb, Edison bought the patents from its inventors, discovered how to make a bulb burn for more than 1,500 hours, and then discovered how to get people excited about it. 

Edison was an expert at making compelling product demonstrations. On New Year’s Eve, he arranged for a public demonstration of his incandescent lights. Interested and influential spectators arrived on special trains from New York City to view the Menlo Park laboratory, grounds, and an adjacent boarding house glowing with 100 electric light bulbs. After conquering the light bulb, Edison marched forward to fight the electricity war to decide whether direct current (DC) electricity or alternating current (AC) electricity would be used in our homes and businesses. Edison represented DC and his rival Nikola Tesla, with the financial backing of George Westinghouse, represented AC. Edison believed his best chance to win the electricity war was to convince the public that AC was too dangerous to have in their homes. His main weapon in the fight was making public demonstrations of AC’s lethal power. An Edison employee staged numerous events for reporters in which dogs and cats were “Westinghoused” to death with AC electricity. The biggest demonstration, however, was the electrocution of the ill-tempered, man-killing Coney Island elephant Topsy, which was witnessed by more than 1,500 reporters and interested bystanders. The papers reported that cyanide couldn’t kill the elephant, but Westinghouse electricity could. 

Edison also maneuvered to have AC used in the first electric chairs and released his own film to the movie houses of the day entitled Electrocution of Czolgosz; a detailed reenactment of the electrocution of President McKinley’s assassin. The film shows the prison the morning of the execution, the corridor leading up to murderer’s row, Czolgosz walking to the death chamber as the final tests of the electric chair are being made, Czolgosz being strapped to the chair, his body violently jerking as the electricity passes through his body, and finally, the coroner pronouncing him dead. Edison’s demonstrations were so successful that Tesla, determined not to be beat, was forced into making a daring demonstration of his own. In addition to charging only one-half of what Edison asked for lighting the Chicago Exposition of 1893, Tesla invited the public and reporters to watch as he gripped wires in his hands and let AC electricity pass through his body to power a light bulb. Apparently, one good demonstration can only be outdone by a better one. In the end, Tesla lost a few “compelling demonstration” battles, but ultimately won the “compelling demonstration” war because of his daring man-as-a-wire Chicago Exposition event and of course the fact that his brand of electricity was the most practical to transport over long distances. Even Edison later admitted that from the beginning he knew that AC electricity was the best. 

Active vs. Passive Demonstrations

Active demonstrations are better than passive demonstrations. Seeing may be believing, but doing is understanding! Product demonstrations will work and should be part of every entrepreneur’s product-launch toolkit. We are not talking about simple variants of food sampling that everyone sees in grocery stores. We are referring to full-out demonstrations of even pricey items in which people have a chance to handle the product and experience its benefits firsthand. 

We have said this before, but it bears repeating. People want proof, not puffery, and this is particularly true for startups and entrepreneurs. Generations of fast-talking salespeople and over-the-top advertising have made the public skeptical of product claims, and each new generation seems to be more skeptical than the last. Growing skepticism and boredom with sales pitches unfortunately means that not all demonstrations will be equally good. In today’s world, demonstrations almost always must be active in order to be effective. There is a big difference between active and passive demonstrations. Passive demonstrations are like boring classroom lectures. Active demonstrations get people doing rather than just watching. Active demonstrations give people hands-on experience. Great demonstrations are just like great games: everyone wants a chance to play. Developing a great game takes some creativity and ingenuity, but not great sums of money. 

DuPont Stainmaster developed one of the best demonstration games of recent history. Consumers walking into carpet stores were led by retailers to a kiosk where they could soak light-colored swatches of Stainmaster carpet in their favorite stains, then wash out the stain completely in seconds using a simple solution of soap and water. If you’ve never seen it, believe us when we say it is a very convincing demonstration. Upon its introduction, Stainmaster became the sales leader and is still the reigning carpet sales champion. The phenomenal commercial success of Stainmaster resulted from a carefully orchestrated plan of product innovation, branding, performance guarantee, memorable advertising, and learn-by-doing demonstration. Every part of the program was important, but product insiders will tell you that the demonstration kiosk was the key for making product sales. 

What to Demonstrate

Effective demonstrations do a lot more than just demonstrate what the product does. In the case of Stainmaster, the demonstration showed off the carpet’s “relative advantage” over other carpets. Relative advantage, however, is something that goes above and beyond a product benefit. Is this starting to sound complicated? It isn’t really. It turns out that there is a theory about all of this. Just as a reminder, Everett Rogers researched the spread of new ideas and products through society. In his research he identified five kinds of people he called innovators, early adopters, early majority, late majority, and laggards. Depending on the sort of person you are, you will be more or less likely to be the first on your block to buy a new, innovative product. His research also identified five things that will speed everyone, even laggards, to more readily adopt new products. These are (1) relative advantage, (2) compatibility, (3) complexity, (4) trialability, and (5) observability.

