Marketing Consultants My Experiences by Jack Krupansky It's easy for an entrepreneur with a hard-core technical background to assume that marketing is best left to marketing "professionals." At first I didn't. Then I did. Then I realized my mistake. Now I don't. This article outlines some of my experiences with marketing consultants and tries to make a few recommendations to help those who follow and wish to avoid many of my mistakes. What do Marketing Consultants do? Marketing is not a single, homogenous discipline. There are lots of ways to split it up, but I would roughly break it down as: strategic planning, product planning, marketing communications, direct mail / telemarketing, and sales support. Some people think of sales as part of marketing, but I define marketing as everything up through lead generation and some sales support. Put simply, the goal of marketing is to generate leads and the goal of sales is to turn leads into customers. The marketing portion of your business plan comes under strategic planning. Press releases, press tours, advertisements, brochures, trade shows, seminars, and newsletters come under marketing communications (known as MARCOM.) Partners and acquisitions would come under strategic planning. Marketing consultants range over that entire spectrum of activities, so you need to decide which areas you want assistance. Some consultants are good at helping you with your business plan and characterizing your market. Others are good at MARCOM. Some specialize in contacts with the trade press (otherwise know as public relations firms) and help you with "PR." Others focus on types of lead generation (e.g., direct mail.) Many have experience in the full range of activities. From my experience, their common weakness is their inability to do product planning. Primarily that involves the technical aspects of the product and how they relate to specific customer needs. They can do it, but it takes a lot of their time (i.e., your money) and your time to bring them up to speed. And if your target market is very technical, it is usually a lost cause. The best way to deal with product planning is to communicate with prospective customers and maybe even literally let them write the spec. But I would say that if you are uncomfortable doing the product planning then you're probably in the wrong business. Where To Find Them Let them find you. If you advertise in a trade magazine or attend a trade show, they'll contact you. My first contact with "them" was while standing in my booth at the Software Development conference in Boston in 1991. Two different guys from New Hampshire stopped by to suggest that I needed their services. Besides their stupid grins, the easy way to tell they were marketing consultants was that their business cards were printed in portrait mode rather than landscape mode like normal business people. If they were trying to turn me off, they succeeded. The day before I wrote this text I received a letter from a firm offering "strategic management resources for information technology businesses." They say they can help me turn my "efforts" into "wealth." AND, they say that "even if you feel our help is not needed and you just want to talk about our ideas, please feel free to call..." I may call them, if for no other reason than to educate them on the issues that a one-person business compared to larger businesses. Since they're in the New York area they might be able to give me some contacts or maybe I can help some of their clients. Contacts The biggest benefit you can get from a marketing consultant is access to their network of contacts. If they have experience as a corporate executive then they probably have a lot of executive level contacts. Free Advice If you are thinking of making a decision for marketing, run it by a marketing consultant to see what they think. You're always free to ignore their advice, but they might suggest something you hadn't thought of. Or maybe just ask them how much it might cost to do something. Don't tell them you want free advice, but say something like "I'm thinking of doing X and I was wondering if that is something you could help me with and what kind of budget would I need." Review It can easily be worth paying for an hour or two of their time if you are unsure of something and really want a professional opinion. Likely, you will later decide that you could have come to the same conclusion yourself, and in the future you will know how to do so with more confidence. Let them critique your ad, brochure, press release, cover letter, etc. On the other hand, you'll be better off if you cultivate a professional relationship with other entrepreneurs who can do the same critique for free. A quick review of your business plan (whether it's a formal plan or just vague ideas) with a marketing consultant could give you insight into aspects that you overlooked. Even if you followed a textbook approach, the consultant could give you the benefit of their experience. They might also say you don't have any chance of success; you then decide whether you really are ready for a crusade in search of the holy grail or whether maybe you should re-focus on a more modest and achievable goal. Think of their input as just raw information; you filter it as you see fit. Searching for Strategic Partners I talked with come consultants about identifying companies with whom I could form strategic alliances. But due to the lack of their depth of understanding of the development tools market and its venders, I realized that I wasn't prepared to spend the time (and money) to educate these guys on very many companies. We talked some more and I finally identified a short list of candidate companies. When presented with that list one of the consultants realized that he knew someone at one of those companies who was very close to being the right person to talk to. He was right. Unfortunately there was no strong interest in my technology, but at least we did get to the right person. After lots of reflection I have concluded that bigger companies in search of technologies always have their eyes open and will spot you as long as you are out in the market selling your product. You can also flush them out by wandering around trade shows and asking product managers and executives whether their customers might want to use some features of your complementary product. 