Should Marketers Rent Or Buy?

Brian Halligan - HubSpot CEO - gave a great marketing startegy interview on MarketingPilgrim.com earlier this week.  In the interview, Mr. Halligan drew an interesting parallel between renting and buying as an online marketer:

Marketers are traditionally renters. They rent space on shelves, they rent space in Adwords, they rent space at tradeshows or they rent giant lists to cold call from. None of this is anything they own.

We believe that the best way to market a product or service is to create assets that you own and can nurture. Things like unique content, links, Facebook fans, Twitter followers are assets that stick around and, from a monetary aspect, can cost a lot less than the old model.

I dig the analogy.  Here is my addition $.02:

• For start-up marketers, it probably make sense to begin with a rental strategy to find your audience and hone your message.  It takes a lot of effort to develop "owned" marketing assets, so I suggest investing wisely.
• Halligan makes the argument for quantity over quantity.  Even though he has internal data to support his claim, I think that this is a fine line.  HubSpot generates a ton of content and I read none of it.   Other companies and bloggers publish less frequently, but I read every single piece they produce.  Depends on your target customers - are they sophisticated or are they beginners?
• Creating is more valuable than sharing in the long run.  I'm blown away by the number of social media marketers that seem to think that curation is just as important as creation.
• Content marketing is a habit.  The recent rebirth of The Boggs Blog is my effort to get back in the habit.

Free Trial? Or Request A Demo?

We recently made the decision to drop the "free trial" call-to-action from our site in favor of a "request a demo" call-to-action.  A few reasons why:

• We're a sales-driven company, not a marketing-driven company.  In other words, we expect to qualify, demo, and close accounts over the phone.  We don't expect customers to sign up without speaking to a rep - though it has happened quite a few times!  
• Our pricing starts at $149 per month, which prices us out of the e-commerce model.  We recently launched a $499 per month offering and we plan to launch another up-market product in the near future.  So we're migrating away from the "free trial" market.
• Free trials customers often don't have the best experience with our application.  We're targeting SMBs with a focus on those that know what they're doing - so our app is a bit more complex than that of our low-end competitors.  Free trials can sometimes leave customers confused, whereas demos let us frame the value, explain the app, and get the customer up and running more quickly.
• Requesting a demo is pretty strong interest indication and requires the prospect to clear a higher hurdle that a free trial - so our lead volume might drop, but lead quality might increase.  Not a bad trade off if you ask me!
• Free trials attract all kinds of ne'er do wells - spammers, competitors, hackers, etc.  A simple qualifying step keeps these goofballs out of your app and precludes lots of headaches. 

Thoughts?  We're watching the results very closely - will be interesting to see how the change plays out.

More Product Or More Customers?

Earlier this week, a very smart person asked me if I would rather have "more product or more customers" - in effect asking if it made more sense for Argyle to make very near-term investments in product development or customer acquisition.

I said "more product" without hesitating and then proceeded to give what was probably a rambling, incoherent justification for my answer.

Here is a more structured argument:

1.  The best marketing program is a great product - especially considering the social media-fication of the Internets.  And doubly especially considering that we're selling a social media marketing product to social media marketers that LOVE to talk about social media marketing to other social media marketers.  The better the product, the more people talk about us, the more people talk about us, etc.  Phil Libin - CEO of Evernote - makes a similar case in this video.

2.  I'm not interested in filling a weak funnel.  We're already generating revenue, but I'm not ready to crank up the marketing spend just yet.  Our website is OK and getting better.  Our app is good and quickly becoming great.  We can keep humming along with a primarily hustle/social driven marketing program, grab the dollars that we can, sink a couple more months into product development, and then make big marketing investments once we feel better about the payoff economics.  Why spend money to drive targeted traffic to a semi-complete site/product?

3.  We don't have a lot of resources.  Given our stage, we need to spend on things that build permanent value.  $10k on software development builds a feature that we'll always have and that makes our product much more compelling.  $10k spent on marketing will give us some customer acquisition insight...but only temporary insight and at a very small scale.