When developing an active demonstration, we want to hit as many of these quick-acceptance hot-buttons as possible. Relative advantage means the new product is much better than the old product it replaces. Compatibility means that the new product fits in with the typical way we go about doing things. Humans are creatures of habit. Demonstrations should show that people don’t need to radically change their day-to-day behaviors to get the most out of a new product. Complexity really should be called anti-complexity, because it is the degree to which a new product is easy for people to understand and use. Trialability refers to how accessible a product is for hands-on trial and experimentation. Observability is the degree to which we can observe others using and enjoying the new product. 

With these concepts in hand, it is interesting to review the Stainmaster experience. The Stainmaster kiosk was set up to highlight relative advantage by providing red cough syrup as the benchmark stain. Carpet buyers knew a tough stain when they saw it, and they knew how impossible it would be to remove from their own carpeting. With Stainmaster, the red cough syrup stain washed clean again and again using only simple soap and water. No need for fancy cleaners, processes, or chemicals; nothing could be simpler than soap and water. The Stainmaster in-store demonstration spotlighted relative advantage, compatibility, anti-complexity, and trialability. One could even say that the DuPont kiosk incorporated observability when interested carpet buyers watched as others stained then washed bits of Stainmaster before taking their own turn! One can only imagine as the next buyer in line would walk up to the kiosk and try twice as hard as the previous customer to stain the carpet, and the look of shock and excitement when they couldn’t. DuPont could have taken a different approach to product demonstration. Instead of providing a kiosk demonstration center, company managers could have asked retailers to hand out samples of Stainmaster and a set of instructions for prospective carpet buyers to take home and try out on their own. Perhaps they could have played in-store videos. While much cheaper and perhaps easier to implement, these approaches would have been a lot less fun and dramatic. They would have been more passive than active. 

Not every product demonstration can bring together each element identified by Everett Rogers in his book about diffusion of innovation. For startup marketers, however, there are three must-haves to include. Research shows that, in general, relative advantage and compatibility are the two most important factors energizing new product acceptance. Looking at years of data spanning dozens of industries and product categories, it is clear that success often comes to those new products that are superior to their predecessors and mesh closely with rather than awkwardly interrupt our way of life. Finally, because we know doing is more powerful than watching, we also recommend that every active demonstration include an element of hands-on trialability. If you own a camera shop and sell digital cameras, let prospective customers take a few pictures of the salespeople and experience the technological miracle for themselves. If you invent a product to keep hands dry, take it to a golf course on a hot and humid day and let golfers experience how much better they can hold on to their slippery grips. The possibilities are endless. Just make sure after making your fantastic demonstration that you give people an opportunity to buy, because they will want to, and you can’t let that special moment pass! 

Trent Kimball the CEO of TAC Armored Cars says it best, “Life is valuable, protect it.” As a company, that’s a slogan that each employee takes to heart from our front office, to our welding and trim shops, protecting life is a concept that our entire staff embraces.  It’s the primary reason we exist, and our purpose is to protect people throughout the world by supplying quality lightweight armored vehicles. Trent believes in making compelling demonstrations. In a sales video he personally sits behind a bulletproof glass and allows one of his employees to shoot him. Trent says the demonstration has helped his business grow and given the business a ton of publicity. Trent also participated in a reality show focusing on his business to be produced by The Learning Channel. The pilot for the show didn’t take off, but again gave him a lot of press. It highlights him blowing up things and being like a real-to-life James Bond. 

Hard-to-Demonstrate Products

Terra Nova Biosystems sells a pollution-eating technology that cleans badly-polluted soil. The product couldn’t get traction with investors or users until Terra Nova founders came up with a way of demonstrating the benefit. Since then, they have attracted a lot of attention and have funded rapid growth. Now they demonstrate the benefit by first showing detailed pictures of an untreated site and then by eating a pinch of purified dirt from the site once it is treated with their system. Eating the treated soil made the benefit tangible.

Demonstrations afford startup marketers an opportunity to add tangibility to otherwise intangible benefits. To communicate quality and professionalism, top-tier accounting firms deliver their high-priced audit reports in leather-bound portfolios. To communicate friendly service, McDonald’s cashiers are trained to look directly at patrons and smile. To communicate thoroughness, marketing research reports are measured by the inch and pound or by the extensiveness of their web interface. BMW uses PhDs to help engineer every sound generated by their vehicles to communicate luxury rather than just annoying. Real estate agents stage expensive homes with upscale furniture, fine artwork, and scented candles. Las Vegas slot machines explode like rockets when there is a winner. Lights flash, sirens blare, and coins clank into metal trays so that everyone in the casino knows it pays to play. Great marketing makes the intangible, tangible! It makes the unnoticed impossible to miss. It assumes people will not figure out and remember a benefit unless it is experienced as a sight, sound, texture, smell, or taste. 

