Trailblaze & Grow Author: admin_tbga

Marketing is Quantitative

Merging Hard Facts With Creativity: Balance the Art and Science of Marketing

As data collection and tracking methods grow, the marketing world has shifted from a qualitative to a quantitative focus. Marketers are increasingly using data analysis, systematic observation, testing, and measurement to better understand their customers, prospects, and influencers. They are studying broad behavioral patterns and using these actionable insights to create campaigns that improve business outcomes.

 

In other words, the rise of big data has turned marketing into a science. Similar to the likes of Newton and Einstein, brands are hypothesizing, testing, and refining experiments based on data. They are also beginning to embrace ideas from other scientific disciplines such as psychology, sociology, neuroscience, economics, and computer science.

 

Balancing Hard Facts With Creativity

 

Statistical analysis can be intimidating, especially for the many marketing leaders who come from creative backgrounds. Instead of crunching numbers and relying on data, many prefer to focus on their own gut feelings, opinions, and intuition. This is the traditional “art” of marketing, and though it is still important and relevant, it is not the only side of marketing that matters.

If you only embrace the art of marketing, you can still end up with beautiful marketing assets and collateral — but these materials will not necessarily speak to your target audience. For example, TBGA once worked with a client that had been sharing a story that its audience was not interested in hearing. But after we interviewed industry analysts and conducted market research, the resulting data helped the client realize it needed to restructure its narrative. Once it did, the brand doubled its pipeline.


A key to embracing the science of marketing involves overcoming a psychological quirk called confirmation bias. Many leaders will opt to focus on specific metrics that tell them they are on the right track, ignoring any data that tells them otherwise. The beauty of data, however, is that it is inherently objective and unbiased. Gravitating toward flattering metrics completely defeats the purpose.

Other leaders, meanwhile, fail to question whether they are using the right data, whether there are other factors to consider that are not represented within the data, and how much weight they should be giving the insights they glean from the data — and this can cause problems, too. If you do not ask the right questions (or if you fail to ask any questions at all), your marketing programs may not provide your desired results, and you will not be able to pinpoint exactly what went wrong.

 

Balancing Art and Science Is a Challenge — But We Can Help

 

Today, data analysis should play a vital role in every brand’s creative strategy, and it should also help brands craft their quarterly goals. It should fuel every campaign you create and every milestone you set.

If the thought of embracing the science of marketing seems daunting, TBGA is here to help smooth out the process.

We are a team of data-driven marketers who come from a variety of backgrounds. We have a proven track record of helping brands establish key metrics, test hypotheses, analyze data, ask essential questions, and, at the end of the day, tell a story that moves the needle.

We help our partners achieve their objectives and uncover insights through an integrated data analysis of their clients, their offerings, and the circumstances of the money they make.

We can help you do the same. Ready to get started? Contact us today for a one-hour consultation!

 

Photo credit: stratman² (2 many pix!) / Furniture Fair / CC BY-NC-ND

Trust your data

Learn, Trust, and Use the Data You Collect

Marketers are finally seeing the light when it comes to spending on analytics. A 2017 survey of nearly 400 CMOs found that the amount spent on marketing analytics will increase 376 percent over the next three years.

This has us incredibly excited at Trailblaze Growth Advisors because, as a team of marketing professionals, we are extremely analytical. We know that companies have long been collecting data, and we are so happy to see them ramp up their efforts and continue embracing the valuable science of marketing.

 

But There May Be a Catch…

While the survey of CMOs found a large increase in spending on analytics, it also revealed that the use rate of data is stagnant. Essentially, companies keep collecting more and more data sets, but few are effectively leveraging these insights to their fullest.

Marketing leaders tend to have creative backgrounds, and many of them are not entirely comfortable diving into statistical analysis and uncovering the metrics that drive results. They tend to focus more on the art of marketing while neglecting the scientific side.

However, any modern-day company that wants to remain competitive, increase revenue and customer loyalty, and acquire new customers must let data lead the way.

Data helps marketers understand what is working, what is not working, and how they can improve the customer experience. In fact, according to a recent Econsultancy survey, many data-driven methods boost customer conversions — analyzing customer journeys and A/B testing work especially well.

