Case Study: Music Discovery & Hit Prediction App

A developer creates an app where you can guess what music will become popular, and get rewarded with early access to cool music. How can the app get traction?

May 10, 2022

Case Study: Real-World Business Goes Virtual

If you’re offering a service in the “real world” and ever wanted to take it online or create an app, this case study is for you. This offline service business is creating an app that can revolutionize its business. How do they launch and make the switch?

Transcript:

Raj: Hi there. I’m Raj Jha, I’m here with Hannah Mears with another case study. Today’s case study is great if you’re offering something in the real world and do you ever want to take it online or create an app? So there’s so much to think about when you’re thinking about a real-world service and transitioning it online. So in this case study, you hear about such a situation, what they’re doing, and some of the questions that they’ve got around that. So Hannah, tell us a little bit about the profile, of this company and what they’re trying to do.

Hannah: Yeah. So for any of you out there who are like me, and their guilty pleasure is binge-watching HDTV. And then thinking you are just like them, it can decorate your own house or office space or dream bathroom and kitchen. This one’s for you because if you’re anything like me, you actually can’t and you need a lot of help. So with that being said, Raj, our profile today says, “We’ve launched a service that can help you decorate your home in a cost-effective way. It works like this first, you choose your budget and decor preferences. What you like and what you don’t like. Then we give you a list of matching items from budget-friendly retailers like Ikea and CB2. The situation is right now, we’re offering this as a service in Portland with the five contract designers. But our real goal is to make an app that does this.”

“Currently we do a fixed design fee, but growing the business has been slow. The idea is to help people on a budget, decorate using the app and collect affiliate commissions from retailers whose products the app recommends.” I think this is great so far. I think it’s something that’s very attractive to people. The app seems to be something like we’ve talked about much before of this virtual reality experience that people are now expecting, but Raj, your first initial thought, when you start hearing about them wanting to create an app for this. What do you think the market is like for this?

Raj: It definitely seems like there is a market for this. So you talked about your HDTV guilty pleasure. I know my older daughter is always on this app called “Design Home,” which she’s like, “Look, I decorated this.” I don’t find that interesting. But then again, here I am, I just paid a decorator to help decorate part of our house. And she’s absolutely fantastic, she’s amazing but the bills certainly do add up. It is not inexpensive to do it. So I think there is definitely a market desire and there’s definitely a price gap that could be arbitraged here between hiring a professional, which can cost thousands and thousands. And someone who wants might want to kind of, sort of do it themselves and maybe even thinks they’re enabled to do it. So I think there’s definitely an opportunity in this.

Hannah: So the question that they have for you is, “So far we’ve done okay. Promoting our service locally on the fixed design fee, mostly by advertising on Yelp and partnering with apartment rental agents to refer us business. When transitioning from a service to an app, will the same promotional approach work or do we need to try something different?” So I think what we’ve talked about when we think apps really can work, but Raj, what they’re asking you and your initial thought on this is when they’re transitioning, will this approach work?

Raj: Yeah, so it might work. I will talk about petty more details as we go on here, but really it’s a different business. And I think that’s something that people have to realize when they’re transitioning from something in the real world. So they’ve got, I guess they said five designers and they’re actually working on a design fee. Let’s pretend it’s a thousand dollars to do your design work there. It’s a very different type of thing. What I’m thinking is, I have a person I could call and they’re going to help me and walk me through this kind of thing. That’s a different experience and a different value proposition than an app where it’s pretty anonymous and there’s just something you download and you’re expecting to do it more yourself. So I think it’s a very, very different business model, with very different price points. The good thing is you can leverage your expertise because I bet they would have a lot better knowledge than I would create, if I was creating that app would be pretty helpless. So they do have some expertise. They do have clients that they can use to help refine this concept. But this is my initial impression. It is a totally different business and you have to call it for what it is

Hannah: Before we get into how they should be promoting this app. Something that you were talking about was maybe the personal connection that they already have with some of the people and clients that they would be bringing in. How important do you think that will be to still be accessible on their app? Because we have talked about this before. People like to feel like they’re going to VIP when they’re coming and subscribing to your app and downloading, and just choosing you as opposed to maybe a big retailer. So how important do you think it is when they’re creating this app to keep in mind that they need to stay as personally connected with their clients as possible through this app?

Raj: I think if they haven’t developed it already, there is this evolution that they can go through, which is essentially enabling their current service with an app. And then just using that as a way to get customers and service their existing customers. And then slowly deciding how we transition that to take some of the heavy lifting done by people and then turn that into algorithms. So in the beginning, it might be just using the app to take a bunch of pictures of your space and it gets sent to the designers that already exist. So they’re using their existing infrastructure without having to develop too much code. And then over time, they can say, “Oh, okay, once you load the colors and what you need, all these other things, then it can start recommending things on an automated basis.” So there is a world in which they slide into it without having to do kind of this wholesale launch of the thing and it’s fully baked for.

Hannah: Yeah. And I think what Raj was also saying was whatever you have already incorporated into your app, like you were saying, I’m sure they would be sending pictures to designers would then be putting the space together for them, but maybe even have some sort of Avenue on this app where someone could take a picture of their space that they’re looking to design and physically placed items in it that they like and see what they come up with as well. That way they felt like they designed the space themselves in a cost-effective way and have physically already seen the items that they like in that space before they purchase them. That gives those people that personal feeling that they already have. They make them become attached to those items that they physically see and be more likely to go ahead and purchase them straight from your app. So keep these virtual reality experiences in your mind. They’re very attractive to people. And I think it’s a great way to then generate new clients to your business, knowing that there’s already been some success. But you’ve got to figure out a way to first get your app out there before people use it. So Raj, in general, before we get into some specifics, will the same things work for an app as a local business?

Raj: Yeah. The answer is only sometimes. So for a local business apps can enable certain things. So if you’re a truly local business and you’re dealing with things like coupons and reward points and things like that, apps can certainly work. In this particular case, there’s not a lot that is locally relevant. It so happens, they’re important. And it so happens that they’re doing service there because most businesses kind of start somewhere geography-wise and they continue there. But there’s nothing particularly tying them to that area. So in terms of, “Will things work?” Some of them might, and some of them might not. I guess we can go more into detail about Yelp versus the apartment listing agents versus doing paid media, et cetera. But the answer is not always, it really depends on the kind of app and what it’s doing that is relevant to the local geography.

Hannah: So let’s start then by comparing some of those things that you were talking about in terms of promotions they’re using Yelp. That doesn’t sound like a good match for an app-based business, I suppose. But what are your thoughts on that?

Raj: Yeah, not really. With one exception, I suppose that if they were to give this app and it’s a platform and I talked about the kind of evolution concept if you haven’t baked the full-on decision engine and helped people decide on the furniture. If it’s still people based on the backend, you can still do a hybrid situation where a local business in another geography could use your app and get on your platform. It’s almost kind of like a franchising style of the model where you’ve got a brand and it pops up in multiple locations and you do have a local designer who helps you and it’s enabled by an app. There is a world in which that could be relevant, but if you’re really talking about going truly into the app world, then no, that’s not really that relevant.

Hannah: So talk to me then about these apartment rental agents. And does that translate into an app? What are some of the ways that they would be utilized with this promotion of this app?

Raj: We talk about this sometimes, the old school going out there and pounding the pavement and making relationships. So if you do have rental agencies that are of a reasonable size and major cities, it sounds like they’ve had some success locally doing that. So repeat that formula because you can take the pick off the top 10 major cities in the United States and all of a sudden you’ve covered thousands and thousands of units turning over. That’s certainly something that you can do to try and jump-start the app. Now, I don’t know if that’s going to lead to enough adoption. But if you think about college towns, there’s a lot of turnover and people want to decorate or apartment rentals in large cities, some major metros. So definitely, that’s a way to jumpstart it. I think it’s an underappreciated way of doing things in the real world versus jumping straight to paid advertising.