Don’t Lie with Statistics

Mark Twain is quoted as saying, “there are liars, damn liars, and statisticians.” Support product claims in product demonstrations with facts and figures, but make sure the facts and figures are accurate and really do support your claims. Recently we listened to a team pitching the idea of a Renaissance Fair complete with medieval village, jousting knights, wandering minstrels, tart-selling wenches, newly-planted forest, and manmade lake. The entrepreneurs were asking for millions of investment dollars. To show their idea had merit, they presented some quantifiable support in the form of a marketing research study. Unfortunately, the quantifiable support fell short and undermined any credibility the business team might have had. Their research study concluded that a majority of families in the local area favored more family entertainment options and pointed out that the area is one of the few in the geographic region without a Renaissance Fair. Missing from the study, however, were any facts and figures to show that families in the area had a keen interest in Renaissance Fairs, hard numbers to show how many people needed to attend each day for the enterprise to break even, estimates for the costs associated with attracting new and repeat customers, or a plan to start small and grow into a bigger operation as the number of patrons expanded.

Quantifiable facts and figures are easy to think up and some well-known companies do a very good job at it. McDonalds is popular - Over a billion served. Baskin Robbins has great-tasting variety - 31 flavors. Ivory Soap is the epitome of clean - 99.44% pure. Juicy Juice is good for kids - 100% juice for 100% kids. Products MUST deliver on claims. Trumped-up promises and fabricated sales pitches and demonstrations won’t fly in an info-tech world of instant information access, online reviews, social media, and special interest blogs.

Products Need Personalities

A brand is like a personality. It is multidimensional. It has name, like Nike. Often it has a distinctive logo, like the Nike Swoosh; and an advertising slogan, like “Just do it.” Sometimes it may have distinctive packaging, like a Coca-Cola bottle which was designed to be recognizable as a Coca-Cola bottle even if it were broken into several pieces. People consider brands much more personally relevant than mere products. Brands make buying decisions easier. Brands stand for consistent quality, create expectations of thoughtful customer service, and help people communicate to others something about themselves. One entrepreneur told us that after making his first million dollars he immediately rushed out and bought a luxury Mercedes automobile because he wanted everyone to know he was successful without having to say it himself. When someone buys a favorite brand, they are anticipating a well-defined consumption experience. 

Branding changes and elevates the focus of many startup marketers. Brands say “join me” where in the past many marketing campaigns have simply said “buy me.” Reframing the marketing imperative from “buy me” to join me,” begs us to market products through the eyes of brand champions. And there are big dividends when we do. Cinnamon Toast Crunch is a “guilty pleasure” ready-to-eat cereal covered in cinnamon and sugar. In today’s hyper-health-conscious world, one would hardly imagine that it could be one of General Mills’ best-selling brands. Cinnamon Toast Crunch can’t “fix” itself to fit in with health trends, so marketing managers decided to look at the cereal through the eyes of brand champions and feature the sticky cinnamon and sugar coating that brand champions loved to lick off the cereal squares and their fingers. The wildly successful campaign says “join me” in “craving those crazy squares” and shows cannibalistic squares of Cinnamon Toast Crunch licking and devouring each other. Brand champions often love their favorite brands to the extreme. Marketers interested in saying “join me” can’t shy away from being extreme, perhaps brash, when talking about the brand. We remember brands that dare to stand out. For example, BMW’s “The ultimate driving machine,” Geico’s “Fifteen minutes could save you 15% or more,” and Wheaties’ “Breakfast of champions” are among the brashest, yet most memorable catchphrases ever written.

Try Sticky Branding

In our experience, a great brand name can be a significant awareness-builder and buzz-creator when launching new products. We have also observed that not all brand names are great. When thinking about brand names, we have developed our own unique way of sorting out winners and losers. Backed with the clout of enough money, any brand name can be made memorable. But true winners stick with us and generate word-of-mouth without having to be pounded in with millions of advertising dollars.

Great brand names like Haagen-Dazs are invented, not borrowed. In addition, such brand names evoke strong emotion and spark personal connections that endure year in and year out. Haagen-Dazs is an invented word, yet it has a rich and sophisticated European ring to it. Because it is invented there are no conflicts with existing trademarks or brand names. Because it is invented the brand name does not carry any negative baggage and only conveys the positive emotion-rich meaning we want. 

Good brand names like Stainmaster are engineered from existing words. It is not invented, but can’t be found in the dictionary either. These brand names perhaps don’t create as strong of an emotional connection as Haagen-Dazs, but are very clear on the functional benefit. In the case of Stainmaster Carpet it is carpeting that masters stains, and so on for brands such as Energizer Batteries, Pizza Hut, Dunkin’ Donuts, and Rice Crispies Cereal. Brand names using acronyms such as IBM, UPS, AT&T as well as brand names using personal names such as Honda, Howard Miller, and Pulte are challenging because, on their own, these brand names do not convey any particular meaning. On the other hand, with enough Big Business money they certainly can be good brand names.

Stinkin’ Brand Names

The worst brand names have a dark magic all of their own. They evoke negative thoughts and can result in failed products. For example, iSmell, an unsuccessful personal scent synthesizer for Internet odors evokes thoughts of personal body odor; Arch Deluxe, an unsuccessful grownup hamburger from McDonald’s evokes thoughts of something sinister; Ben-Gay Aspirin, an unsuccessful analgesic pill evokes thoughts of swallowing smelly Ben-Gay cream rub.