Quantitative results must be a major part of a marketing department’s progress reports. Teams should constantly use data to review the performance of their campaigns, better understand their customers, and predict their needs, as well as guide changes to their marketing mix, campaigns, customer journeys, and distribution channels.

Most importantly, you must be able to trust that you are measuring the right behaviors and results. Marketing departments need to learn how to rely on the data that they are collecting and analyzing. Bad data makes this work more difficult and increases costs — up to 20 percent of revenue, to be specific.

 

How TBGA Can Help

The ability to have a fact-based, behavior-based, 360-degree view of the customer is the key to developing marketing strategies that deliver the results you need. But in order to maximize your data, you must first have clear objectives. Is your goal to increase revenue, grow customer loyalty, or acquire new customers? Once you identify your overarching goals, let data uncover key customer behaviors and use analytical tools to develop personalized strategies to directly achieve them.

TBGA focuses on data-driven decision making. Our CMOs come with a proven track record of helping companies embrace, trust, and leverage their data into tangible results that boost their bottom line. We can help you integrate detailed data about your customers, your offerings, and the circumstances in which purchases are made. We can also uncover hidden insights that help you create or improve your products, services, and processes.

We have helped companies learn how to trust their data. We know the strategic objectives that move the needle, and we have established metrics and benchmarks to use as guideposts along the way.

We are eager to do the same for your brand. Contact us today for a one-hour consultation!

 

Photo credit: Eric Fischer via Foter.com / CC BY

Would Your Business Benefit From a Fractional CMO?

Launching and growing a business is exhilarating — but it is no easy task.

Sheer enthusiasm and effort will only take you so far. It might help you get the ball rolling and raise a few rounds of funding, but there will inevitably come a time when your growth will stagnate. When that day comes, it will be in your best interest to stop bootstrapping and start surrounding yourself with proven experts who can help carry your brand to the next level.

This is especially true when it comes to marketing. To hit your next growth goals, you will need to bring in a seasoned marketing professional who knows how to develop an integrated strategy that effectively promotes your brand and converts people into customers. This requires experience in generating leads across multiple channels, managing people, and managing a P&L.

In other words, you need a brilliant chief marketing officer who understands what success looks like and knows how to deliver it. Unfortunately, finding this capable person is often easier said than done, especially for small to midsize businesses.

 

Finding a Fit

At Trailblaze Growth Advisors, we have seen companies waste tons of time and money trying to recruit and hire full-time CMOs. It usually looks something like this:

First, you may turn to your personal network to see whether a friend (or a friend of a friend) is looking for a job. Most of the time, this approach will not yield top-tier talent — and it could easily present an awkward situation in which you jeopardize a friendship by telling someone, “Sorry, you are not the right fit for my company.”

Then, you may elect to post an online job description, which will lead to a deluge of résumés and cover letters. Sifting through them in search of someone with the right experience and attitude for your company is no short order — and that is assuming you or your hiring manager understand what the right CMO candidate even looks like. From there, you still face several rounds of interviews and salary negotiations before you can potentially fill the position with a great candidate.

Or perhaps you will choose to hire a headhunter to do the dirty work for you. This can be a huge investment not only in commissions and headhunting fees, but also in the time required to on-ramp the hire.

All of the above options could easily cost your company more time and money than it has to spare. We estimate that it could take you up to a year to find the right fit, negotiate mutually beneficial terms, and incorporate the new hire into the fabric of your company.

If your growing business is looking to improve its marketing results today, we strongly recommend you take a different route.

 

Hire a Fractional CMO

Fractional CMOs are basically on-demand executive-level marketers. Like traditional CMOs, their ultimate goal is to supercharge your current marketing efforts, identify new opportunities for experimentation and growth, and provide mentorship to your in-house team.

However, there are two big differences between fractional CMOs and traditional CMOs: Fractional CMOs will cost you much less money, and they are equipped to have an immediate impact on your marketing ROI from day one.

Trailblaze Growth Advisors’ fractional CMOs are industry veterans who have embedded themselves in a wide variety of businesses across multiple industries. We know exactly what it takes to help companies like yours achieve their next growth goals.