Note that I'm not a "build a product and worry about making money later" kind of guy.  On the contrary, I LOVE selling and look forward to selling/marketing Argyle like the rabid wolverines that we are.  We're just not there quite yet.  But we will be very, very soon.

And the correct answer to the "more product or more customers" question is actually "both - as quickly as possible".  :)

Prediction - HubSpot Will Acquire An ESP In 2010

The ExactTarget / CoTweet deal got me thinking...and here's one of many thoughts:

HubSpot is going to buy an email marketing service provider 2010.  And I have a few pretty good ideas of who it could be.

Here's why it is going to happen:

It is blatantly obvious. 

The guys at HubSpot have built a fantastic B2B lead management machine with some nicely integrated SEO, blog, and other content tools.  (And probably more - I'm not an expert on their platform.)

Email is the obvious missing piece.  I think HubSpot already provides customers tools for simple nurturing campaigns...but my hunch is that there remains MUCH room for improvement. (What about mailings that are independent of a lead form or the HubSpot platform?)

I also suspect that many of HubSpot's low/mid-tier customers would gladly dump their existing email vendor for a reasonable, integrated offering from HubSpot.

(Yes - email marketing kinda goes against the inbound credo.  But if you do it right, email marketing makes inbound marketing MUCH stronger.)

Email marketing isn't easy...

...and it certainly can't be dumbed-down into a grader.  (Zing!)  Deliverability, workflow, reputation, best practices, etc. all have a steep learning curve - both for the customer and the vendor.  The best email marketing apps are highly specialized and get all of the little details just right.

Instead of trying to build it all in-house, HubSpot would be smart to buy a platform and all of the email marketing product/industry expertise that comes with it.

They've got to keep pace.

Eventually, HubSpot will to start bumping into up-market vendors like Marketo, Eloqua, and Salesforce.com - all of which have very strong email marketing components, either native or through amazingly tight integrations.  Thus, it would take them a long time to build out a feature-complete email platform that is strong enough to compel marketers to switch from their existing vendor.

So they'll buy a mid-tier vendor, integrate the platform with HubSpot, happily accept the top-line bump from the new contracts, and make up a lot of ground with their biggest competitors - all in one smart acquisiton.

They're flush with cash.

HubSpot CEO Brian Halligan recently said that the firm's next financing round would hopefully come from public markets, which means that their last round came at a great valuation and gives them a nice, long runway to grow...a runway presumably lengthened by the gobs of cash they're raking in every month.

A $8M - $15M acquisition is certainly in their sweet spot.  And the list of email marketing vendors that match that profile is fairly short.

--
PS - Here's why it won't happen:

• They won't be able to get a good price from a good ESP.
• Despite everything I just said, HubSpot seems like a builder...not a buyer.
• I'm just taking a wild guess.

Changing Times For Marketers

You better start swimming or you'll sink like a stone.

Bob Dylan said that to beautifully articulate the rising tide of the Civil Rights Movement.  I'm just appropriating completely out of context to explain the sink-or-swim situation soon facing marketers.

(Instead of taking the time to craft an original thought - I'll gladly/lazily refer you to this great entry from Forrester forecasting the tectonic shifts facing marketers over the coming months and this "trends for 2010" post from eMarketer CEO Geoff Ramsey.)

The long and short of my perspective is this - I hate being marketed to...or marketed at...or however you want to describe the dim-witted shortcuts that pass for "marketing" these days.  (See Dell, iContact, and Sarah Palin.) 

Unfortunately, interrupt-driven - and lowest-common-denominator - marketing will always exist because - to some degree - it works and because it often provides to only mechanism for super-broad reach. 

Fortunately, there is a glimmer of hope on the horizon.  And it comes from relationships generated from the opt-in, personalized promise of email marketing and the influence and insight from the social web. 