The list of bad brand names goes on; Cocaine Energy Drink, Colgate Kitchen Entrees, Frito Lay Lemonade, and Harley-Davidson Perfume are also in the stinker-brand-name hall-of-fame. Brand names may not make a successful product, but they can kill a product. Test brand names for likability, memorability, and meaning. People may not pay more for a great brand name, but they may just try it once or twice to see if they like it. 

Marketing Slogans

Don’t underestimate the power of a catchphrase, tagline, or slogan. A few carefully selected and memorable words can make a big impact when building a brand. A great catchphrase keeps your brand focused and in turn focuses buyers on key benefits. “With a name like Smucker it has to be good.” “M’m! M’m! Good!” “Melts in your mouth, not in your hands.” These memorable catchphrases bring to mind focused, well-defined brands – Smucker’s Jelly, Campbell’s Soup, and M&M Candies – and focused, well-defined benefits. Because of the catchphrase, when we think about buying one of these brands we are reminded what we will be getting and why we want it!

Crafting a memorable catchphrase may be a lost art. It has been a long time since catchphrase blockbusters like “Where’s the beef?” “The real thing” and “You deserve a break today” were written for Wendy’s, Coca-Cola, and McDonald’s. Can you even remember what advertising slogans these brands use today? Most people can’t. Today we get sad catchphrases like, “If it’s not an iPhone, well it’s not an iPhone.” A recent research study conducted by Emergence, a branding firm based in Atlanta, found that fewer than half of today’s top catchphrases are known by more than five percent of consumers. Many marketers apparently have lost sight of a catchphrase’s power.

Catchphrase 101

The first lesson in Catchphrase 101 is that effective catchphrases are straightforward. They roll off the tongue with rhyme, alliteration, and the brashness of Bob Dylan poetry. Great catchphrases are like great humor; they state the obvious. But don’t be fooled. Just because great catchphrases are simple doesn’t make them simpleminded. Al Ries, author of the bestseller Positioning: The Battle for Your Mind, says that a catchphrase should “wrap the benefit with bacon.” For example, he points out that BMW automobiles own the benefit fun, energetic driving. With that as the benefit, many of us might write the catchphrase, “BMW, It’s fun to drive.” The catchphrase wins high marks for simple and direct, but doesn’t score well on the brash, “wrapping with bacon” dimension. It probably took some time for BMW marketers to arrive at “The Ultimate Driving Machine,” but the drive was really worth it. 

Don’t settle on a catchphrase that highlights something that sparks your imagination but doesn’t highlight something that directly benefits and/or sparks a personal connection with your customer. Those types of slogans fail the “simple and direct” test. They require too much mental processing for the average customer to get it. For example, Morton Salt’s “When it rains it pours,” General Electric’s “Imagination at work,” and Timex’s “Life is ticking,” express fine sentiment, but may not make a direct connection with customers who may say, “What does rain have to do with salt?” or “Does General Electric still make light bulbs?” or “When did Timex get into healthcare?” Contrast these slogans with hall-of-fame slogans like, “You’re in good hands with Allstate,” “Ace is the place with the helpful hardware man,” “Snap! Crackle! Pop! Rice Krispies,” Alka-Seltzers “Plop plop fizz fizz... oh what a relief it is!” and Federal Express, “When it absolutely, positively has to be there overnight.”

Can’t Say It, Then Sing It

You may not have a product that lends itself to a memorable, sticky brand name like Boudreaux’s Butt Paste. With a sticky brand name, once people hear it, people can’t forget it. With a sticky brand name, once people hear it, they have to know what it does and who buys it. Also, you may not have a product that lends itself to a powerful, energizing catchphrase like BMW’s “The Ultimate Driving Machine.” The powerful catchphrase stakes out a position in the car consumer’s mind that other car manufacturers can’t dislodge. On the other hand, you may have a product that lends itself to an unforgettable jingle. 

In advertising, it is often said, “If you can’t say it, then sing it.” Simple lyrics and simple music are memorable; and happy music makes for happy memories. A great jingle has the power to transform how people think about a product. The singing jingle, “Hooveround takes me where I want to go, where will it send me,” transforms a stinko motorized wheel chair into a sought-after mobility device. 

Zoobie vs. Pillow Pet

What is a Zoobie? What does its catchphrase “Play, Sleep, Love” mean? Does the brand name stick with you? Are you itching to know what the product is and who buys it? Are you energized by the catchphrase? Has “Play, Sleep, Love” burned into your brain never to be dislodged? Did either the brand name or the catchphrase call to mind a child’s plush toy that can be used as a pillow and unzips to reveal a blanket stuffed up inside. It may not be one of those products for which brand name and catchphrase can work much magic. At least that is what a competitor, Jennifer Teller, learned. When she first invented the plush toy called the Pillow Pet which folds into a pillow with the help of a Velcro strap, Jennifer tried to sell them at Christmas from a shopping mall kiosk. Kids loved them, but parents wouldn’t buy them; passing them off as just another stuffed toy. Several years later, Jennifer took the Pillow Pet to television and added a sing-along jingle. The direct-response advertising shows happy, joyfully-squealing young children hugging their Pillow Pets and singing, “It’s a pillow. It’s a pet. It’s a pillow pet.” The jingle is a miracle worker. With the help of the happy little song, parents and grand parents could understand the benefit. That year the Pillow Pet did $7 million in revenue and sales have accelerated each year after with children adding more and more Pillow Pets to their collection. In contrast to Pillow Pets, Zoobies continues to push on with a much smaller business. 