Sure, you will be working with an “outsider” — but this outsider will lend an impartial eye to your company’s inner workings. We will make honest suggestions regarding your current tactics and strategies, provide input on future initiatives, and put a plan in place for follow-through. Just as importantly, a TBGA fractional CMO will put all the necessary metrics in place that illustrate your marketing ROI.

Last but not least, we can serve as a stopgap while you search for your future full-time CMO. Our fractional CMOs will ensure your company does not lose momentum as it takes the time it needs to find the perfect permanent hire.

 

If your company is stuck in a rut and is struggling to accelerate its growth regardless of how much time, money, and effort you invest toward the cause, it is time to consider partnering with TBGA and hiring a fractional CMO.

Contact us today for a one-hour consultation to learn more about how our marketing veterans can accelerate your brand’s business growth.

 

Photo credit: Latente 囧 www.latente.it via Foter.com / CC BY-SA

Why Your Marketing Consultant’s Pedigree Matters

Hiring a marketing consultant based on the power of her sales pitch is akin to hiring an airplane pilot based on how sharp her uniform looks. This limited amount of information provides you with little to no idea of whether this person can actually help your business soar.

Unfortunately, too many small to midsize companies make this very mistake, hiring marketing consultants without first taking a close look at their credentials and pedigree. In fact, quite a few of our current clients hired us to help them rebound from consultants who did not live up to their slick sales pitches.

 

For example, before working with TBGA, one of our clients hired a senior marketing consultant who used his fun, personable attitude to win them over. However, once it came time to get to work, it turned out he was not the right fit for them.

Our client’s entrepreneurial environment required a consultant who could establish metrics, set priorities based on ROI, push his priorities throughout the organization, and most importantly execute on the plan — and this gentleman was in over his head. He always seemed to be working hard, but in the end, it turned out that he was just spinning everyone’s wheels. There were no quantifiable results to speak of.

The consultant was frustrated, the client was disappointed, and neither party walked away happy. Although we were grateful to have an opportunity to fix the resulting mess, we want you to get it right on the first try.

Pedigree Matters

Ivy League MBAs, previous jobs at blue chip companies, firm handshakes — these should never be the sole reason you hire a consultant. Pedigree is not about any experience; it is about the right experience.

You need to make sure a candidate’s experience will dovetail into your unique needs. If you do not know exactly what you need, you should hire a consultant who can help you identify them.

At the very least, your consultant should have experience working at companies that resemble your own, carrying out tasks similar to the ones you have in store, and delivering the real-life results you want to see.

When looking at a candidate’s track record, ask yourself the following questions:

  • Has this person ever spearheaded the launch of a new business or product line?
  • Does this person typically have access to a large budget and team, or is he or she an expert at maximizing minimal resources?
  • Has this person ever built and led a marketing team, or does he or she typically work in isolation?
  • How does he or she measure success?

Our roster of marketing experts is deep and diverse. Some of us have held senior leadership roles.

 

We are a hands-on team of collaborators; no one at Trailblaze gives advice from the sidelines. We know that your specific goals require specific solutions, so at the start of our relationship, we dive in and embed ourselves into your business.

From there, we are constantly in pursuit of perfection. We always strive to be on the cutting edge, proactively seeking new research, new technology angles, and new information. We utilize modern-day tools and tactics that will help us deliver the results you desire.

Best of all, we back up our talk. We set clear objectives. If we do not meet those objectives, it is probably because we have exceeded them.

 

We at Trailblaze Growth Advisors provide more than a savvy sales pitch; we provide proven marketing expertise that will help accelerate your growth. If you are searching for a consultant who is a passionate, determined problem solver with a proven track record of success, contact us today for a one-hour consultation.

 

Photo credit: levork via Foter.com / CC BY-SA

What is a fractional CMO?

What Is a Fractional CMO?

When we say that we offer fractional CMO services, we are frequently met with some variation of the following question: “What does that mean?”

Then, after we define the term, we almost always hear this: “What a great idea! We did not know this was even an option.”