The technologies and tools are there - marketers just need to step up their game, get smarter, get personal, and stop spraying/praying. 

Return On Tweeting

I think I coined my first acronym a few weeks ago and feel compelled to broadcast it to the interwebs so that I can lay claim to it before it becomes the new LOL or ROI or FMFL.

ROT = Return On Tweeting

Brilliant!

Joking aside, the acronym spawned from an email exchange with a friend in which we discussed Twitter's emergence as a mainstream social platform, its inevitable emergence as a real deal marketing channel, and some early-stage technologies that enable marketers to measure the impact of their Twittering - their ROT.

Case in point - in addition to my personal stream of consciousness, I tweet off/on as Kenan-Flagler Business School.  Last week, I tweeted (or twote?) Michael Porter's lecture on campus and used my friend Adam Covati's idek.net service to shorten the URL to this:

http://idek.net/48a

instead of this:

http://uncnews.unc.edu/news/business/harvard-business-professor-porter-to-talk-about-global-competitiveness-march-6.html

The short URL from idek not only lets me squeeze in enough characters to serve the link, but it also lets me track the response.  Kenan-Flagler has 135 followers as of today.  Per idek, my link to the Porter press release was clicked 29 times.  I didn't post the link anywhere else, so we can safely assume that all of the clicks came from my tweet.

Some quick math yields an astounding click-through rate:

29 / 135 = 21%

For those of you unfamiliar with online/email marketing - that is a ridiculous number.  If I were an ecommerce site and had 135K followers instead of 135, the 21% click-through rate would represent revenue.  Even better - it represents high margin revenue because Twitter is a free service...at least for now.  (I look forward to testing other types of links and Tweet constructs.)

In my opinion, the strong conversion comes from a mix of the following:

15% - Twitter is still largely comprised of early adopters who voraciously consume information from the service.  I probably could have posted a link to just about anything and gotten a similar response from this crowd.  Yes - I'm talking about you @djwaldow...  :-)

15% - Kenan-Flagler's followers are MBA applicants desperate for any crumb of information that will help them improve their app and chances for acceptance.  This is actually a good thing - I'm aggregating these people and building a conversation keeps them engaged with Kenan-Flagler.

70% - Twitter is the real deal.  Marketing is about conversations...and so is Twitter.  The next Google?  Probably not.  The next Facebook?  Umm.  There is a reason that FB tendered an offer to acquire Twitter...and a reason Twitter declined...and a reason that the forthcoming FB homepage rev looks awfully familiar...

As for the measurement piece - it is a little rudimentary for now, but will get better with time.  There are a handful of apps out there now - and more to come for sure - that enable marketers to aggregate their Twitter and other social web activities, measure the effectiveness of their programs, and ultimately tie it all back to an ROT.

Believe me, this post could go on for much longer.  I'm a big fan of Twitter and continue to be amazed by its utility and evolution as an Internet powerhouse.

I wish more of my friends/family would sign up.  (Mom, Dad, Erin, Evan - HINT!)  It is a great way to keep in touch...

PS - If you're still a Twitter skeptic, then you should try following keywords in real time on http://search.twitter.com during the next big event - televised or otherwise.  You'll be hooked immediately.  The commentary from the masses is WAY more entertaining and sometimes more insightful than the blatherings from the mainstream media talking heads.

This Is Your Pharmacy

I just got the following phone call:

This is your pharmacy. A member of this household has a prescription that is ready for pick up.

(pause)

A member of this household has a prescription that is ready for pick up.

(pause)

A member of this household has a prescription that is ready for pick up.

etc.

Either the record player was broken, or that was the worst customer service phone call I've ever received in my life. It is unbelievable that Eckerd/RiteAid wouldn't invest a little more time/effort into a communication that reaches so many of their customers.

Even worse - why am I not getting an email telling me that my prescription is ready? My cell phone is just as susceptible to intercept as my inbox. Plus, the message contains no private medical information.