Many otherwise boring products work magic in the marketplace because of their jingles. Meow Mix is just another cat food until cats start singing, “Meow, meow, meow, meow! Meow, meow, meow, meow!” Salem was just another brand of cigarette until the jingle singers reminded smokers, “You can take Salem out of the country, but…you can’t take the country out of Salem. You can take Salem out of the country, but…” Even Coca-Cola got in on the act and in a big way with the song, “I’d like to teach the world to sing.” A hillside of multicultural singers picked up our day with, “I’d like to teach the world to sing in perfect harmony…” The song was released as a single and sold 12 million copies. It climbed the pop charts to #1 in the UK and #7 in the US. It has been called “one of the best-loved and most influential ads in TV history.” And we are sure that it sold a lot of Coca-Cola!

Unravel the Channel

Marketing channels make or break new products. Startup marketers, of course, must place new products in the hands of distributors and retailers who want to sell it. But even more important, we have to put the product where people (1) are ready to buy, (2) are able to pay, and (3) know that good alternatives are out of reach.

Del Sol color-changing vacation-themed t-shirts are best sold in resort areas. Red Bull energy drinks are best sold in convenience stores and college campuses. Expensive, beer-soaked hotdogs are best sold in ballparks.

Channels and Give-away Contests

Personal trainers are value-added services offered by many gyms around the country. Personal training services are best sold in gyms. When going to a gym, it is easy for patrons to look around and see when you are not as fit as you’d like to be. Personal training is the solution, but patrons are reluctant. A local gym recently sponsored a contest to win a free personal trainer for a year. Lots of interested but reluctant gym members entered the contest. The gym, however, added a tantalizing twist to the contest. Aside from the one grand prize winner, everyone who entered was a winner. Each member filling out an entry form was offered one free session with a personal trainer. Great idea, because winning puts people in a good mood, the good mood can be amplified by a positive “consumption experience” with the personal trainer, and the positive experience can quickly blossom into a six-month personal training contract. The gym is not doing a sneaky thing; they are doing a good thing in helping reluctant gym members get firsthand experience with the benefits of personal training. The service will help gym members build confidence and reach their fitness goals faster than if they struggled along on their own, but it is hard to see the benefit if you are just watching from the sidelines and don’t experience firsthand. 

Channels and In-Store Challenges

In Argentina air conditioners are best sold in appliance stores. But how do you get people into appliance stores to consider purchasing your air conditioners. BGH Air Conditioners built a device called a nose-o-meter. They put nose-o-meters in all of the largest appliance stores featuring their air conditioners. Attracted to the store by the challenge, customers put their heads into the huge, nose-shaped nose-o-meter. Customers with sufficiently-sized noses get 25% off the purchase of a BGH Air Conditioner. Large noses can push a button in the nose-o-meter which causes the nose-o-meter to blare “big nose - big nose – big nose” and the light on top to start flashing. Thousands of noses were put to the test. Hundreds of discounts were given to winners. The nose-o-meter became the talk of Argentina. Even Argentinean NBA star, Manu Ginobili, tweeted about the in-store campaign, the size of his nose, and the 25% discount he would win.

Channels and Addictive Samples

Want to locate a frozen yogurt store in close proximity to thousands of people wanting to reward themselves with a sweet treat? The Las Vegas Strip is the perfect location. Pinkberry recently opened a flagship store there and invited thousands to sample their frozen yogurt. Store owners know the samplers will be back during their Las Vegas vacation because most people find their style of tart frozen yogurt to be irresistibly addictive. Once you’ve located a channel where thousands of people are ready to buy and pay a premium, sampling is a great tactic if the product is right. The more irresistible the product; the more suitable it is for sampling.

Selling and Closing

For startup marketers, selling and closing are must-have skills. Experiment with different selling tactics and find the closer. Ralph Waldo Emerson said, “Build a better mousetrap and the world will beat a path to your door.” This statement is true if the world knows that you sell mousetraps, if the world knows where to find your door, if the world understands the unique benefits of your mousetraps, and if the world knows how your mousetraps solve their mice problems better than alternative solutions and at a price they are willing to pay. Without this information, knowledge, and understanding, the beaten path will miss your door completely. Unfortunately, some entrepreneurs become so focused on “building the better mousetrap” that they do not spend enough effort or resources on selling it. Selling answers the above “if” statements. Don’t ignore this important function along your way to building the better mousetrap. 