So what exactly is a fractional CMO?

Essentially, it is a senior-level marketer who embeds him- or herself into a company and drives its marketing results to the next level — either temporarily or on a part-time basis. This person comes equipped with a wealth of experience and knowledge, but unlike a traditional CMO, he or she does not come along with a high price tag or arduous hiring process.

Our fractional CMOs have proven track records. We have led marketing teams and sculpted marketing programs at Fortune 500 companies and startups alike. We do not work from hypotheticals; we know what works and what does not, and we apply these lessons and best practices to our clients beginning on day

1.  “It is essential to have a full-time CMO.”

The CMO’s role is certainly essential, but it is not essential for this person to be a full-time member of your team. A part-time CMO can provide the strategy based on hands-on experience in order to focus the blocking and tackling support that junior marketers provide. This focus steers the team toward high-value programs and away from low-ROI ones. In the end, you increase your return on marketing spend and do not waste time on tactics that do not work.

Even if your ultimate goal is to someday hire a full-time CMO, a fractional CMO can be there to support you while you search for the best candidate. Given the amount of time and money it takes to find top-tier marketing executives in the open market, partnering with a TBGA fractional CMO is a great way to quickly reap the reward of experienced leadership without sifting through hundreds of résumés or hiring a headhunter. In fact, he or she can help you vet candidates and determine whether they are the right fit for your company — all while managing your strategic marketing initiatives and mentoring your less experienced marketing professionals.

2.  “I am better off promoting an internal candidate.”

Think about the amount of time, training, and resources it will take to transform an internal candidate into a trustworthy, knowledgeable CMO who drives tangible results for your bottom line. It could take years.

Fractional CMOs come in ready to contribute — and they could even mentor your up-and-coming internal candidates. Beyond that, they possess a fresh, unbiased outsider’s perspective. They will not be bogged down by company politics and bureaucracy. Instead, they will feel free to point out flaws, voice concerns, and give honest feedback and suggestions that revolutionize your marketing function.

3.  “I would rather save money by hiring a junior person.”

Similar to the above misconception, this is also a recipe for wasted time and delayed growth. Most businesses have little to no margin for mistakes, and if you hire an inexperienced CMO to lead your team, you open the door to this very issue.

Because our fractional CMOs have a breadth of experience across different marketing systems, tactics, and corporate environments, they possess a big advantage over junior employees. As senior leaders, they already know how to manage teams, assemble P&L reports, and quantify their impact.

4.  “We hired a great marketing agency, so we have it covered.”

Agencies should be an extension of your marketing strategy — not drive it. Your team will need to provide the competitive landscape, target segmentation, buyer personas, and differentiation.

Your CMO is also responsible for ensuring your marketing operations are running efficiently. Agencies are not equipped to dive deeply into a company’s internal operations and infrastructure, discover inefficiencies, and provide relevant solutions that move the needle.

On the other hand, when you hire a TBGA fractional CMO, your company becomes his or her one and only priority. This person is ready and able to roll up his or her sleeves, investigate the inner workings of your marketing department and company as a whole, and offer tailor-made solutions that result in measurable benefits.

 

We hope that we have cleared up any uncertainty surrounding fractional CMOs and how they can help propel your marketing results. If you have any further hesitations or questions — or if you are interested in scheduling a one-hour consultation — please contact us today!

 

Photo credit: familymwr via Foter.com / CC BY

The CMO as Your Growth Partner

Ultimately, the people at the helm of your company make or break your organization’s strategic abilities.  If what makes a CEO shine is growth, then your CMO is your partner in crime. Their input will be essential to the broad challenges that you will face: competition, innovation, and core customers. Also, few have a better feel for the end-user/consumer pulse than the marketing executive – their relevant and refined perspective on customer preferences will play a vital role in your company’s growth.

In today’s economy, the CMO is at the crossroads of growth and customer experience. CMOs are increasingly seen as a director of growth and customers, rather than the director of spending and advertising, worldwide. The CMO role has changed from working exclusively on brand communication and messaging to driving impactful growth and cultural change. Marketers not only need to funnel customer intelligence into all parts of the business; they also need to keep up their technological proficiency, utilize big data to create meaningful customer interactions, and deliver value within a consistent brand experience.