Hannah: Yeah. Login to colleges as well for some of your clients, once you may expand because I know a lot of sororities out there when they do recruitment, they have these big gathering spaces that they decorate like crazy. And if there was a cost-effective way that they could sit there and maybe all come together on this app and decorate it the way that they want to, that may be something that’s really attractive, that if you’re ever looking to expand your audience a bit, that would be the route I would think of going as well. But in terms of promoting this app online, Raj, I think one concern would be, you don’t want this to look like just a game. As you said, your daughter plays, you don’t want this to pop up on someone’s feed and say, decorate your dream home because people aren’t going to want the right audience that you’re trying to attract and do not want to just download an app that seems like a game. So how do they go about, I guess, in the smartest way possible promoting this online?

Raj: Well, I suppose that you have to look at what the audience desires. So the desire of the audiences to have a beautiful home and for times, as we just had, when people have been trapped at home for long periods of time that’s certainly something that they want to do. So if you have to look at that audience and ask the existing customers that you have, why did you retain us, for this personal service that they’re selling right now? So what, why did you come to us? Is it because we’re a better value than hiring expensive designers? Is it because you just wanted to really decorate your home for entertaining, whether it’s because I’m living at home and I need multifunction areas of my own, like, I need the areas to work. And I used to live in areas where the kids were. I think through that, and then think through who are these people, are they college students, are they young newlyweds? Are they people with kids who are these people? And then you can start to triangulate. Well, what’s the messaging that needs to happen around that. So I think that that’s the beginning point for any online marketing or any kind of marketing release, understanding your customer and their used case.

Hannah: What about if they started to try to use some sort of PR to get customers? Do you have an opinion on that?

Raj: I always have an opinion on PR and I think I’ve said before that PR is a great way to burn a huge amount of money. It just lights it on fire and a bonfire. I suppose that people are impressed by being in a magazine. You might want to hire a PR agent and well, what if we get an architectural digest? Wouldn’t that be amazing? Well, guess what, that’s not the right audience for an architectural digest. Well, what if we got into an XYZ magazine or newspaper, the best-case scenario, even if that works, which usually it doesn’t usually have some crummy online placements, but if it works, the best-case scenario is you get a little pop and that’s it, and then it’s done. And then you’re starting from ground zero again, versus having something that’s much more controllable, which is what whenever we talk about demand generation. We talked about understanding your audience and where they are and the ways to get to those a year in control and really going direct to the consumer either on online advertising or having channel partners who already have those relationships. And you can just go directly that way.

Hannah: I think a really smart thing they could do too, is we can talk about, I want your opinion, I guess, on influencers. But if they were going to use any influencers, if you go to YouTube and you look up any type of HDTV type of people, you will get thousands of really popular designers online. They have millions of followers and they’re constantly promoting different types of things to make a cost-effective transformation of your home and ways to get products. I think it could be very smart, but you have to be very strategic about the influencers that you use because they can be very costly as well. Raj, what are your thoughts on the influencer route?

Raj: I think it’s great that you brought that up because I think that influencers are really a good way to do this. Look on Instagram, look on YouTube, find the folks who are doing that “Decorate for Less” silo stuff. There are countless channels dedicated to that and really do outreach. And see, you’d probably have to have the app before you do this, but can you partner with them and have them promote your app? Because I think that this is definitely an underappreciated way of doing things in the app space, but when you’ve got an app space that’s connected with something that people are already interested in the physical real world, it’s a great way to bridge it. And don’t necessarily look for those top-tier influencers. And I think we’ve mentioned this before. Don’t look for the ones with millions and millions of followers. Look for those micro-influencers. Maybe they only have a group of 10,000, 20,000, 50,000 followers, but those followers are highly engaged. That can actually be a really, really good yield in terms of being able to rent their influence in order to get in front of another audience.

Hannah: And they may be very helpful and willing to help you because they’re looking to be one of these big influencers one day. And this is how you start getting different types of people reaching out to you to promote things it’s exciting for them. It’s what they do. They want recognition as well. But Raj, I know we’ve covered a lot of ways that are pros and cons of how they can promote this app in some. Give them just a good starting point of what they can take away from this.

Raj: Well, I think that the big starting point is to realize this is a completely different business and decide, are you going to jump both feet into, “I really want this to be a standalone app that does it something, it is a different business”, or are you going to evolve into it and use the app as enabling what you’re already doing and growing it that way because those are two different business models. One is backed by people and the other one is backed by technology and in terms of how it’s delivered. So I think that that decision is a very important one. We didn’t have enough information on the original profile that they gave us to know which direction they were thinking, but very often people think, “Oh, I’m going to do this app and it’s going to be great.” And that’s fantastic because the app has a huge scalability potential in order to get thousands and thousands of people.

But of course, your revenue is probably going to be small and it’s a different marketing process to get to those people. Or do you want it to just blow up your existing business and use that as an enabler? I think that’s the first decision. And then that decision will drive how you get to market. Whether or not it’s getting more online advertising because it’s an app and that’s really how you’re going to drive it. Or if it’s enabling your person to service, that might just be a different route, might be partnering with other designers locally. It might be those rental agencies, et cetera. So first decide where you’re going and then have a disciplined way of getting there. So I think that at this highest level would be my take on it.

Hannah: Well, hopefully, we’ve answered some of your questions today. If you have more, please feel free to submit them to us, but also go check out our recent videos before this, because we have talked a lot about virtual reality experiences, app generation. So maybe some of your questions have already been answered in some of our earlier videos. Raj, thank you so much for your insight into our client. Best of luck to you as you move forward in this home decor experience.

Raj: Thanks, everyone. And see you in the next case study.

March 23, 2022

Crash Course: How to do YouTube Advertising

Raj and Hanna uncover what you need to be successful getting started with YouTube advertising

July 22, 2021

Case Study: Bad Website Drives Customers to the Competition

How serious should you be about great website features? Very, as this case study shows. This company has been losing a ton of business to the competition.

July 2, 2021

Case Study: Local Direct Mail for Services

If you’re trying to figure out marketing, it’s not always obvious what’s the best way to go. This company is using old-fashioned direct mail – is that a mistake?

April 26, 2021

Case Study: Marketing a Beverage on Facebook

Food & Beverage is a tough industry with tight margins. How can they successfully market on Facebook?

April 21, 2021

Case Study: Preserving Grandpa’s Business

When inheriting his grandfather’s western bootmaking business, the demand generation needs a re-boot. How to respect grandpa’s legacy, but get new business in the door?

Transcript:

Raj: Hi there, RajJha with Hannah Mears and we do case studies. Today’s case study and this is yet another one, is all about branding and marketing, and demand generation. But it’s a really interesting one because what if you have a high-end brand and in this particular case, what if it’s been around for a while, what’s the best way to do that, to preserve some history behind the brand and also kind of bring it into the modern era. Hannah, why don’t you tell us a little bit about this company and what they’re trying to accomplish, and let’s see how we can help them.

Hannah: Yeah. So this is sort of a family business here, Raj. So maybe there are some emotions playing into this. So if any of you are out there and you have this big family business that you’re looking to update advertising while keeping some of the sentiment, this could be for you. Our profile today states, “last year I inherited my grandfather’s boot-making business. He grew a small Western boot maker into a mid-size shop over 30 years. We make custom-fit cowboy boots and ropers. We have 50 employees who I grew up with our family. We have a loyal customer base where we keep their boot fitting on file. And when they order, we make custom-fitted and designed boots.” I already love this so much just because I think it’s a really unique business to have and we see it’s a long-term thing that they’ve built.

So for our previous case studies, it could take 30 years and that’s okay. But their situation here Raj is grandpa didn’t do much advertising. He grew the business by making the most incredible products and getting repeat orders who refer more business. However, many of these customers are aging and ordering less, and we aren’t getting a lot of new customers to replace them. I think that’s probably a problem that a lot of older businesses are running into. Now, the question is that I have taken brains. Our client says, “I want to start advertising. We don’t want to go to the mass market. We want to keep making high-quality, custom products in grandpa’s tradition, but we need to expose new people to our company. What kind of advertising should we do?” So, Raj, your initial thoughts I want to know is they have a brand with repeat customers for over 30 years, which is really impressive. And it’s what I think holds the heart of a lot of these smaller homegrown businesses. And it sounds like they have this winning pretty high-quality product. So what do you think?