If you are to cash in on the rewards for developing a fantastic product, you must learn to close sales. An study sponsored by the Harvard Business School examined the determinants of success for entrepreneurs. The sample included 87 Harvard Business School entrepreneurs and 100 entrepreneurs from the list of “Inc. 500” companies. One of the key findings from the study and recommendations to entrepreneurs is learn to sell! “The data suggest that face-to-face selling is a crucial skill: for most ventures to have any chance of success the entrepreneur has to be able to call on a customer and secure an order for a product or service.” Calling on a customer and securing an order means selling. It means asking the right questions and listening to customers to understand their needs and wants. It means matching the benefits of your product offering to the needs and wants of the customer. It means getting commitment from the customer for the order; that is, closing the deal. It means delivering on the commitments you make. It means meeting, even exceeding, customer expectations. Successful entrepreneurs know how to sell. They know how to close. But selling for entrepreneurs is not without challenges. The Harvard research also uncovered a number of selling challenges worth noting. Here are the top three challenges along with our recommended solutions: 

Challenge #1: Entrepreneurs lack credibility, name recognition and track record.

Startup marketers don’t have the entrée that an IBM sales representative have with an MIS department. Also, prospects are likely to ask the question, “How do we know you are going to be around tomorrow?” In short, there is little or no trust. The solution is to earn credibility and establish trust. 

One historically flawed sales assumption is that people buy from those they like. They don’t. People buy from those they trust. To test this, simply look at your own experience. How many overly-friendly salespeople have you found you could trust? To build a customer base over time, a business must establish trust with its customers, who must believe the business will meet or exceed their expectations. If customers’ expectations are met or exceeded, the business grows. On the other hand, if customers’ expectations are violated, the business dies. Selling experts, Robert Miller and Stephen Heiman, suggest that credibility and trust can be gained by reputation, it can be transferred to you, and it can be earned by you. Establishing credibility by reputation is difficult for entrepreneurs because they have no track record. Temporary credibility can be transferred to you by someone else recommending you, such as an introduction, a phone call, or an email. The person recommending you can be anyone the customer trusts: respected colleagues, business associates, friends, relatives, etc. You can draw on this transferred credibility until you earn your own. Of course, the best way to gain credibility is to earn it yourself. Credibility is earned or lost with every interaction you have with a customer. 

7 Ways to Earn Credibility and Trust

Here are seven things you can do to earn credibility and trust with customers: 

1. Dress and speak the part. An old Scottish proverb counsels, “What e’er thou art, act well thy part.” The first step in acting the part is dressing the part. People judge you by your appearance. Learn the business dress of your customers. When in doubt, err on the side of dressing up. Remember, you can always dress down, but you can’t dress up. 

2. Speak the language of the customer. Speak in terms the customer understands. Often sellers become so enamored with the exciting features of their products that they forget that customers do not buy features, they buy benefits. Think of the times you’ve suffered through a salesperson’s laundry list of features not knowing why these features should be important to you. Theodore Levitt, Harvard Business School professor, said it well: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” So, speak in terms of the hole (benefits), not the drill (features). If you do mention a feature, make sure you translate it into a benefit.

3. Seek to understand. Your primary task is to understand customers’ problems and opportunities so that you can match what you have to offer with their needs and wants. Selling is not about you or about your company. It is about the customer. In the end, you want the customer to sell him/herself. Most people love to buy, but they do not like being sold to. So, help the customer buy. Ask good questions to help the customer uncover problems and opportunities.

4. Listen, listen, listen. Selling is not a standup monologue or a dog-and-pony show. It is a conversation, a dialogue - two people speaking together. And who should speak more, the buyer or the seller? If the seller’s objective is to “seek to understand,” then the buyer should talk more. The seller can encourage the buyer to talk by asking good questions and by listening attentively.

5. Set correct expectations. Much of selling is managing customers’ expectations. Don’t promise the moon, unless you are committed to delivering it! It is a good policy to under-promise and over-deliver, but over-eager salespeople often do just the opposite. Think about the times you’ve waited for a table at a restaurant. When the hostess tells you the wait is 15 minutes and then seats you in 10 minutes, you are thrilled. But when the hostess tells you the wait is 15 minutes and seats you in 20 minutes, you grumble all the way to the table. Manage customers’ expectations to fit with what the startup can reasonably deliver. Startups don’t often get a second chance to prove their competency.

6. Be responsive. A comparative advantage small startups have over larger Fortune 500 companies is the ability and willingness to respond quickly to customer requests. Tom Peters advocates “shocking levels of responsiveness, doing things in minutes and hours, which people did in weeks and months.”

7. Deliver results. In the final analysis, it is all about delivering results. Customers judge the performance of your company and products by how well you deliver on expectations. If you meet or exceed customers’ expectations, they are likely to buy from you again and they may tell others good things about you. Conversely, if you don’t meet their expectations, they certainly won’t buy from you again and they certainly will tell everyone they can about their bad experience.

Challenge #2: Power is with the buyer.