While CMOs need to be part of the key decision making, they also need to partner closely with your CFO part of the key leadership.  It’s important that your CMO partners with chief financial officers to help them contribute to top-line growth and position themselves for a seat at the board table.  Together, they can steer the ship responsibly.

A strategic focus on return on investment, coupled with the rise of customer centricity and acquisition allows for CMOs to achieve measurable value within the organization. In fact, the CFO and CMO should be working hand in hand to increase accountability and reduce inefficiency — the CFO’s role is greatly enhanced by today’s savvy marketer as they are often the most resourceful person on your team.

Change the way you work with your CMO. Both CEOs and CFOs stand to gain tremendous insight at the ground level and meet the growing customer expectations. The role of the CFO is also becoming more multifaceted so work closely with your marketing person to help your organization survive and thrive in this increasingly competitive landscape.

How to tell a good CMO from a successful one? The latter hone the ability to think long term, adapt quickly, and pitch in with the team. They are able to shift from focusing on growth to a ‘big picture’ mentality. Thus, your CMO should not only influence decision-making but be able to make the tough calls, embrace uncertainty, and put relevant issues in front of the board to consider. This focus on vision makes a difference. Consider opening a conversation about bringing your CMO to the board room and see how they can deliver even more value as your strategic partner in crime.

Want to chat about this topic? I’m speaking at the NASDAQ Entrepreneurial Center in San Francisco on Thursday, June 30th on Marketing through the Funding Lifecycle.

Save Time

Analysis to Help You Stop Wasting Valuable Time

How useful would it be for you to know exactly where your time was best spent? How would it improve your productivity if you could quickly and reliably determine which customers were most lucrative for your business, and which ones were costing far more than they were worth holding on to? Fortunately, the ability to determine exactly that was established more than 100 years ago.

Back at the dawn of the 20th century, an Italian economist realized that he could mathematically calculate the fact that 20% of Italian citizens owned about 80% of the nation’s wealth. This equation proved to be valuable in analyzing far more than just the wealth distribution in Renaissance Revival-era Italy. In fact, the so-called “Pareto Principle” has been (and continues to be) used as an effective method of measuring distributions of wealth, effort, sales productivity, and countless other applications. This is because there is a fundamental truth — what some might call a philosophy — associated with the 80/20 equation discovered by Vilfredo Pareto.

What is the fundamental philosophy of Pareto?

At it’s core, the philosophy of the Pareto Analysis is based on an understanding of the fact that a relatively small percentage of input is responsible for a significant amount of the output. More specifically, that 80% of output can be attributed to 20% of input. This, of course, works when analyzing wealth distribution (as it was originally used by Pareto), but it also works in a number of other applications as well.

Perhaps the most compelling application — at least in our entrepreneurial and capitalistic society — is use of the Pareto Analysis when assessing productivity. More specifically, an entrepreneur, or salesperson, can usually attribute about 80% of their profit (or sales volume) to about 20% of customers. On the other hand, about 20% of customers often take up about 80% of the bandwidth available to an entrepreneur or a sales team.

The Pareto Analysis can be applied to any number of things:

  • Customers – both the time demands and their profitability
  • Daily tasks – where your time is spent productively and unproductively
  • Wealth – where the majority of your wealth is coming from, and where the majority of your expenses are derived
  • Anything else you can think of!

Using Pareto Analysis to become more productive

In order to use Pareto Analysis effectively, you must first be willing to accept a couple of facts: The first is the fact that some of your clients or customers may not be worth your time. Even if they are paying you what seems to be a valuable amount, the reality is that the opportunity costs associated with highly-demanding clients may be preventing you from gaining more worthwhile (in the long term) clients. The second thing you must be willing to accept is all work is not equal.

Not all clients are worth keeping. Many businesses, particularly those that are just starting out, are reluctant to turn down any work that comes their way. After all, money is money, right?