Raj: I think it’s fantastic. And really the question is because they talked about it a little bit in their question, which is how do you bring this into the modern era? You’ve got this 30-year business with a lot of existing relationships, but some of those folks are getting a little old and maybe they’re not going to be ordering as many boots. So I think it speaks to the quality and the delivery that they can have. But that’s just part of the situation here because a lot of businesses, particularly family businesses grew on this notion of quality and repeat business. But when it comes to the modern era where folks are looking more online, et cetera. So the referral from someone’s mom or father or grandfather as a customer is not going to count for as much. That’s not where they’re going to get their information. So I think it speaks really well to the delivery of the thing. And so making that kind of the kernel of what goes forward is going to be an important part of the strategy here.

Hannah: So clearly grandfather didn’t do a ton of marketing advertising. His product kind of spoke for itself. This is a lot of that old-school mentality. So when you’re looking to get into the advertising world of today and what you may need for business, what’s a realistic starting point?

Raj: Well, with a realistic starting point you have to take a step back and say, well, what do I have? What do I have to work with? Because you could say I’m going all-in with all the new digital stuff, but let’s look at what’s worked in the past and then ask yourself, how can you take, what’s worked before this referral component and work with that first. So I would first dig into that more before thinking about all the new tangled things you could be doing. I think that’s my first tip.

Hannah: So could you elaborate on that then? What do they already have that they can be pushing out there? Just elaborate a little further on. If you think that’s a starting point, give them some tips on how to start there.

Raj: So they’ve got business by referral. They know that works. But if they’re like 99% of the businesses that work by referral, they’re just waiting for the orders to come in. So Bob has always ordered a new pair of boots every two years, like clockwork. And maybe that’s on average, that’s now getting to three years on average getting to four years. So the question is, can you do something that’s not just waiting for the order to come in? Can you actually orchestrate the referrals and can you send something to Bob that says, “Wouldn’t it be great to order yourself a new pair of boots for Christmas?” Do you have their birthdays on file? Do you know their spouse? So you can hint to him, “Hey, Mary Bob’s birthday is coming up. Don’t you think you’d love a new pair of custom boots?”

So it goes from being passive about referrals to being active about referrals. It’s repeat customers and referrals. Who do you know who might like this? So it could be something like if you’ve got someone and you know that they could be a grandfather. Maybe they want to gift their son, who’s now an adult a great pair of boots. Get them to start on their first pair of boots, get them on file with the company. So think about, can you just turbocharge that repeat order and that referral business in the first instance, because that’s the thing that works.

Hannah: So make sure you exhaust every possible resource with your current audience that you already have before expanding out. Let’s say they take your advice and do that Raj. What would be the next step then they’ve already reached out to Bob about his birthday and the holidays and his family and B and C. So they’ve done all of that. They’ve covered that area. It started to work. Now they have to be proactive about the next step. What would that next step and possible advertising be?

Raj: Well, the next step is really taking what’s made this company special over 30 years and taking it to the world because what you don’t want to do because they said they’re not really interested in mass advertising. So I don’t think the right thing would be, to go and start advertising. Here’s a boot and just sell it to Google shopping or something like that. That’s not really what they’re talking about and not what they’re doing. So really it’s looking at the company story. Can you create a story out of this and start telling more people about that brand? Because you can reach people who are interested in cowboy boots, ropers, what have you. The story would resonate with these people, but you have to package up that story. So I would say start doing some more research on why grandpa started it? What were the first few years? How did he grow the company, get people involved in that story? And then you’ll take that into your marketing because the brand is about creating that story in someone’s mind, and then associating a goal. You know what, “I’d love to be a part of this.” So I think that’s step one.

Hannah: Is that how you make sure you don’t lose the quality and what the historical approach of your business has always been in approaching advertising and the storytelling mindset is that how you make sure that you never lose what grandpa builds?

Raj: I think it’s a huge part of it because also they don’t want to become a volume player. They want to stay in this more custom realm. And if you’re going to do that for someone to buy into something, that’s probably much more expensive, that is custom. They have to know the story. So it kind of goes hand in hand. You’re telling the story, but that means you’re also attracting the kind of person that will do that. And it’s, frankly, you’ll be able to get more money, higher margins from telling that story and selling that story than you would, if you just said, “Here’s a boot.” So I think that that’s, that’s part of the whole thing. So at the very beginning, we talked about, this is a case study about if you’ve got a high-end brand in high-end brands based on a story. They are based on the brand, having some value that’s apart from the thing itself.

Hannah: So let’s also talk about the location of why this product could be sort of unique in a way because you also have to think about, who’s wearing boots, where are the people we’re trying to get to? And a lot of the times when we talk about advertising, we talk about tactics as to where to advertise. So what makes this particular case study unique about where they should advertise?

Raj: Well, I think it’s unique in terms of geography. So what you want to do is look at their current customer base and where are they?. Very often it will have started in a few pockets. Maybe they’re in one location. And 50% of the business is within a certain radius of that area because they became known there. But then again, you don’t have this information, but maybe grandpa went to a bunch of rodeos and they went across, maybe went to Texas, they went to California and they went to all these other places. And that’s a very common thing for these bootmakers. They would show up and they would do fittings and sizing at the rodeos and they would take that back and take orders that way. So they’d have these little geographic areas. Think about, again, we, and you, and I say this all the time. What have you already been succeeding with? So maybe it’s going after that audience and making sure that they know about you because those events, for instance, or those areas already have it as part of the culture. So I think it’s using that and using that information in order to, again, double down on what’s already worked.

Hannah: And Raj, let me add in a little bit of my expertise, just from personal experience here with this location. My younger brother is involved in four H and he shows animals and all of those little boys grow up, but they need the boots. All of the little girls need the boots. Everyone involved in walking around that weekend has boots on. That’s what they do. And as these young kids are growing, they need boots a bit more frequently than your older clients do.

There are booths set up at all of these local fairs for a bunch of different things you could do. If you could offer your product there, give the customer a fitting physically right there, you’ll be able to also pull customers off the street and say, “Hey, I see your boots are looking a little worn down, come look at ours. Here’s what we have to offer. Here are the discounts we can offer. Here’s our story of what makes us unique, and maybe you have a similar story. Maybe you were showing animals because your grandfather is. Well, I’m selling boots because mine is.” Make those connections. As you said, that personal connection is what they already have. So when you’re going to rodeos and things also consider all of your local forage, that’s a younger audience as well. And then you’re branching out without even really having to change the trajectory of your entire audience. So in my garage, that could be a great place to start and location.

Raj: Exactly. And can you get the whole family involved? Because, ultimately if you’ve got a size on file that works really well for the adults in the house, but for the kids, they’re going to be constantly upgrading until they get to that fixed size. So I think, can you get the whole family involved? I think that’s a really great way of doing it. I mean, it’s a generational thing.,

Hannah: Right? And then you’re bouncing ideas off their younger audience of what do you want to style the boot now? What would you be wearing? Then you’re just reaching so many different platforms at once. You’re taking care of the advertising, the selling, and now you’re looking ahead to the design of your product as well and what’s making it unique and making it work. And then that takes us into why your product is better than your competitors. So Raj, in terms of getting them to stand out from their competitors, how do they market their product ahead of their competitors? Like, let’s say the area or the Tony Lamas of the world who are already really successful in the realm of boot making.

Raj: I think it really comes down to the custom aspect of this. That’s the game-changer, because if I go and tell you about that area, “If you go there, they have a bunch of styles and no doubt that they’ve optimized those styles for the taste of the season.” But it’s very different when you go to a custom boot manufacturer and you look at it, you see the variety that some people want, completely different kinds of things that you would never see anywhere else. In my head when I’m thinking about, “How do you do this?” It’s actually showing off the creativity of your customers. And it’s showing that in the context of the quality and how soft are these boots? Like you barely need to break them in. What are those aspects of it? So I think I’m really leaning into the fact that it is custom, the fact that it is a fit, and the design. Because folks love to design things themselves. I mean, if you go fast forward into the digital realm, everyone’s designing various skins and things like that. And there was a period with custom sneakers where all the rage and people are going overboard on that. It’s really the same thing, but this is the same thing with tradition. So I think it’s even more impactful.

