Thursday, March 22, 2007

Lessons Learned #3

This lesson is about marketing. While all the other lessons so far have been about what I have done wrong, this one is actually something I did right for the most part, but it's still an important lesson for any other new mISV's out there.

The big thing these days in the ISV community is to throw a product together and market it with almost no money spent. Just some Google ads, SEO, and splogging. But what if your audience isn't looking for you? Or what if they don't read blogs or discussion forums? I knew from the start that I wouldn't be able to just sell ChimSoft via Google AdWords or email spam.

I of course did use AdWords and SEO. My AdWords expenses are usually under $10 a month though. This is partly because of the low number of sweeps, partly because of the low competition for my keywords, and partly that I'm the number one organic hit for almost anything "chimney sweep software" related. That said, almost none of my business has came through Google.

First, I started out by contacting Chimney Sweep suppliers. In the industry there is one huge supplier that has maybe 80% of the marketshare. Then there are maybe 5 or 6 other decent sized ones that pick up the rest. I contacted all of them to see if we could carry their parts catalog in our program (hey free advertising!), and if they were interested in reselling ChimSoft. Only one company, which I'm proud to plug, Lindemann Chimney Supply was cutting edge enough to see the value in this. When I contacted Lindemann, immediately they provided me with a digital catalog, and discussed some other options. Unfortunately all of the other companies were less forthcoming. Many of them wanted an exclusive arrangement, or would just blow me off. Some promised they would deliver a catalog, only to never follow up. Reseller agreements were discussed with some of the companies, but nothing ever came to fruition.

Next, we scheduled ourselves for the two biggest sweep conventions. These were absolutely invaluable in terms of publicity. This is where most of our sales came from. Don't expect them on the showroom floor (although that did happen), but make sure to take business cards from people and give them yours.

Finally, word of mouth was another great way to market to this community. Many people would call us because they heard about us from someone else (often the suppliers would finally return our calls when a customer mentions us). All of the above are examples of how you must step beyond the comforts of the online word to sell a product sometimes. Is it a lot more expensive and time consuming? Yes. But if we had not done these other things, I doubt a single sale would have occurred.

For my next project though, I really don't want to go after this audience. I want to work with customers who check their email at least once a week if not daily (half the people on our email list would return with a "quota full" error). I want customers who understand the web and are comfortable making a purchase without a phone call. Make sure you figure out which type most of your customers are when you begin to market.


At 9:04 PM, Anonymous Scott Meade said...

Thanks for sharing your lessons learned. This is a well written and interesting series. I think that even when targeting tech-savy customers most companies don't do enough marketing, advertising, and PR. It's interesting to note the marketing budgets of successful apps highlighted at the SXSW panel "Barenaked App: The Figures Behind Web Apps".

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One app - travel site - spends $60,000/month on marketing activities. Sounds like a lot when they spent $60k to build the whole app and spend $18k/month on hosting. But look at the results when asked their annual profit #s: DropSend: $106,044, FreshBooks wouldn't say, Maya's Mom: $0, Wasabe: $0, and Mobissimo $450,000! Now, I don't know if that $60k/mo is all internet ads or affiliate fees or what - they did not give that level of detail - but they clearly did not take a build-it-and-they-will-come attitude.

(I've focussed my blog on marketing, now I need to actually do some of it myself!)

At 9:11 PM, Anonymous Scott Meade said...

Phil - one other note and then I'll stop hogging space.

For #3 you said: " I want customers who understand the web and are comfortable making a purchase without a phone call".

It's interesting how your Lesson Learned #3 ties into your Lesson Learned #1 - Stick with what you know. The more you can relate to your customers - the more you are like your customers (e.g. you are someone who understands the web and are comfortable making a purchase without a phone call) the better everyone's experience will be. Sounds like a great idea - I like it and thanks for sharing!


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