Dr. Sowma is a published author and current decade-plus Professor of Business, Marketing, & Research Methods. He has consulted in wide range of business and academic contexts, from developing business, marketing and operational plans to developing research protocols and analyses in psychometric, business, academic & quality control/engineering contexts.
His two decades of effort have led to benefits ranging from helping countless start-ups and small business to developing one of the most complex online behavioral research studies in the literature to saving corporate clients millions via tailored and efficient applied research methods/protocols in concert with meaningful statistical analyses. He has served as a DM, COO, and Business/Marketing Consultant in a wide range of industries.
This family man is best summed up by his wife as one of those poor romantic souls that's prepared for a Star Fleet that does not exist, as of yet. He's been refereed to as "Doc Brown" on more than one occasion and during his greater bouts of creativity, comedy and inventing. In his free time, he volunteers for both the Girl and Boy Scouts of America.
For the sake of parsimony, I’ll start by simply agreeing with others in this thread in terms of the difficulties associated with obtaining VC and the propensities to support established businesses versus a start-up or good idea. I’d also add that they will want considerably more ownership than an originator or team would expect up front as well as control in most cases. The old adage is that no one wants to support you unless you already have the resources on your own.
Appreciate too that your pitching your own capabilities just as if you were in a job interview. Ideas and potential opportunities are great, but can you (and partners) actually get the job done? Moreover, as can be seen across answers here, developing business and marketing plans are a highly reiterative process. As you face critiques and new ideas, you’ll gain a better idea about what to include and what to refine over time. It can be a year or more of effort from an initial idea to a detailed plan based on extensive due diligence and 100’s of conversations with people across areas of expertise.
Give the open-ended nature of your question, it’s difficult to give specific advice, but there are some obvious considerations that must be addressed. You’ll first need to establish demand based on your targeted markets. If you’re in an established industry, then it’s fairly straight forward to discern some base demand and revenue benchmarks. For example, in a scenario where I was establishing demand for a bar-restaurant, we relied on cash register totals and other financial info from nearby comparable establishments.
Then, using info from a range of sources (industry/trade reports, market assessments, etc.), those initial revenue numbers could be tweaked over time to reflect market predictions. I/We typically generated 5- and 10-year analyses and don’t forget that it must convey the initial transition into the market; how soon before the business is operating at full capacity? If you’re in a new market, then you’ll be forced to argue more by analogy, using the closest comparable businesses or low-ball generic heuristics (i.e. .5-1% marketing response rates).
Once you have an idea about potential revenues, you’ll need to build a general and then operational budget. You’ll have to factor in every detail as if in the real world. For example, what are the personnel/staffing, property, equipment, manufacturing, marketing, distribution, legal, accounting, financial, insurance costs and so forth? As previously noted by others, this will require considerable due diligence and associated interactions with a plethora of potential supporters. Expect an emphasis on softer numbers such as marketing costs and response rates and your reasoning/defense of them. No one will even consider you if you don’t convey detailed realistic marketing plans that demonstrate reasonable efficiencies/returns per each promo method and media, given the potential target markets.
At this point, you should have some idea about the potential profitability and thus whether to continue or not? The next and critically important step is to then build up models that show an operational budget and cash flows. Usually conveyed via weekly and/or monthly time units, you’ll be simulating costs and revenues that occur each week/month over at least the first 3 to 5 years of operations. You’ll be answering important investor question such as when “break-even” status and positive cash flows occur. Cash flow is a biggie in that many businesses fail because they can’t last long enough to overcome an early cash flow deficit.
Finally, have a range of best- and worst-case scenarios and reflect their direct impact on your daily financials. What happens if revenues are 20% less than expected or marketing efforts are half as effective as expected? These impacts might look reasonable in terms of general or static budgets, but even nominal reductions could have big impacts on your monthly cash flow. All this knowledge also conveys a reasonable assessment of risk and the subsequent boundaries and pitfalls, all of which are key investor questions.
As you build up this numeric model of the business, you’ll need to weave it into a compelling, coherent and detailed business/marketing plans to share with potential investors and pertinent 3rd parties. Even a more generic plans may be a 100 pages long. Visuals are paramount in both your written and meeting presentations; use a professional artist for key renderings or diagrams. Supporting research should be clearly conveyed to defend your ideas. Have resumes in the bibliography of you, any potential partners and employees, general supporters and organizations, and business/chain alliances. Have two plan versions prepared, one long/detailed and one very brief/ general. You don’t want to give away the farm to a person/organization until they’ve shown interest, spent time with you and otherwise identified themselves as a legitimate potential investor, but then be prepared to bare all.