Startups are in a weak selling position, particularly when their products represent discretionary purchases and their offerings lack distinctiveness. The solution is to sharpen and then sell your competitive angle. Your product and/or service must stand for something different that is important to the customers. The Harvard study is correct. If your product offering lacks distinctiveness, customers have no reason to try it. 

Use the “so what” test to assess the importance and value customers place on your product. First, list each distinctive benefit of your product. How is it different from the competition? Then put yourself in the customers’ shoes and ask, “So what?” “So what does this mean to me and my company?” “How does this relate to my problem?” “More importantly, how does this provide a solution to my problem?” Finally, provide a concrete reason for customers to believe you can deliver on your promises. If you can’t answer the “so what?” question or provide a reason to believe you can deliver, customers will pass on your product. 

Challenge #3: Entrepreneurs often have big egos.

Entrepreneurs must learn to subjugate their egos and deal with frequent rejection. The solution is to check your ego at the customer’s door. This is not the time to win debating points. Sure, you could win the battle of words, but you will lose the sale. This is a real test for many startup marketers who want to show how smart they are and who want to defend their product. Remember, the focus is not on you. The focus is on the customer. A few years ago we conducted focus group interviews for a new product. Regrettably, we invited the entrepreneur to sit in on the first focus group interview. This was a big mistake, because each time a member of the focus group questioned the product or made a negative comment about the product, the entrepreneur jumped to the product’s defense. He was in “fight mode.” He could not bear to hear a disparaging word about his new product without providing a counter-punch. Needless to say, we did not invite him to the next set of interviews. Rejection is part of an entrepreneur’s life. 

Not all customers will fall in love with your products. A big part of being a successful entrepreneur is learning how to cope with rejection. Our experience suggests that successful entrepreneurs use rejection as an opportunity to learn. They think hard about what steps to take to overcome future problems. 

Do-It-Yourself or Outsource Sales

A major decision you must make is whether to sell the product yourself or look for partners to sell for you. Of course, if you cannot sell, if you are not willing to learn, and if you cannot find someone to teach you, then you should consider an outsource partner. Moreover, there are other strategic and cost reasons to consider. First, let’s consider the advantages of partners. Partners can provide instant access to customers. Dentrix Dental Systems found a group of salespeople that already knew the industry and had a presence in dental offices. By partnering with industry insiders, Dentrix received instant access to hundreds of dentists. More importantly, the salespeople transferred credibility and trust to Dentrix. By using partners, entrepreneurs save the cost of building and maintaining their own sales force. We have a friend in Eugene, Oregon who makes wood kits, such as clocks, birdhouses, home decorations, etc. for craft stores. He did not have the resources to build and maintain his own sales force, so he attended trade shows seeking partners to sell for him. He found a number of independent salespeople who sell to craft stores. They were eager to carry his line of wood kits. The good news for our entrepreneur friend is that he received instant access to hundreds of craft stores and he pays these independent salespeople only when they sell. On the other hand, the major disadvantages of outsourcing the sales function are loss of control and loss of power. 

When you outsource, you don’t control the selling activity. You have little power over the salespeople who are selling your product. In addition, the selling partner develops and owns customer relationships. The sales force will know and understand the customer better than you will. And for startups, very little is more important than knowing and understanding the customer. So, evaluate the strategic and cost considerations of do it yourself versus outsourcing sales. Which option can better sell, get the business, and close the deal for you? 

Remember What Works, Then Close

Customers buy your products and services for their own reasons. Take careful notes. Learn their hot buttons. What works for one customer may work for another customer. Remember the pitches that work in certain selling situations to close the deal. Then use this knowledge in similar selling situations. In addition, too many people think closing the sale is about using gimmicks and trick questions to get the customer to buy. This may work once, and only once. Remember the adage, “Fool me once, shame on you; fool me twice, shame on me.” 

In our experience, closing the sale is not about gimmickry or trickery. Closing the sale is about helping the customer make a decision to solve a problem or capitalize on an opportunity. We have found the best way to do this is to summarize the benefits your product offers the customer and then ask for the order. In summarizing the benefits, you should match your product’s benefits to the customer’s most pressing needs. Of course, this assumes you know the customer’s most pressing needs. And you do know them because you have asked good questions to identify the needs and you have listened well. With the Summary-of-Benefits Close, list each need and then show or describe how the benefits of your product address each need. Then ask for the order. A soft, non-threatening way to ask for the order is to simply say, “Based on what we have talked about today, do you feel comfortable purchasing our product?” Robert Lewis Stevenson said, “We all live by selling something.” This is especially true for startup marketers. Sell, sell, sell, and then close the deal!

Accelerate Time to Money

Learning to create a frenzy around your new business idea is a key skill in finding investors and signing up new customers. The fear of being at a competitive disadvantage or losing a business opportunity provides a strong incentive for people to get involved. If you want to get distributors, partners, investors, and key customers to sell, champion, invest in, or buy into your competitive angle, create a feeding frenzy by following the Rule of Three. Sharks have the same senses people have, including taste, touch, eyesight, hearing, and smell. However, a shark’s primary sense is smell. It can detect one drop of blood in a million drops of water and can smell blood a quarter of a mile away. When sharks smell blood in the water and see others circling their food, they go crazy biting everything around them. In short, seeing the opportunity to feed and watching other sharks circle the food gets them excited about the feeding opportunity and creates an insatiable appetite.