Hannah: Yes. And maybe when you’re visiting these rodeos and forages or wherever, you may go, you have select iPads or something sitting right there where your clients can come up. These young kids would love to sit there. And like at Nike, for instance, when you said shoe customization was possible, they could sit there and physically design their own boot and it would be guaranteed in a few weeks to be right at their door. Then they already feel comfortable. They’ve talked to you, they’ve asked you the questions. They wished they could ask the computer and they drew their product up for themselves. I think it’s an awesome thing. I think starting with honing in on the audience though, as we talked about, if we back up, make sure you’re taking every step possible to overexpose the audience you’ve already had to your product. Make sure you exhaust that before you move forward. But I think they’ve got a really great thing on hand. Raj, what do you think?

Raj: I think that’s the core. Like the double down on the history, double down on the unique aspects of the product, and do that first. And then once you’ve done that because that’ll go a long way. Then you could look at doing all the new tangled things we talked about in other case studies, like going on Instagram and showing off the designs. Starting the YouTube channel, which may be talks about the manufacturing process and the 30 or 50 employees that they have, which are like a family, and show the backstory of it. So it’s all around the storytelling and using new media to do that, to expose new people to it. But really it’s all built off the backbone that grandpa made. So don’t lose that. And that’s actually going to be the key to differentiating,

Hannah: Hey, out here in Western PA, I respect tradition. I respect farm work and hustling. I get it. My little brothers were involved with it. My family respects it. We have a little farm ourselves. So trust me, I think it would be successful out here. We really hope our advertising tips and tricks will help you only grow what grandpa started even further for generations to come. I love generational businesses. Raj, thank you so much for your insight today. And I look forward to seeing where these boots could go and whose feet fit them on.

Raj: Exactly. I might have to order some. All right, Hannah. Thanks. And we’ll see in the next case study.

April 9, 2021

Case Study: Expanding by Opening New Locations

This case study covers how to expand into new geographic areas – whether as a new owned location or if you’re franchising.

Transcript:

Raj: Hi there I’m Raja. And welcome to another case study. I’m here with Hannah Mears and Hannah, we’ve got an interesting one today. Something useful for anyone looking to make their demand generation more predictable? So what’s the case study we have today?

Hannah: Yes. So Raj, today our profile says, “I run a mobile windshield replacement business. If your car has had a broken windshield, instead of going to a glass repair shop, you can call us and we’ll come right to you. We successfully covered two cities in Arizona. Now with that being said, the situation is because we’ve been successful in our locations. We want to franchise our concept across the US. Currently, most of our businesses come from Yelp. We don’t pay for Yelp ads. We are listed there and get our business from people searching for windshield repairs. We probably also get some business from Google, my business listings, but we’re not sure how much.” So before we go any further to dive into this talk about how different franchising can be, because that’s something we really haven’t talked a lot about yet.

Raj: That’s true. Franchising, if you’re not familiar with it, is you make a template business. And it’s a business that you’ve got working in preferably multiple locations already. Usually, you don’t want a franchise if you’ve just got one up and running. And then you’re essentially cloning the business and having other folks buy into it. You become a franchise holder and you own the brand and some rules around how they use the brand and you give them a template for opening a business. It’s actually for the franchise buyer, a fantastic way to kind of be a pseudo entrepreneur because they get to own their own business, but they’ve all of the frameworks around it. In this situation, we’re talking about this windshield repair business that sounds like they’re successful in a couple of locations in Arizona. They want to offer other people the opportunity to do it in other cities. They can open it up for States, it doesn’t matter. But what’s the good takeaway from this, whether or not you’re a franchise owner or whether or not you were a franchise operator rather, or whether you’ve got a multi-location business. The important thing to take away is what we’re going to talk about is relevant whenever you’re opening up another location. So Hannah, do you think that I do that description, Okay? Does that all make sense?

Hannah: Perfect! So anyway, we’ve dealt with people wanting to relocate or come internationally, but now we’re talking about franchising. So a bunch of concepts is being covered, but the question is directly related to our windshield repair business profile that we have right now. They said, “When we start franchising, we’ll need to help the franchises generate new business. What’s the best way to do that? Should we just give up? The Yelp listings or is there something else we should be doing?” So this will apply to any, like you said, multi-location business, including franchises in particular. How do they need to start thinking about generating new business for new locations? That seems like kind of a hefty task to take on. Am I right?

Raj: Yeah It is. Because if you just set up the new location and you don’t do anything to generate business, how do you know what’s going to come? And that could be a big die roll. And now this is a mobile business. So maybe their infrastructure cost is less. And they’ve got a truck instead of having to open up a physical location. If you’re opening a physical location, certainly a big investment. You’ve got your rent or your mortgage. If you’re buying a location, you’ve got an outfit, everything. You’d have to hire staff. So there’s a big investment and you want certainty. The key to this in any new location is a process. Especially in a franchise because a franchise is a template and the process is important. And in fact, demand generation is perhaps the most important part of that template.

Obviously, you have to have customer delivery and you have to deliver the service or the product. But the important thing is that you can actually get customers to it or else the whole thing just doesn’t work. Now they’re doing Yelp. And one of the things with organic, which is so they’re not paying for Yelp ads, they’ve just got a Yelp listing, is you don’t know what’s going to work in the other locations. It might have been that they were early on Yelp and they happen to do well in these two locations. And they’re another franchise location that will be competing against a whole bunch of others and they won’t be so successful. So the key is really to be programmatic. So to have a program that can be duplicated to make everything predictable because, predictability, predictable sales, that’s, what’s going to be the determinant of successful failure.

Hannah: But predictability, that’s kind of a strong word we’re using here. Predictability and creating customers sounds like a fantasy. Yes, we can predict exactly who’s coming. We can look in that crystal ball and see what customers we’re going to have, but is it a fantasy to some business owners, or is it actually attainable? You tell us, Raj.

Raj: That’s the million-dollar question for everyone, right? Can I have predictable sales? What I will start by saying is that if you’re using a traditional approach, it’s usually, or often is not the best route and often fails. If you’re not tied to real numbers and here, we’ve got this particular case study, they’re using some online marketing methods, but they’re all organic. And they clearly don’t have numbers because they’re asking the question and they don’t have certainty around it. What I will say, what will not work is if you’re really just focused on PR or image marketing, ego marketing. A lot of the old-school stuff that you see I’ll hire a PR agency, or I’ll do one big event as a launch party, or I’ll just have an ad that’s got the name of my business and really it’s about the ego of a business owner rather than driving a result.

Those are usually, especially with today’s online marketing, destined to fail. And then the last part to address this one is you can’t succeed without all of the elements. Any demand generation initiative, they have to know how to do the creative, the media buying. You have to do the media planning and without all those things working together, you can’t have predictability. So really getting all of those elements together to get predictability and not just randomly doing actions that are hoped for results. You can make it predictable. So the answer is yes, you can, but you have to have all the elements lined up and not just view PR or ego-based marketing.

Hannah: Yeah. And in a perfect world, we’d love to do all of this absolutely unflawed. Go through it with perfection, but let’s revisit the theme of this question. What are some of the big mistakes people make when trying to open a new location?

Raj: Yeah, the biggest one is they’re relying on the location. And obviously for anything physical, if you’re doing a restaurant or something, location does matter. It absolutely matters, but the location is not going to be the sole determinant of whether you succeed or fail. And so you can’t blame the location. If it fails, you have to look at the totality of it. That’s one thing, but what have you done again, programmatically from a marketing perspective to generate demand for that location. You’ll want to test it and you need to test before you open. Even before you opened the location, have you done a few test marketing pieces? See if people are responding or getting there before you’ve made a big investment. And have you controlled variables? Because if you’re testing a new campaign, you’re saying, “Oh, I gotta launch this new location. And now I’m going to try this new campaign with a new location.”

Well, wait a minute. If you’re a good scientist, you don’t want to test multiple variables at once. You don’t want to test something, that’s a new location unproven. You don’t own how the market is going to react to a new campaign. So new campaign, creative, you haven’t used it before a new audience. So all of those things now you don’t know which one is working and what’s not. So what you want to do is a test on existing locations. So almost pretend like you’re going to launch your existing location, see what the response is. And then you have a benchmark. Now you’re opening up a new location. You’re not going to make those ones.