In fact, taking on a client that continues to be unprofitable or is demanding a disproportionate amount of your company’s time can ultimately prevent you from developing new, more profitable business elsewhere. You can use the Pareto Analysis to determine which clients are taking a disproportionate amount of your time (so you can try to phase them out) while also helping identify which clients are producing the vast majority of your revenue (so you can nurture and grow those clients as well).

Some of the work you do isn’t worth the effort. The bottom line is that you simply cannot do everything, and you certainly cannot do everything well. As such, you should use the Pareto Analysis to determine which specific aspects of your day are producing the majority of benefit, then work to eliminate or delegate/outsource anything that does not fall into that category.

Try using the Pareto Analysis yourself, and see if you can make your day more productive by eliminating the time consuming, unproductive tasks and focusing on the high-yield tasks.

5 Rewards

Five Ways To Reward Employees (Besides Raises)

Your best employees contribute to your company in a variety of ways, and your tools for rewarding them should be just as various. Not only is it not always feasible to raise their pay, but employees often prefer other forms of compensation. Effective employee rewards include:

Casual Days

Many employees find dress codes restrictive, so give them a day when they’re free to wear whatever they want. For every week that your office comes in under budget, employees receive one casual day the next week. Make sure to schedule the casual day when you don’t expect clients to come into your office, and make exceptions for workers who have to go out and meet clients that day (but give those workers the right to dress casually on a different day). This will encourage employees to work together and improve productivity, and it won’t cost you a cent.

Even casual clothing days cannot be rule free; employees shouldn’t be allowed to come to work wearing too little or wearing shirts with offensive wording. Ask your employees to use their best judgment, and be willing to answer any specific questions they have ahead of time. Casual need not mean unprofessional.

Flexible Schedules

If a worker has demonstrated high productivity and a commitment to hard work, give that worker the freedom to set his or her own schedule. Many workers would be happy to work two twenty-hour days in a row and take the rest of the week off; as long as you trust them to get all their work done, giving them the freedom to do this won’t cost you anything. It may even raise productivity. By freeing workers from the constraints of a 9 to 5 schedule, you’ll allow them to schedule meetings with clients when the time is best, use commitment when other workers aren’t around to block them, and adopt more efficient methods.

Dole Out New Devices

One of the greatest sources of workplace frustration is having to use outdated computers and faulty office equipment. To reduce employees’ stress and help them do their jobs more easily, consider updating your most loyal employees’ equipment. Not only will this send a positive message to those employees, but the new equipment should pay for itself through higher levels of productivity and reduced waste. Rewarding employees with new equipment is particularly effective if you allow them to set their schedules at the same time. This way, every minute they save with the new equipment is another minute they can spend as they choose.

Enrichment and Exercise

Install exercise equipment, massage chairs, and other devices that improve health and lower stress. For the low price of adopting and powering this equipment, you’ll let employees break up the monotony of the workday, feel more energized, and counter the negative effects of sedentary office life. A chance to relieve stress will also render your employees more productive, more than making up for the price of the equipment. For best results, offer your best employees extra break time after you install the equipment. This will reward your staff as a group while giving individual workers an incentive to rise above the rest.

Broadcast Their Value

The Internet and social media offer a panoply of new possibilities for recognizing employees’ achievements. In addition to awards ceremonies and physical plaques, you can add a “virtual wall of fame” to your website and update it monthly to recognize the most productive employees. You can also make a video in honor of the employee you’re rewarding, containing a summary of his or her accomplishments and interviews with co-workers who have positive things to say. Just make sure to check with your employees before you upload anything about them to the Internet, as many workers are uncomfortable with having even positive information broadcast about them.

How do you recognize employees and colleagues that go above and beyond?

Photo credit: GotCredit / Foter / CC BY

Pricing Banner

Developing Your Pricing Strategy

A comprehensive pricing strategy is critical in capturing and defending market share. By establishing differentiated pricing strategy for your offerings based on customer priorities, a company can sell expand its customer base, increase customer satisfaction and revenues. The most effective strategies for price differentiation include:

Temporal Tiering

Changes in customer demand are not random. Most companies do the majority of their business during a certain section of the day (or week), and this is largely the result of customer scheduling constraints. By offering discounts during times of low-demand , you can cater to price sensitive customers to improve awareness without degrading the profitability of your current customers won’t be able to take advantage of it. Thus, you’ll gain revenue from new customers without sacrificing revenue from old ones.