When sharks get into a feeding frenzy, they close their eyes and go for it! You don’t have to scuba dive to experience a feeding frenzy. People exhibit the same pattern as sharks. Each year, especially around Thanksgiving and Christmas, shoppers put on their shark-face when presented with the opportunity for a bargain. When the loudspeakers in a store trumpet, “Bargain in aisle five,” watch shoppers run to the location, snapping up products they hadn’t planned on with an insatiable appetite. When Christmas sales are advertised in the newspaper, watch people line up the night before just to be first in line to run through the store like blood-crazy sharks, circling every bargain and attacking everything and anything around them. While we know what drives a feeding frenzy in sharks, why do people exhibit the same primitive pattern? Answer: because of the FUG factor. 

F	Fear of losing out on an opportunity; people don’t like others getting an inside deal on the hot new product idea before they do.
U	Uncertainty if the opportunity will come their way again; people don’t want to miss out on the opportunity of a lifetime.
G	Greed for fame and fortune; people want an opportunity to hit the jackpot with a “WOW!"" product.

Instead of blood in the water, it is fear, uncertainty, and greed that spark the feeding frenzy in distributors, retailers, partners, customers, and investors. But don’t just allow one shark to circle your competitive angle. With one shark in the water, the only thing that will get bitten is your company. Never, never, never allow one key stakeholder to hold your company hostage. 

Great competitive angles will attract the attention of many other sharks. Allow other sharks to see, smell, or even taste your competitive angle. With startup companies, we find it is human nature for people to only take action when they are pushed to do so by the FUG factor. As entrepreneurs, we don’t have the time to wait for distributors, partners, and investors to eventually wake up and then make up their minds. Time is money and startup companies have a limited amount of time to survive. Startup marketers must accelerate time to money. Don’t limit the possibilities of your new business and slow the time line to success by only pitching to a “special few.” Go ahead and show as many people as possible your idea. You will be glad you did.

Rule of Three

The Rule of Three is based on the idea that it takes a minimum of three sharks swimming around your product idea to get someone to take immediate action. Many entrepreneurs are so excited about finally finding a willing partner, investor, or distributor that they usually “give in” to unreasonable demands or “give up” future opportunities to make money in order to complete a deal. You don’t have to do that. If you are going to survive and thrive as a company, you must pitch to a minimum of three organizations. To do otherwise is success-a-cide. Unfortunately, it is all too common for us to hear the following statements by entrepreneurs: 

“To start our company, we want to work closely with just your group.”

“We are not talking with anyone else except you because we value your relationship.”

“We want to give you exclusive rights so that you will have a competitive position in the marketplace.”

These entrepreneurs want to be cooperative and perhaps even noble, but they also may be a bit naïve. Their approach to the problem reflects commonly-held, wrong-minded tactics practiced again and again by inexperienced startups. Unfortunately, such tactics are doomed to fail and kill any feeding frenzy to propel a new company towards success. When you don’t allow others to look over, greedily consider, and fiercely compete for your product idea, you do not motivate partners or buyers to take immediate action. Hence, no FUG factor, no contracts, no urgency, and limited sales. 

Key investors, distributors, and customers need a compelling reason to take action. We have seen deals that drag on for years turn on a dime and change in a minute when other distributors, partners, and investors are brought into the picture. The level of excitement and appetite for a deal increases as others look at, sample, and negotiate. Using the FUG factor is an important way to accelerate funding and initial sales and they are a key to the all-important accelerate-time-to-money life blood for new companies. 

Don’t Choke a Feeding Frenzy

Few new products have received more press than the launch of the Apple iPhone. Unlike other Apple products, the iPhone was launched through an exclusive partnership between Apple and AT&T. In order to purchase an Apple iPhone, consumers committed to a two-year AT&T contract. Many analysts wonder why Apple made exclusive arrangements with AT&T and limited their opportunity to sell the phone on all wireless platforms. The policy left many consumers frustrated. They wanted to buy an iPhone but couldn’t buy because they were locked into a T-Mobile or Sprint. contract. Similarly, perhaps it is unwise to choke a potential feeding frenzy. All that snapping energy has to go somewhere. Within a year of the product launch, a class-action lawsuit was filed in federal court against Apple and AT&T. The lawsuit accused the companies of illegally conspiring to tie iPhone customers to AT&T’s wireless network. The suit seeks around $2 billion in damages. According to lawyers for Paul A. Holman in Washington State, Apple and AT&T conspired to block all modifications of Apple’s iPhone to stymie any attempt by users or competitors to diminish or tap into the Apple-AT&T revenue stream. When a great new product idea attracts national attention, it is probably unwise to get in the way of the feeding frenzy. When people circle a product they like and want, but can’t get, someone is going to get bitten. In this case, it may be the hand that feeds it.