Hannah: It’s like going back to fifth-grade science class never took more than one variable. That feels like right here. But it’s important to have this system for generating demand. How did they go about choosing how to advertise? Because that’s something that’s a little different in itself.

Raj: Yeah, it is. And how you choose to advertise. It’s going to be based on what you’re advertising and to whom. So you can’t just use the same hammer for every single nail. You have to look at it in this case, we’re advertising something, which you don’t know the customer in advance. And there are several kinds of businesses like that. For instance, a locksmith, you can’t predict who’s going to get themselves locked out of the house. So it’s very hard for them to do anything other than a certain kind of advertising because you can’t do a direct mail piece unless you’re nailing everybody. So in this case, we’re dealing with a windshield repair. Now, it would be great if we could predict when we’re going to have a broken windshield so we can plan for it. But as we all know, we can’t do that.

So you can’t target based on many other things that some businesses can target based on age or gender or location or stage of life and things like that. Here, you can’t really do it other than it’s someone who has a car. You have to get really one of two choices: you can do brand and really just dominate an area or a group of people. And they’ll just know you to think of you when they think about this problem. In this case, if I need my windshield replaced. And that’s one, it’s just to dominate the brand. Well, the other is search because when someone has this problem, they’re going to search for an answer and they’ll either get it from their insurance company, like provider referral, or they’re going to search for the solution online and perhaps get it reimbursed by the insurance.

So here, we really need to make that choice. And it’s hard to do that without knowing the economics of the business and how much profit they’re pulling in and how much they can afford to brand. But it’s either going to be regular Google ads because that’s someone’s searching. So, you know if they’re actually looking for the thing well, or serving YouTube ads based on search queries, or they’re going to have to dominate an entire area with branding ads, which is way more expensive, but it can work. So it really one of the most wonderful, it depends on answers.

Hannah: Yeah. You mention something, the target audience. And I think that’s something we’ve talked about in just about every single profile we’ve done because that becomes a huge aspect when you’re looking to rebrand or relocate, whatever it may be. So when you talk about the term targeting, there’s also retargeting, and I know you’ve touched on it, but can you just describe a little bit more in-depth what that term means and how it’s an effective business?

Raj: Yeah. Great catch there Hannah, because retargeting is a key part of this. So retargeting is when someone visits your, let’s say your website or watches a video online, you can advertise just to the people who have made that first visit or made that first click or watch that video. And why that’s really interesting is for any advertisers not doing it, it’s essentially these people already have intent. So if they’ve gone to your website because they want X, Y, or Z, you know they’re interested in it. And then if you’re advertising, re-targeting those people, you know that there’s a higher likelihood that they’re going to convert to customers, or if they’ve watched the video of yours, the clue interested in the subject matter. Then you can follow up. So some of those profitable campaigns you can run are actually not targeting new people, but are retargeting people who you know are considering your product or service.

Hannah: So overall though, it doesn’t sound like it’s a great idea to launch a new location without nailing down how it will get business 100%. Is that correct?

Raj: That is correct. So you need certainty to launch without a really well-defined plan that has got some data behind. It would be a big mistake. So you definitely want to nail that demand generation plan before launching a new location.

Hannah: So overall though, how long will it take for them? With demand generation programs, How long will that take before they can launch this new location? Is there a certain process they should be following when doing that and thinking about it?

Raj: Yeah. I think the important thing to realize is this is not about time. And I know business owners are thinking about time because maybe they’ve got debt service that they have to take care of and things like that. But ultimately if you’re starting from cold, like this particular case study is to try to predict how long it’s going to take would probably be a mistake because what they want is a certainty. So if anything I would recommend taking the time it takes to get this certainty about if you’re putting a dollar in, are you getting more than a dollar out. What are the results, testing it with current locations so that you know, “I can get the following results when I launch.” If you do that, if you launch before knowing that, or at least having a decent amount of predictability then really it’s, you’re risking the entire new location, not succeeding. So it is about predictability. That’s the important thing. And could it take months? Yes. Could it take years? Maybe. If you’re really focused on it and you have a good team, you should be able to do it in shorter than that. But ultimately I would say, go for certainty rather than time as the measure of when you watch that next location.

Hannah: It seems as though the theme here is to be predictable because it’ll pay off. The last thing you want to do is spend so much time on something that it fails. So make sure your time is being used effectively and efficiently, and it will pay off. Because also, the other thing you don’t want to do here is rush something, and then you have to go back and fix it all again. So Raj, your overall main point that this company, this windshield business needs to take away in order to start franchising.

Raj: I would say slow down to speed up. So really slow down, be disciplined about the process of understanding demand generation, know your numbers. If you’re not marketing folks, get marketing help from people who understand how to put together that campaign creative and the media planning and the media buying to actually make it successful. Test on an existing location, get some baselines, and increase your confidence in this. The very fact that you’re asking this question is a good thing, but it also speaks to the fact that maybe you want to nail this down a little further before making a huge investment whether it’s a franchise or an owned location and making a big risk. So definitely slow down to speed up is my general advice here.

Hannah: Hopefully the next time my windshield and my car is cracked. This is who I will be calling based on all the wonderful knowledge and insight that Raj and I have delivered today. Especially you, Thank you so much, Raj. Thanks for everyone tuning in. Again, if you have questions, concerns about your businesses, how you can grow your dreams, your plans, your fantasies, let us know, and we can help you get there. Thanks so much!

Raj: Until next time.

March 17, 2021

Case Study: Subscription Service Markets to Enthusiasts

Raj and Hannah break down demand generation for a meal prep subscription service that caters to high-performing individuals. How can they grow profitably and smart?

Transcript:

Raj: Hi there! I’m Raj Jha. I’m here with Hannah Mears. And if your business could benefit from generating demand from enthusiasts in the market, then this is the episode for you. We’ve got a really interesting one here. So Hannah, tell us a little bit about what this company is, what they do, and why enthusiasts can make a difference for them.

Hannah: Listen, we’re all enthusiastic about this concept. Let’s be honest. This is about food. And so our profile today states, “We created a food delivery service that will meet your goals. Whether you want to lose weight, gain muscle, do a recomp or stay the same, just give us your age, height, weight, and the body composition that you want. We’ll create and order meals for you, which are delivered from a regular delivery service, such as Uber eats or Postmates. Just rate your meals, your hunger level, after eating and do a weekly weigh-in and our algorithms get smarter about sending you great meals that get to your goals. The situation is we originally developed our service for athletes who need that convenient meal, that will speed up their performance goals. What we realize is many people who aren’t professional athletes are looking for meals, solutions that are convenient and will keep them performing their best in everyday life.”

Raj, my first instinct, when I hear this is I think we’re on the right path and sort of moving away from just solely athletes. A lot of athletes perform at a high level and have nutritionists. They have people every day encouraging them what to eat. Sometimes they even have personal chefs. I think it’s really smart for them to just reach out to a more basic average audience looking for a healthy lifestyle. Also, people like you and I, for example, who may have busier lifestyles or multiple jobs at once, maybe we would like something where we don’t have to prep our meals all week, but they’re coming to us. They’re fitting our health needs and we don’t have to spend all the time cooking and preparing, and then you’re still on that healthy track. I think it’s something I’d be interested in not being an athlete at a high level or at any level for that matter. And I know so many people right now who love to meal prep, love to be healthy. And if it was delivered to their doorstep, I think it’d be very attractive to them. What were your initial thoughts when you heard this?

Raj: Similarly. We do use a meal delivery service, but it delivers the prepped meal. The thing about me is I hate the chopping and the measuring and all of that stuff. Like I literally don’t mind putting the meal together and doing all that stuff, but I do like the fact that in the service that I use, it comes to me in the components. Because then I can look at it and say, “Okay, what’s really going into my food.” And that really makes a difference because then I can think, “Oh, these proteins are going in here, et cetera.” Now with this, they’re even making it easier, which is going to be healthy. It’s going to be balanced. I don’t have to be looking at each ingredient and doing those interim steps myself. I think it’s a great idea. Like you said, a lot of athletes do have nutritionists start. It sounds like they’re starting out there. They already have athletes in their customer base. But like you said, I think expanding this to health-conscious people, which is an ever-growing ever-expanding market is a fantastic idea.