It’s a lot to tackle and it’s an uphill battle for those not financially endowed, but I hope this gives you some important considerations and of course I’m here if you need the help.
As a marketer, start-up enthusiast and home improvement veteran, I felt compelled to address this question. While it may appear to be a fairly straight forward marketing challenge, coming up with an efficient marketing strategy is far more complex of a challenge than it appears on the surface in your situation. I also wanted to build on some of the solid advice presented in the previous answers. My only caveats are that I can only go so far, given not knowing the exact nature of your product and why you specifically focused on the selected targets and the reasoning/research behind it.
Right out of the gate, there’s an obvious issue with age in your case. While appearing more homogeneous, your age range represents a highly diverse market in terms of specific “reach” requirements and individual factors. As seen across answers, part of your market will be at least reasonably if not highly sophisticated in terms of web and social media use and I highly agree that FB should be the main social promotional tool. I would also add mid to late 40’s to your targets until proven otherwise, which has its own marketing implication, but will likely groove with some of your 50’s consumers anyway.
Moreover, all of these target consumers will also have a high probability to conduct online information searches, as well as use “how to” and “review” sites and instructional/review videos. I won’t belabor you with repeating some of the basic tactics as noted by previous responders. At first, to get off the ground, the targeting and messaging can be simpler, but I will say that you’re probably going to need to gain a much deeper understanding of your targeting in far greater detail then the basic demo’s listed here, for the long run. This will be critical to determining the most effective/efficient messaging and unique selling propositions across online platforms.
Conversely and as noted in previous answers, you’ll have a large swath of consumers who are either limited web users or outright avoid the web like a plague. If you only go after online consumers, you’ll totally miss out on a lot of potential customers/revenue. Accordingly, you’ll need to utilize more old school marketing methods as well. Zip code-based direct mailers, brochures, and branded swag can be an effective tool, but beware that direct mailers with swag can get pricy, though can be effective. My concern would be to provide swag (i.e. magnets, pens, lights, etc.…) to highly targeted smaller lists (and A/B test) and focus on messaging based on some sort of repeat or WOM generating intentions. While difficult to answer perfectly, in simple terms, you’ll want swag that someone in your target market would actually use/keep. For example, magnets can be an awesome tool, but a big waste if they don’t make it to the fridge; there has to be a synergy/coherence or some other hook.
What I would add is to consider regional or national local affiliate marketing through TV and/or radio. My guess is a good portion of your targets will listen to their favorite AM station or oldies FM. Local TV spots during the noon or evening news could be highly cost effective, but can be pricy in terms of absolute costs/resources. I like the previous advisor’s idea about using local retailers, but be aware that it can be tricky with 3-way promotional relationships and, the goals and benefits must be aligned and common/agreed upon by you, the manufacturer and each given retailer. There also might be conflict between direct and indirect retail competition. I would also combine the best of both worlds in perhaps arranging a deal with online retailers as well.
Although you didn’t ask about these issues, I wanted to offer a few more pieces of advice. First as alluded to in my earlier answers, you will need to go into greater detail as far as targeting variables and selecting the best sub-target markets go. This will be vital to discerning the best promo methods, messaging, tactics and so forth based on profiles and associated consumer behaviors. For example, consider the very wide range of potential consumers and behaviors just associated with golf; there are wide variations in demographics, education, lifestyle, socioeconomic, geographic & cultural factors, which may lead to very different promotional methods and media. Similarly, consumers that play golf, hunt, and fish may be significantly different in terms of wants/needs/behavior as compared to those that just hunt and/or fish.
These same issues go for just using basic variables such as age or gender; I bet you that we could come up with dozens of other variables to consider. Also, it could be a mistake to ignore women as well, given their potential earning status in a given home and increasing uptake of traditional male interests and activities. I’d also figure out the difference between “those too busy to mess with home improvements” versus those that are just flat out incapable thereof (an ever-rising male trait) as the important messaging factors and calls to action could be different to best “speak to” each group.
Finally, I’d would be very thoughtful in terms of business/marketing relationships with the manufacturer and handing potential competition from people like yourself. Developing strong relationships and legal/contractual arrangements will be a must, though not a guarantee. Granted, many a manufacturer will be happy to have marketing outlets like yourself but given that they typically will have more resources (i.e. financial, technical, CRM, contractors, etc.…) they may use you as a pick, to use the auto racing vernacular. They might let you take all the risks or find out what works best and then simply bring those operations in-house and at total scale. They may agree to national territories at first, but other contractors may stand out in particular regions and have their own clout and won’t want to share with you, nor the manufacturer want to lose them as a channel outlet.
