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Mary Lou FultonKnight Digital Media Center News Entrepreneur Boot CampMay 17, 2009

Learning to be a Humble Egomaniac

(or what the art of audience development can do for you)

+Today’s Topics

Developing Your “Working Theory” What problems are you trying to solve? For whom (consumers and funders)? What are the benefits of solving those

problems?

Making the Case What proof do you have that there is a need? Sizing your consumer audience Sizing your funder audience

Break

+Today’s Topics

What Does Success Look Like? What behaviors do you want to motivate? How large does your audience need to be? What results can you deliver for funders?

Testing Your Theory How will you measure your progress? How will you talk to your customers and funders? How long to wait before making a change?

 When You’re All Fabulously Successful… What will your customers say about you?

+Quick Round of Pitches!

+Observations on Your Writeups

Largely focused on WHAT you want to do, not WHY your idea is needed

In making your pitch, you’ll find that people connect with the WHY much more than the WHAT

+Defining and refining the “who”

“Everybody” is generally not an effective audience strategy.

It’s OK to imagine a broad audience as your ultimate goal, but it’s a lot easier to get traction with a more focused group at first.

A more focused audience will help you spend marketing dollars more efficiently, make it easier to forge partnerships and deliver better results for your funders.

+Defining and refining the “who”

Some ways to focus: Geography Shared interests or concerns Life stage or event Demographic characteristics

(age, gender, race and ethnicity, marital status, kids)

Economic achievement (income, home ownership)

Psychographic segments (“living local”)

Combine characteristics for even more focus

+Great Products Solve Problems and Meet Emotional Needs

What practical problems or needs are you addressing? Saves me time (prepared

meals in supermarkets) Saves me money (99 Cent

Stores) or helps me make money (Google AdSense)

Better than current solution (Swiffer)

Keeps me informed (ESPN) Customized for me

(TiVo/DVR) Better customer service

(Mike Diamond plumbers)

+Great Products Solve Problems and Meet Emotional Needs

What emotional benefits does your product deliver? Makes me feel more

competent or in control Makes me feel smarter

(or seem smarter) Lets me show off and

look cool! Affirms my

identity/makes me proud of who I am

+Great Products Solve Problems and Meet Emotional Needs

What emotional benefits does your product deliver? Makes me feel better

about where I live Gives me a feeling of

belonging (I’m not in this alone)

Helps me to be a better parent/partner/sibling

Helps me achieve my dreams

+Maslow’s Hierarchy of Needs

+Let’s do another round of mini-pitches

Who do you aim to serve?

One practical benefit

One emotional benefit

+Do not neglect the “funder” part of audience development!

Most of you come from the “creative” side of things rather than the business or revenue side.

This often leads to overinvestment (time, money and technology) on the product design and presentation, and underinvestment on the revenue and marketing strategies.

If you’re not a “money” person, then partner with or hire someone who is, and do it now.

+Ideas for identifying funders

You need to go through the same thought process for funders as you have for consumers.

What funders want to reach the audience you’re targeting? Geography, demographic categories, life stages,

home ownership, psychographic segments

What problems can you solve for them? Works with their budget Easier More efficient way to reach their customers Better than current solutions Most importantly, delivers results

+Ideas for identifying funders

+OK, now prove it! So you’re all set to solve the problems

you’ve identified. How can you prove there is a real need for your product?

Talk to your current or prospective customers (consumers and funders) Have you correctly identified their needs

and wants? Would they use this product? What would

make it INDISPENSABLE for them? Gather quotes and testimonials to use on

your site and in marketing materials

+OK, now prove it! Look at the competition

Have competitors already been able to attract an audience? If so, what’s the size of the audience? (Hint: check the Advertise With Us section)

What funders or sponsors are associated with competitor sites?

Read forums or comments on competitor sites. What are people complaining about that you can do better?

Has this concept worked in other places or with similar segments? Can you talk to those entrepreneurs to gather lessons learned? Can you partner?

Advisory boards. Can you attract people with credibility to be your advisers and endorse you?

+Sizing Your Audience

In the world of venture capital, a common approach is to make investment decisions based on “sizing” of the audience and revenue potential.

Audience sizing How many consumers are there in

your target audience? What percentage of them do you

hope to attract, and over what span of time?

Example: web site for younger moms in Bakersfield There are 541,000 adults in Kern

County There are 112,000 moms with kids

age 12 or younger (21% of the total market)

Of the 112,000 moms, 59% are age 35 or younger (66,080)

We aim to reach 35% of this younger market (23,128 moms) within 24 months

+Sizing Your Audience

Example: web site for younger moms in Bakersfield 541,000 adults in Kern

County There are 112,000 moms

with kids age 12 or younger (21% of the total market)

Of the 112,000 moms, 59% are age 35 or younger (66,080)

We aim to reach 35% of this younger market (23,128 moms) within 24 months

Make sure you aim big enough

+Where to Find Audience Sizing Data

Geographically-focused products: U.S. Census Data,

http://www.census.gov/ City government web sites Local Chambers of Commerce or

Economic Development Councils Scarborough Research: media,

shopping and lifestyle data used by many media companies. Expensive but excellent. http://www.scarborough.com/

+Where to Find Audience Sizing Data

Interests, demographic categories, digital trends Pew Internet and American Life Project,

http://www.pewinternet.org/ Emarketer.com: Sign up for free e-

newsletter MediaPost.com

Competitor sites. Check Advertise With Us section or rate card

+Revenue Sizing Data

This data is more difficult to obtain, but very important.