Hannah: Yes, the quicker, the easier, the faster, the healthier, the better for everyone. And like you were saying, those meals coming to you already free preps are what is really attractive to everyone now. So if they can take this a step further and prep it for the whole week, I think people are really going to buy-in. The question is here. “We currently work with trainers and sports teams and want to expand our customer base to performance-oriented individuals outside of athletes. Everything from fitness enthusiasts, to business people who want to be at the top of their game. What’s the best way to advertise directly to consumers and acquire customers like this?” So we’ve got a company Raj that has proved successful in a really niche market and is expanding from there, which is smart. We always talk about, find that niche, find what you can center in on at once, find your target and then expand. It’s something we recommend all the time, but what should this company do to leverage as much as possible from the early success?

Raj: And you’re exactly right. They have success and we want them to leverage that success. You really have to look at what’s working. Instead of reinventing the wheel and saying, “Okay, right now where we were with athletes, and now we’re going to go with executives.” Instead of doing everything from scratch, really look at what resonated with the original audience. So survey your original audience whether it’s trainers, whether it is the athletes themselves. What was the reason behind it, what was the thing that really appealed to them? Was it the convenience? Was it the price? Was it the fact that they have this algorithm that they mentioned, which will make it better and better? Is it the fact that there was feedback and having those; did you feel full, what did you think of the meal? What were the aspects of that? And then you can try to map that onto the other audience because that way you’re at least starting with something proven instead of just making it up when you go to a new audience.

Hannah: Yeah. Take advantage of what you already have right in front of you, that saves you an entire step. We always preach that when we have different types of businesses like this, but they were really specific in wanting to advertise directly to consumers. We’re often talking about channel partners, but here they’re really focused on just direct marketing. Where should they begin on which platforms for this type of marketing?

Raj: That’s a good question. We also always have to remember that there are two kinds of marketing. There’s organic, where you’re just posting things, hoping people see it, and influencer, and then there’s paid marketing because they said directly to consumers. I’m really going to focus on paid marketing here because I think that that was the intent behind their question. But I think it’s anything where they can tell a good story. This is a health and fitness style thing, but it’s not something you can really easily explain right away. It might take a little paragraph. This description that they gave us took a little while. So you need to tell a little bit of a story. I’m thinking that the good kinds of things for them might be YouTube advertising, where they can tell a story and they can show some of the results and they can show some testimonials, that’s one way of doing it. Facebook, likewise, could work. A lot of health and fitness is sold on Facebook. You have to be a little bit careful there because Facebook does have a lot of rules around making claims. They don’t want you making exaggerated claims of anything. And a lot of folks in health and fitness get shut down because of that. But they still could work as well. So Facebook, Instagram is one, but really I think YouTube is something to really look into for them.

Hannah: I think that’s a good way too, because the most commonly searched thing on YouTube is “how-to,” and you never know how many people are searching, “how to meal prep, how to eat a healthier lifestyle, how to eat like athletes and train like them.” So you never know your ad to permanently fit in just right there. But what would these ads look like if we’re going to get super specific about this? Is it best to just tell the consumer what they’ve got or sort of taking a different approach?

Raj: Yeah. So a lot of heads are kind of like, “Here’s my thing, here’s what I got.” And then it kind of just leaves it at that and leaves it to the consumer to understand whether or not they want it. I think that’s missing a lot. I think what I really want to discuss is something that we haven’t actually paid a lot of attention to in detail, in these case studies, which is education-based marketing. And that is teaching someone, obviously in an interesting, and in fun, engaging way, but teaching someone about the benefits that they would get from using your product. So it’s one thing to teach about the product and say, “I have this thing.” It’s a whole another thing to teach about, “Here’s the healthy lifestyle that you want, here’s who you could be. Here’s how you can achieve what you want to achieve. Oh. And by the way, in order to do that, you need X, Y, and Z. And we are a part of that formula. Here’s how we’re going to help you get there.” So that education-based marketing is actually for a more complicated product or service like this is really a good way to go.

Hannah: Yeah. I think just even educating people on things about their lifestyle, ask those questions that make them think, am I this person, do I need this? Would this help me? What step of my day would become easier by utilizing your product? I think that’s a really great thing. I like to look into those things with products. And when it comes down to it, I always narrow it down that way. Where is this making my day-to-day schedule a little bit easier? But are there things that they should set up early on so that they’re maximizing their efforts in the long run?

Raj: Yes. And again, we’re hitting on two things, we didn’t talk about a lot in other case studies. I think we should talk more about retargeting. So retargeting, I think we mentioned in at least one other episode, but for anyone who did not watch that, even though you should. It is the process by which if someone visits your website or maybe they watch your video, you get to send them another ad. An easy example of retargeting is, you go to Amazon and you put something in your cart and then you wander away. And a day later, these ads start appearing all over the internet. It’s like, “You want the shoe? Wait, I just put the shoe in my cart. How does it know? Is it stalking me?” Well, yes, it’s stalking to you, that’s called Retargeting.

It’s creeping you around and studying your behaviors and then they’re serving it to you, but they can use it in many different ways. And especially here, when we’re talking about video marketing. You can tell a story, both on YouTube and Facebook. This is very easy to do where maybe you had the first video and it tells the story about it and gives them some education, but they’re not quite ready to make the jump yet. So they clicked to your site and they didn’t do anything. And they clicked away. Well, then you can serve them the second part of the story, which goes into more detail, maybe has some more testimonials. And you can string these things together so you can tell a sequential story and that’s called retargeting. So it’s taking someone who’s already engaged with your ad or your website and sending them more information via another ad. It’s a super-powerful way. In fact, a lot of advertisers don’t realize this, but for many products, you don’t make money with the first ad. You, in fact, lose money with the first ad, but retargeting makes so much money that it makes up for all of it. This is not something you’re familiar with. It absolutely makes sense to get very familiar with retargeting.

Hannah: So get comfortable. Don’t get afraid right away because it doesn’t work. But like you said about retargeting, I can’t tell you how many times I’ve searched something and then found 9,000 things all over my social media platforms that are related products somewhere else because of one search. It’s a very smart way, in my opinion, it’s working, it’s out there right now. Take advantage of it. But in terms of campaigns, what types of campaigns should they run to push this product?

Raj: Yeah. Once they’ve identified the advertising, again, education-based marketing has identified that someone is actually interested in this so you don’t want to do this to everybody. But once you know someone’s interested in a healthy lifestyle, they’re interested in eating better. A great kind of marketing that you can do is challenge marketing. You’ll see this in a lot of the folks in the weight loss industry who have done this a lot. And some in the fitness industry as well, which is a 90-day challenge to lose this much weight or gain this much muscle or what have you. Here we have an ancillary, which is a product that’s made for people who want better performance. So can they do something like that? Have a contest of some sort and pick some winners.

And that’s a really great way of getting a community-engaged with it. Getting people engaged with like, “Yeah, actually I do want people performing with best in 90 days. I’d love to do that.” “Okay, great. What do I have to do?” “Oh, I just have to take a trial to the service.” “Okay. Well, I’ll do it. I’ll give it a shot for 90 days and I’ll see, maybe I can convince some prices, et cetera.” So think about a challenge or contest marketing as a way to get engagement and adoption and introduce people to the product.

Hannah: And something I definitely want to talk about though, Raj. We always say, “Here are things that can help you do better. Here are things that can help you achieve your goals.” But something we always like to do is caution people. Let them know what you need to be careful about because you can get really caught up in the process of becoming this big thing and forget the little things that can come up along the way. So in your opinion, what do they need to be careful about when they’re trying to expand?

Raj: I think that definitely, it’s a delivery question. It sounds like they’ve got some technology here that’s going to be recommending meals to eat, but let’s also remember that they’re not creating those meals themselves. So unlike the, I guess the blue apron or the hello fresh, which actually has a warehouse and they’re shipping you the ingredients. These folks are partnering with restaurants that are being delivered through Uber eats or Postmates. So what’s happening is they’re coming up with meal plans and they’ve got the customer interaction, but things can go really wrong if the restaurant doesn’t prepare it right. And let’s just take a doomsday scenario that the meals just don’t show up or worse yet they show up, but the chefs are actually putting in way too much oil and people are going to get super fat in these meals.