Since consumer preferences also vary by time of year, you can offer discounts on a seasonal basis. This is why tax preparation software companies so often offer bargain basement prices to customers who buy their software in February but gradually raise the price as it gets closer to mid-April. Customers who make a point to get their taxes done ahead of time can take advantage of the discount, but most other customers will wait until closer to tax day, ensuring that the companies will still sell plenty of software at full price.  Conversely, offering discounts during periods of high seasonality may be necessary to defend your market share such as back to school season for PCs, software, school supplies and clothing.

Volume Discounts

Another effective discounting strategy is to lower unit prices as the purchase volume increases. Volume discounts can help ensure that your most loyal customers receive a relative decrease in unit price as they increase their spend with you. This will attract consumers who seek long-term savings but won’t affect the habits of transactional customers who only buy your product for immediate use. This is an effective strategy for selling services and non-perishable goods, as there is no disadvantage to buying such goods in bulk and using them over time.

B2B SaaS companies use volume discounts to expand adoption across an organization. You can establish baseline prices for individuals to use your software, but then create various “business packages” to appeal to businesses of varying sizes. Businesses that buy it for 3 employees receive a 10% discount, and if they licenses for 10 employees, they receive an increasing per license discount.

Driving Conversion

Discounts need not only appeal to prospective customers. You can also use them to upsell and cross-sell current customers. Consider a software publisher that provides both word processing and tax accounting products. When customers download or subscribe to its word processing software, the company offers a discount to or a free trial of its tax accounting software during checkout. This may encourage customers to buy its tax software during off-season, pushing the competition in the tax category aside.

Another trick is to offer customers a simple, or lite, version of a product with a clearly defined upgrade strategy to upsell customers to an advanced set of features. Using the word processing software example above. Using the word processing software example above, rather than offering a discounted version of its tax software, the company can offer a free basic version of its offer such as a 1040EZ filing.  The customer can be sent to an upgrade path once he or she has indicated that additional support is needed.  The company can provided a more advanced version or additional services or support for a small additional fee, convincing the customer to spend more money than he or she had originally intended.

You can increase conversion rates and revenue per transaction through bundling by allowing consumers to buy multiple products together at a lower price than they would have paid if you had sold them separately. Say you sell language learning software, charging $30 for the beginner’s program and $40 for the intermediate program. You can get more customers to buy the intermediate program by offering the two together for only $60.  Amazon uses this strategy effectively when selling items such as books, music and accessories.

The strategies above are just the tip of the iceberg.  As always, set your hypotheses and test, test, test.  However, as you set your test strategy, keep in mind that it is harder to raise than it is to lower price.

Sources:

Photo credit: BPPrice / Foter / CC BY

Weekly Roundup

Weekly Roundup: Bridging Gaps, Startup CEO Guide, Product/Market Fit and more!

As you know, we share two of our favorite articles and blog posts each day.  For those of you who do not have time to read each of them, we have compiled the top 5 articles that have been shared the most:

1. Bridging the Gap Between Business and Tech Teams http://ow.ly/2ZlZsn  via Ara Howard and the Unreasonable Group

2. Hot Seat by Dan Shapiro: A Book Every Startup CEO Should Read http://ow.ly/2ZlZrZ via Brad Feld of the Foundry Group

3. Americans Prefer Not to Work for Family-Owned Businesses http://ow.ly/2ZlZsJ Scott Shane in Small Business Trends

4.  Even Collaborative Cultures Need Space for Introverts http://ow.ly/2ZlZs2 via Ilan Mochari in Inc. Magazine

5. Four Steps to Achieving Product/Market Fit. Great products and competitive prices cannot capture market share alone.   via Trailblaze Growth Advisors

Shameless Plug:  I was featured as a StumbleUpon Innovator.  Learn a little about what makes me tick…  http://ow.ly/OcrGq via Andrew Levine of StumbleUpon

What was your favorite?