The goal is to estimate all of the revenue/funding being spent in the categories you’re targeting, and what percentage you aim to capture.

Determine the marketing budget range of your funders. Businesses typically spend 1% to 3% of annual gross

sales on marketing, i.e. a business earning $1 million a year in revenue would spend $10K to $30K.

It’s also useful to estimate the number of funding sources (businesses, sponsors, other funders) as a market share reality check.

+Revenue Sizing Data

High-end solution: Claritas Business Point, http://www.claritas.com/

Bootstrap solution: Geographically focused products: count business

listings in Yellow Pages (print or online); talk to local business groups.

Know competitor rates and audience. Count ads in competitor products and try to estimate their revenue.

Trade associations are good sources of data

If your revenue strategy assumes you will be able to immediately attract a high percentage (20%+) of funders in a category, you need to rethink your approach.

+More business-side support

Most communities have Small Business Development Centers, funded by the U.S. Small Business Association.

These centers offer free training, guidance on financial and sometimes even personal consulting!

http://www.sba.gov/aboutsba/sbaprograms/sbdc/index.html

+Now your ego is righteously large because you can … Clearly identify who you want to serve

Understand the problems or needs you’ll be addressing, and the solutions you can provide

Make the case for why these needs can’t or won’t be met without your new product

Identify potential funders, understand their needs and how you’ll deliver results for them.

Size your audience

Time for a break!

+Defining Success

What behavior would you like to see from your site users to best meet the needs of your business?

Your site design, editorial content and revenue-driving content should be aligned to meet your goals.

Sites vary, but in general, most entrepreneurs want a loyal, engaged and growing audience.

+Measuring Loyalty

Is what you offer compelling enough to become part of someone’s everyday life? Loyalty measures include: How often someone

comes to your site (more often is better)

Time spent per visit Pages viewed per visit

+Measuring Engagement

Are people really into in your site? Are they willing to share who they are, sign up for newsletters, create a profile, start a blog, leave a comment, join a group?

Engagement measures include: Registered users Log-ins Signups for email newsletters or

other “push” content How many people create content How many create a profile and take

part in social interactions with others

+Measuring Audience Growth

How many individuals visit your site over what time period?

“Unique visitors” measures the number of unique individual computers that view at least one page on your site.

“Visits” means the number of a unique computer views your site over a particular time period.

Example: If during a week, I visit your site on Monday, Wednesday and Friday, my behavior would be logged as ONE unique visitor and THREE visits over a 7-day period.

A look at Google Analytics

+Measuring Success for Funders

When promoting your site to funders, you’ll want to tell them about your success metrics

But you may also want to create separate metrics that meet THEIR needs.

+Measuring Success for Funders Some common online advertising metrics are:

Impressions: the number of times an ad is “served,” or presented. A single page can include many impressions if it includes many ads.

CPM: The cost for delivering a thousand impressions Click-through rate. The number of times an ad is

clicked on, expressed as a percentage of impressions. Average click through rate across the web is under 1%

Pay-for-performance advertising. Google is a leader in this area and an increasing number of advertisers will be demanding this. Also, pay-per-click and pay-per-call.

+Be Creative! Think Differently!

Let’s face it, the banner advertising model isn’t that great, even with improved targeting.

Instead, think of how what you offer can help solve problems for your funders: Maybe they need more market research

about the target audience. Let them survey your users, and be up front about it.

Maybe they’d like to sponsor an event at their place of business.

Maybe they want to build their email contact database

Perhaps you can help them with their overall digital marketing strategy, including but not limited to a presence on your site.

+Talking to Customers

What is your strategy for communicating with your customers?

Lots of ways to create a forum for feedback and discussion: Blogs Forums Online surveys Online focus groups

+Testing Your Theories

No matter how much you have planned and prepared, you will be wrong about some things and surprised by many things

When you’re surprised, take the time to understand why: Did you misread audience needs? Is your site design working against

you? Do you have the right marketing? Is your concept too complicated?

+Every startup changes course

This is the part about being humble

You have to constantly test your theories, watch your metrics and listen to customers.

Success won’t come instantly – it can take months to get traction and longer to build critical mass.

Keep a close eye on your dashboard metrics measuring reach, loyalty, engagement and revenue. If at least two aren’t moving in the right direction after a year of focused work, your idea may not be viable (and a better one may be around the corner).

+Let’s look ahead…

You’re a big success!

Your customers love you. When they talk about your site to their friends, what would you want them to say about what you’ve created and what it means to them?

+Thanks for inviting me to part of your Boot Camp experience!

Mary Lou Fulton, mlfulton@yahoo.com

I look forward to working with you this afternoon!