So, for reach doesn’t show up, so they really have a delivery issue as well. They have to think about delivery and scale. Let’s say you do this challenge and it just totally blows up. And they’ve got twice as many customers and they’re scrambling around to find new restaurants. Quality control, because this is a subscription service. You want people to come back again and again. And if they have a bad experience, they’re going to talk about their bad experience with their friends. I think really having a lot of attention to the delivery that the last mile that goes into the true customer experience is going to be super full.

Hannah: And I think that a lot of that goes into just being really careful where you’re starting to expand as well because I know where I’m from. We barely even got delivery services because we live so far out in the middle of nowhere. The last thing you want to be doing is trying to connect with just about everyone and then getting yourself, like you said, in a pickle with not just how the food is being prepped and delivered, but where it can be going and who has access to this. So keep in mind, I think I agree with you completely, that the delivery process is just something that they should really be super cautious about. Raj, your final thoughts, just give them a starting point just to make them feel a little bit better about this expansion.

Raj: Exactly. Well, I think the starting point is telling your story. We go back all the way to what we recommended at the beginning, which is to understand what makes your service unique and special, your current audience. Then map that to your next audience and then run some tests. Now you don’t have to do it, even though we recommended this kind of contest marketing, it doesn’t have to be huge. You can pick a small target. Maybe it’s a geographical target. You’re in New York City. You already have the infrastructure in New York City. Don’t go beyond that. And just by the budget of your advertising, only advertise to half a million people thinking that, “Okay, Oh, that’s half a million people, maybe several hundred customers will come out of it.” Just figure out what the numbers are. And don’t worry about getting too big, too fast.

Just proving it out in one location where you have all your other ducks in a row and then prove out, “Okay, well, what does it cost to acquire a customer? How long do they stay? What do I need to do to keep them engaged? What kind of community do I need to build?” I think those are the questions to ask and really just think about it that way. When it comes to expanding all of a sudden in a big way, that’s a different question. And that’s a question for after they’ve proven it with this new customer base.

Hannah: Tell your story, make it personal. We love hearing all your stories. We also love when you submit us profiles like this, where we can help you become the best that you can be. Possibly check out our other videos. We may have answered some other questions that you have along the way, but feel free to continue to submit to us questions as well. Raj, thank you so much for all of your insights, and best of luck to our client. As you strive to make the world a healthier, better place.

Raj: Thank you so much. See you next time.

March 12, 2021

Case Study: When Competition Eats Your Lunch

When a retailer of kid’s playground structures is getting crushed by the competition, they’re not sure where to begin. Here’s how to quickly take the lead.

Transcript:

Raj: Hi there! Welcome for another case study today, we’ve got an interesting one. And you’ll find out, it was a little personal to me in terms of my experience with a certain kind of vendor. I’m here with Hannah Mears and I am Raj Jha. Let’s talk about brand and demand generation, and we’re doing another case study. Hannah, what can you tell us about this really interesting provider?

Hannah: This one’s fun, especially if you have some kids or if you’re a kid at heart. Let’s go ahead and dive in and figure out what this case study is about here. They said, Raj, “We build custom backyard, swing sets, and play structures. Customers can customize a play structure based on what they want. Adding slides, monkey bars, rope swings, and the like. We do a custom design for them, get it approved by the customer, and then deliver them the parts to assemble in their backyards. We also offer an assembly service that about a third of our customers take us upon.” This is a swing set company. Essentially, they’re building your dream playground in your backyard. Raj, what’s your personal experience with this?

Raj: Well, my personal experience is I ordered exactly one of these about 12 years ago and went through the process of “Wouldn’t it be great to have this in my backyard? What would my kids want?” And that is I’ve gone through the entire buying process and have experienced it from the other side. So I’m excited to see how they’re doing it and what some of their challenges are. Because as a consumer, I have personal experience in addition to the business context.

Hannah: Maybe you’ll get to see then what their situation is and the impact that it’s having on their company. And from your experience, maybe some things along the way that you would have said, “Hey, maybe this company would have had this, my experience would have been way smoother.” Their situation is “Right now, we’re mailing catalogs to a 50-mile radius and have a website which shows all our parts. Customers go to our website, fill in a form with the parts they want, and then we call them and talk to them through the design process. Often customers don’t answer the call and don’t call back. Nearly all of our business comes from the website forms.” Raj, this may be taking it a little off the path, but something that concerns me with this is why do you think customers aren’t calling them back?

Raj: If you think about the journey of the customer, I’m going to take myself as an example. I’m really excited about this black backyard playground. And I have some questions and I’m thinking, “Okay, I’ve seen their catalog online. I want to order the monkey bars on a slide, and I can see that. And then I have to call them to start the discussion, a very traditional consultation for what is this thing going to be?” And so, I submit a form online and they’re going to call me back. And in the meantime, what’s the next thing that will happen? Well, I’m going to keep on looking, are they the only vendor I’ve called them once? I’m going to keep ongoing. That’s kind of what part of the journey is. No wonder, they’re not really getting a callback, or Pete folks aren’t answering because they’ve moved on. They’re losing a lot of folks in that, at that point.

Hannah: Yeah. That makes sense. Maybe instead of a traditional phone call now that we’re all masters in zoom and Google meet. Maybe offering that face-to-face feature anytime you can get someone to look at you and know exactly who you are behind the business. Maybe that personal connection, they’ll be afraid to go with someone else because they’ve already seen your face and met you. But let’s dive into a little bit of how to fix the sales problem they’re having Raj. So it says, “Our sales have been flat this year, even though more people have been home due to the virus. Our competitors have huge demand because parents are looking for things to do at home with their kids. I’m not sure why we’re getting lost. Why are we getting less business?” They’re getting lost in the process here. In terms of customer experience, I think that’s the main thing we want to hit on first. What can you tell me from the perspective of a former customer that you would be recommending to them in this situation?

Raj: Yeah. I think the first thing that they have to realize is there are a lot of suppliers. It’s not just one provider of this and a lot of them will ship pretty far. I mean, I can’t even remember where ours came from, but somewhere in the Midwest and I’m on the West coast. So they’ll ship all over the place. You’re competing against a relatively large pool of competitors. And really the experience is a core differentiator. What’s the experience someone’s going to have to bond to the potential customer to you. It’s great that they’re calling customers. As you mentioned, Hannah, zoom, or anything that they can make a personal bond with is a great thing. But what I saw and even this was many years ago, what I use, was the ability to design it yourself a little bit online.

The final design can’t be there. But there was a little program and you could drag over this tower here and then put a slide against it and you could visualize it. That’s pretty important because instead of the, “Oh, I’m going to submit a form and wait for our call back.” Now I’m already engaged and I’ve built something and there’s a building tool and I don’t want to save all this hard work where I’ve just assembled this thing and I’ve shown it to my kid. And she’s really excited about it. All of a sudden there’s that kind of ownership bias almost that you feel like it’s already yours and you’re investing in the process. I think that’s one of the pieces that are missing compared to a traditional catalog or static website.

Hannah: Yeah. Show it to a kid, is definitely the best way because once kids see something, they will pester you until it is in their backyard. Kids do not give up. Maybe if you’re on that face-to-face call and someone’s drawing it up for you potentially have them bring their kid in, because I guarantee you that kid’s going to say, “Yep, this is the exact one I want.” But Raj and I are huge fans of this virtual reality experience. And I think we’re fans of it because that’s really what the future I think is going to be for just about anything that you can think of: business, sports, entertainment. There’s going to be this VR type of experience with it. Something that I’ve noticed recently with a lot of construction and design is looking at different houses. My boyfriend and I came across this site that actually showed you could design the house based on different cabinets. They offered countertops, couches, colors of walls, tiles, and backsplashes. You could put it all together right there. Then it would become your home later. If we had not already had our heart invested in something else, this would have been something we would have really considered. So this is awesome. I think the virtual reality experience, if you’re not taking advantage of it, now, is how you get the leg up on your competition. Do you agree?