I hope this gives you some good ideas about some of the basics that will need to be properly addressed and of course I’m here if you need further professional help. Good luck!
As a new member of Clarify, I liked your questions given their challenging nature. Indeed, as indemnified in the previous answer, choosing the proper promotional media is a tough decision. As well pointed out, the most straight forward way to determine which methods work best would be to use some form of A/B testing and estimate the total costs against the subsequent revenue generated by each specific marketing effort. Taking the time to develop detailed mock budgets along with various speculated levels of revenue would give a good feel about potential ROI’s as well as the financial risks associated with each potential success given the upfront costs.
However, simply looking at the overall costs’ verses generated sales for each promotional method/tactic is something that should occur only after you’ve made efforts to extensively understand your target markets. In short, other factors such as the specific message and planned targeting will impact promotional efficiency as much or more than any other factors. Accordingly, you’ll first want to determine the best general markets, and then you’d want to discern the best sub-markets within each general target market based on consumer factors such as consumption levels, profitability, or ease of reach.
Moreover, you’ll want to figure out where consumers are in the consumer decision making process as well as their buying behaviors. The more you understand comparatively more sophisticated variables beyond simple demographics, such as lifestyle factors or psychographics and so on, you’ll also better understand the best branding angle, messaging objectives, unique value and selling points, a specific call to action, etc. Variables such as the time of year and buying contexts can greatly influence channel and media efficiency as well. Similarly, and equally important, given this knowledge, you can begin to determine realistic goals and objectives; is it creating awareness, promoting first-time/repeat consumption, sale goals, site traffic and the like? In isolation, key indicators like ROI don’t convey why something works or how to improve it, nor do they thoughtfully inform goals and objectives other than at the crudest of financial levels.
In sum, gaining all of the a fore-noted knowledge will allow you to not only better discern which promotional methods would inherently be more efficient given your target markets, but the specific channels selections within a given medium where applicable as well (i.e. such as specific website affiliations, search terms, Radio channels, targeted mailing list variables?). Knowledge in total about targeting, behavior and the potentially most efficient media will give you the best chances for success as compared to simply looking at the outright costs of each potential marketing medium in a vacuum.
Not knowing the specific nature of your operation and resources, it’s hard to give tailored feedback, but there are some general concepts that may help in guiding you. For example, samples via direct mail are usually pretty expensive per contact and can be highly wasteful/inefficient without precise targeting. Conversely, if done properly, direct mail can be critical to establishing “awareness” and promoting actual consumption experiences. These same tenets are true with event marketing, but with the benefits of having consumers self-select themselves. The potential pitfall here is how to handle/reduce false or inaccurate consumer information as a part of the promotional interaction; everyone wants something for free, but they may not be willing to part with personal information, obviously reducing the efficiency of this type of campaign effort. Proper targeting and anticipated walk-by traffic thereof as well as concepts such as appropriate brand alignment with a given event will drive promotional efficiency.
As far as online marketing is concerned, building trust is critical. Consider the repeated range of news stories concerning your industry such as bait and switch tactics or involuntary subscription-based free sample scams, fake endorsements and so forth; this problem is even further exacerbated with an unknown brand. Whether it’s real user endorsements, affiliations (i.e. the BBB, or trust/site verification providers), or site design elements and stated standards, enhancing trust can make or break a new brand and website, dramatically impacting efficiency. Also, you didn’t mention it, but consider everything from social media efforts to professional websites (such as LinkedIn) to boost site traffic/marketing efforts and increase perceived credibility and marketing reach; they're low-cost methods to boot. Efforts such as creating informative YouTube videos can go a long way in organically driving site traffic via self-selecting consumers.
The effectiveness of in-home means really depends on the nature of the interactions, which I'm uncertain of in this case. If we’re talking about something comparable to cold calls/door-to-door sales, that would be an uphill battle given consumer resistance and the negative associated baggage. with this sales method However instead, if you’re talking about in-home sales/demonstration parties, that can be effective and gives you a grass roots base that can be expanded on through added benefits such as positive WOM. A big key here will be sufficiently incentivizing hosts and presenters and still making a profit.
Anyway, these are some initial thoughts. Thanks for taking the time to read through my response. I’d of course be happy to discuss these topics further if you’re interested.