128 Venture Capital Group Another place I ran into a number of marketing consultants was at a meeting of the 128 Venture Capital Group in Newton, Massachusetts. They sponsor monthly breakfast meetings at which entrepreneurs get to give a two minute pitch and so-called "service providers" (consultants) and investors (private and venture) also give short pitches. After breakfast and a feature presentation, people hookup with others that caught their attention. I spoke with several marketing consultants and investors who thought they might be able to help me. I never did use any of their services, but I did have several discussions that helped me clarify in my mind what I was looking for. And I did begin to understand how they and that group might help me in the future. My interest at that point was in identifying strategic partners that might license my technology for incorporating it into their products. I was approached by a few marketing consultants, but didn't go forward since I was still not sure of going in that direction and also given my lack of success with previous consultants. It only costs $25 to attend (including breakfast), and trying to figure out how to compress your entire business into two minutes does help you improve your focus and highlight problem areas. PR Firms The obvious approach to "PR" is to send a press release to editors and columnists at trade magazines. Although it is certainly true that those editors "could print a press release", they are so inundated with zillions of pieces of paper that it's easy for yours to get lost in the clutter. Some people resort to multiple mailings to each contact. And sending faxes. And sending e-mail messages. PR firms are in the business of cutting through the clutter and getting your product "placed" in a trade publication. Assuming you have a large enough budget. For a few thousand dollars a month they'll make sure the press release really does get through. Unlike us, they don't mind calling the editors endlessly and asking if they've read the press release yet, highlighting key points about the product, asking if they want a demo, and arranging for you to visit the editor and give an in-person pitch and demo. With my previous product I started out by simply calling editors, chatting about the product, and offering to send them details as well as an evaluation copy. For hard-to-reach editors I contacted the advertising sales person who usually offered to put a copy of my blurb on the editor's desk and occasionally remind them about my product. I was able to get coverage in some smaller publications, but nothing in Byte, PC Magazine, PC Week, etc. Since my product wasn't wildly successful, I figured a more intensive PR effort might be warranted and maybe a PR firm could help me. I talked a few times with a firm that had contacted me first, but when I gave them some information and suggested they draft a cover letter as a way of convincing me they could deal with my product they kept delaying and I finally gave up on them. Fortunately I hadn't given them any money. A second firm also flaked out on me (no money lost there either.) Finally I ran into a firm at Comdex that seemed responsible and seemed to know a lot of the right people. They understood that I could only budget $500 to $750 per month for a few months and drafted a stripped down plan. A gave them $600 for the first month. They started okay and reported a few contacts. Then I heard nothing for a week and when I called I was told that they were all off doing a big campaign for one of their larger customers. I finally gave up on them and consider the $600 a small price to pay for now having had the experience and knowing a lot better what goes on in the PR part of marketing. Although my original goal was to get some editors to basically do my selling for me, I found out the hard way that I can sell better than they can. I thought an "independent review" of my product would carry more weight than my biased opinion. But I ended getting significantly more sales from an article I wrote myself for one of the magazines than from several reviews and "new product" announcements. My conclusion is that as long as you stay away from excessive hype, technical types would rather hear directly from a hard-core engineer than have the information filtered, hyped, and obfuscated by an editor. So, unless you really do have a big company PR budget, do it all yourself and focus on direct, personal contact with relevant editors. E-mail is a good backup to the telephone as long as your message doesn't "sound" like a press release. Just say you have a new product, describe it in 25 words or less, offer to e-mail literature, and offer an evaluation copy. Image I spent a lot of money on a really nice logo, a nice brochure, a nice ad, and accompanying stationary. What a waste. There's nothing wrong with appealing to the management audience, but in my case in was really the software developers in the trenches who were reading the ads and then selling the boss on the product. Even when it was the boss reading the magazine, he was reading it as if he was a low-level technical staff member with little interest in "form" and lots of interest in "function." Now I'm focused on a no-nonsense, strictly text-only approach. It turns out that lots of people would much rather buy a product from someone they can relate to rather than "a company." So the only image problem I had was a lack of confidence in my natural image. Exploit what you do have and don't worry about what you don't have. Ad Design I did my first ads strictly using features of the word processor with a few fonts, point sizes, bold, outline boxes, white on black, etc. Eventually I decided I might get more attention of management types with a "professional" ad design. Armed with my new $700 logo I worked with a marketing consultant who in turn interfaced with a really good graphics designer. The result was a really nice ad, except for the fact that it didn't generate increased sales. Further evidence that my target audience both didn't care about flashiness and didn't seem to mind that I was a small operation. Market Research I had this crazy idea of combining a small market research effort with a kind of newsletter targeted at managers interested in development tools. It would consist of a survey requesting their opinions of various trends such as operating systems, 16 vs. 32-bit, language preferences, project size, problem areas, etc. It would also ask them for both their current beliefs and how they think