Raj: A hundred percent agree. And at least we’re saying it’s the future. At least with these particular competitors, it’s the present. We already have to realize that for a lot of industries, it’s already there. If your industry is going there and some competitors are there, it’s time to catch up right quickly. And if your industry hasn’t gone there, being the trailblazer, there’s a real benefit to being the first one to plant the flag and start doing that.

Hannah: Yeah. And I think what you were saying too, is when you’re actually building these structures and putting them together. Maybe make it even easier to make sure that like you were saying, it wasn’t the exact outcome. Find a way to make it the exact outcome so that the customer feels that this product is unique to them. Everybody likes to say they have something different. Ironically, they could design something exactly the same that their neighbor did, but because they felt like they had a hand in the construction process, they felt unique. They want everyone to come to see their new playground. And then once everyone sees it, they’ll be talking about you and you’ll generate new eyes for sure. But Raj, something else that stuck out to me, and I know you probably feel some way about this. Catalog sending out catalogs, how effective do you think that method is anymore?

Raj: Well, it can be. Actually, the surprising thing about direct mail of any sort is that our inboxes are relatively empty because, for those of us who are ancient like me, and can remember 25 years ago, our mailboxes will be stuffed full of catalogs and flyers and all kinds of direct mailers. And now, you will still see big brands doing catalogs. In my household, the athletic catalog will come, the land catalog will come. And these are thick. Every year, the restoration hardware comes and that thing is massive. It must cost a huge amount to print it. Do you think these companies would really continue doing that if it didn’t work? So it does work. It can work. You just have to be very thoughtful because you’re spending a lot of money for that catalog space. In this particular case, we know that they are getting some sales. It’s flat, but they’re coming from somewhere so that might be a contributing factor. I wouldn’t be too quick to pass judgment on those old media if it still could be working.

Hannah: Yeah. Not passing judgment at all. It’s just one of those things you don’t hear a ton about sometimes at these new businesses. And I know for my parents personally, they’re generations, everyone loves to flip that catalog and find something. It’s a safe way. So for people who may not love the technology side, your company is also offering them a safe way to find something that they love. With that being said, Raj, “Yes, the catalog method is great.” We talked about different ways. They could be displayed online. What are some other ways they could get more leads?

Raj: Getting leads for this particular kind of thing. Actually, it’s a little easier than for some other kinds of businesses because the buyer already knows they want it. Your kids are getting to a certain age and you want to give them something in the backyard and you see your neighbor might have a swing set, and you’ve heard about these things. You’re going to be typing into Google, “backyard play structure.” One of the simplest forms is Google advertising, keyword advertising. It’s very old school in the online sense, but just running ads to those keywords and showing that you offer this kind of structure. Now, the one caveat to that is I would not do those ads and run them to the old website because we know that the website is leaking visitors already. But if you do have that kind of interactive design and add that feature, then I think it would be great to run ads to that. Get people involved in the process. It’s just another way to generate more leads.

Hannah: So you’re saying they have to create possibly a new website to start bringing in these other unique features.

Raj: There’s an argument whether it needs to be new, or you just need to add that feature front and center. Because it can be a little interactive feature that can be added to the current website. I haven’t gone in-depth and looked at the website, but it’s something where you can have this little thing that pops up and design your own. Then it takes them to a separate area of the website. It doesn’t have to be a complete rehaul; the feature just needs to be there. It needs to be prominent.

Hannah: And this is something they can do themselves?

Raj: This would be a little harder to do themselves. That kind of development of that feature my guess is that if you’re really good at running a background play structure company, you’re probably our coder. That’s the kind of thing you’d probably have to have hired out. In terms of the Google ads portion of it, I personally find Google ads a little bit more difficult than Facebook and Instagram. Can you do it? Yes. But in terms of the kinds of folks, you can get to help you with that, there are a ton of contractors out there. The Google ads platform is very mature and it’s pretty inexpensive to get somebody to manage that for you. That’s definitely all something they could contract.

Hannah: All great things for this company so far. But Raj, they do have another question for you. The main question we need to cover is, “I’ve let my marketing person go because it seems like he wasn’t doing much other than hiring an SEO person and managing the catalog and website. There wasn’t much to show for that $50,000 employee. I’m just not sure what to do next.” So I guess the question they’re asking is, “Should they hire?” They mentioned they let the marketing person go, so do you think they should hire another one? What are the steps they need to take?

Raj: If you’re thinking about return on investment of that budget, you’ve got a budget of 50,000 that they’re comfortable spending on lead generation and turning prospects into customers. And I think the best use of that $50,000 would be don’t hire someone right now. Use that budget to create that little feature on the website, that interactive feature. Because it’s going to cost a bit to develop that and then use the remainder of that budget to do paid advertising. I think that’s a much better way of using those funds and then getting to a point where it’s just kind of running on its own. You know that this is working, sales are starting to take off, and then you can say, “Okay, I now know that it’s working. I can stop the experimentation phase and now I need to stabilize. Now I can hire a marketing person. It doesn’t have to be a terribly senior marketing person at this stage in the company’s growth.” Then they can manage it from then on. But I just redeployed that money towards those projects. I think that’s the best bang for their buck.

Hannah: And I think that’s a very good point to make Raj. You’ve mentioned so many different things here. We’ll get to summarizing everything for them in a second. But something that has been in the back of my mind that I can let go of is; I have a bunch of baby cousins. And the swing set that I had when I was younger was just a swing, a slide, and a little thing on top. And that was pretty much it. I’ve been buying blown. I guess you could say how many features can be added to these playsets. Now they’re essentially in a kid’s paradise. I would definitely tell you as well if you want to be the company to stand out, go directly to these kids and ask them, “What would be your dream playset to have? Because I guarantee you it’s very different from just the traditional swings and slides anymore.

I mean, these kids want rock walls. They want rope swings. They want steering wheels. They want pirate ships. There are so many unique ways that you can make your product stand out. It doesn’t have to be traditional and maybe don’t let it age out. Make it something that these kids can use as they go into their teen years. Don’t just focus on these kids being that age range to seven. I know it’s important to find your target audience, but maybe being able to tell parents, you talked about the bang for your buck. This could be something that your kids enjoy through long years of life as well.

Raj: Exactly. And I’ll just throw one more other things in there. So we had the play structure and then we did move. Now my kids are older and we bought the world’s largest trampoline for our backyard. I mean, this thing is literally massive. It takes up like half of our backyard. But let’s remember where we came from. We came from that play structure. Anyone who buys a place structure is probably going to want a trampoline or something else in five to seven years. So could you become a reseller of trampolines? Can you use your customer base in other ways? There are so many other things that as the kids get older, you could offer an existing customer base that could radically expand the revenue potential.

Hannah: Yeah. Could your slide go directly down to the trampoline? We are thinking outside the box where you can make your product as unique as possible. As Raj and I bounce our ideas for our dream, as we’re going back into our kid years, maybe you are saying what we would have loved Raj from the business standpoint. Please go ahead and summarize exactly what this company needs to keep in mind to move forward.

Raj: Okay. It’s actually pretty simple. Really. You have to pay attention to the customer journey. What’s the experience and how do you engage them as early on in the process as possible. And get them really bonded with you. That interactive experience is key. You’re doing a great job with calling folks up and having that conversation, that consultative sale. That’s fantastic. Just to engage them earlier on in the process. Once you fix that piece because you’re already getting website traffic. Once you fix that piece, you should see an improvement in sales, and then you can say, “Okay, now can I lead generate? Now, can I go and actually pay to get some clicks from Google for folks who I now know will be sent to a sales and indoctrination of a few processes, which is going to successfully convert into revenue.” So I think just one step at a time and it’ll definitely work out.

Hannah: Baby steps. No pun intended at all. Thank you so much for sticking with Raj and I. We’re helping our clients through the situations that they’re going through. If you have something similar, please make sure that you’re staying tuned in to what we have coming next and go back and watch the previous videos because maybe we’ve already answered some of your questions. Thanks for tuning in with us.
Raj: All right. Thank you. Take care.

March 5, 2021

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