that might change over the next two years. I intended to distribute the results as a newsletter, including some analysis of the trends over time of their responses. I contacted a marketing consulting team recommended by another marketing consultant. They politely listened to my research idea, but then recommended a sophisticated direct mail testing strategy. They convinced me not to do my research study. Over time I realized that marketing research is its own domain and that mere mortals like me and most marketing consultants don't go near it. I think my research would have yielded interesting results, but without any standing they would carry no weight and probably would not have yielded significant increase in sales. So indirectly, these consultants probably saved me some money. Direct Mail With direct mail, you get just a very few seconds to capture the recipients attention. A poorly designed direct mail piece could cost you dearly. Even if you do all the rest of the direct mail campaign yourself, the cost of having a professional critique your piece will be worth it. A consultant might want to do the whole job to rake in the overhead from paying clerical people a low wage, but if they know you won't go for it, they'll probably still be willing to design a road map and piece for you. If for no other reason, because if you are successful and see how much dogwork really goes into the campaign then next time you may want to do it "the right way." I haven't done any direct mail campaigns yet, but it is high on my list of things I'm interested in if I begin to be more than moderately successful. Or maybe it's just something you put off until you grow big enough to be a "real company." Waiting for a Real Job Several of the marketing consultants I have encountered were really just out of work and waiting for a real job to materialize. One in particular ended up as president of a development tools company. Another simply disappeared, but I wasn't surprised since he had casually mentioned that his wife kept asking him when he was going to get a real job. That doesn't mean you shouldn't deal with a "new" marketing consultant, but reaffirms the importance of keeping them at arms length and not assuming they'll be here tomorrow to help you out of whatever mess they created. Money Rules Even if a particular consultant really seems to fit your needs, you must always remember that they might drop you at a moment's notice if a bigger deal comes along. They may have enough professionalism to string you along rather than dumping you outright, but the effect is that they won't give your business the attention you think it deserves. Abdication of Responsibility and Control It is quite tempting to try to turn all the marketing stuff over to the marketing types and focus on the product stuff. But that's a big mistake. Use them as you would any tool. They need good input, constant attention, occasional advice, and someone to say "that's good enough" or "that's not working." As the entrepreneur, marketing is your job #1. You can delegate specific tasks to consultants, but you are still responsible for understanding how those tasks are being done. Don't even think about abdicating your responsibility unless you really do want to give up control of your business. Other Entrepreneurs You may not need to got to a full-blown marketing consultant to get some consultation on marketing. Try one of your fellow entrepreneurs first. You do have to be careful about giving out your secrets, but selective disclosure could bring valuable input for no more than the price of a phone call (or e-mail message.) Be careful not to put a burden on your peers and you'll be able to count on them to periodically give you a little advice over the years. How to Pay Typical MARCOM jobs are paid for with hard dollars. But for strategic marketing such as locating financing or searching for business partners the marketing consultant might very well be willing to take a percentage of the value of the deal or actual equity in your business. That's less money out of your pocket, but means the consultant cannot be simply discarded when you no longer need or want them. I recommend paying money when you can, limiting your budget to what you can afford, and avoiding marketing consultants if you can't pay them outright. And don't resort to giving equity to a marketing consultant just because you're desperate and don't know what else to do. Conclusions Like any other tool, marketing consultants have their appropriate uses and their misuses. Focus on putting yourself in their shoes, scope out the work from their point of view, and then filter the results before trying to apply them to your particular entrepreneurial niche. The concepts you'll apply are the same as theirs, but the actual implementation will most likely be radically different. Make yourself a "marketing checklist" that you review from time to time (like once a month.) It should have some obvious questions. Is your ad paying for itself? Should you attend a trade show? Should you contact a marketing consultant for some free advice? Should you consider a direct mail campaign? Is your product running out of steam? Does your product need a new release with new features? Should you go on-line? Are your customers happy? Do you enjoy talking with your customers? Do you need a business plan? Is your business plan working for you? Could you earn a handsome return from an infusion of capital? Instead of a simple yes or no, consider wording the questions so they are answered on a 0 to 10 scale so you can track your progress month to month. The more questions the better, but try to make them fit on a single sheet of paper so that reviewing the list doesn't seem like an overwhelming burden. Just because a question is on the list doesn't mean you have to consider your business suspect. And don't think you need to anxiously worry about each question every minute of every day. Think of the list as a free marketing consultant. And there's one other question that absolutely has to be on your list: Are you having fun yet? ------ Jack Krupansky runs a one person software business, Base Technology, which develops and markets the Liana object- oriented programming language and C-odeScript callable scripting language interpreter and offers Windows software development consulting. He may be reached at 800-786-9505, e-mail at jack@basetechnology.com, or on the web at http://www.basetechnology.com.