Know your customers I: Segmentation

This article kicks off a new series of marketing and sales tips. Subscribe to our blog or Twitter feed to receive future installments.

I earlier wrote about the Revenue Typhoon where the secret to generating revenues is creating an end-to-end integrated marketing and sales process. This Know Your Customers series will show how that happens.

The more you know about your contacts, prospects, and customers, the better you can tailor your messaging, communications, and products to increase sales. One technique is segmentation. There are many ways types of segments. The key is finding the ones that naturally divide your prospects by person and company and enable more targeted one-to-one marketing.

Typical B2B segments include:

• Location
• Industry
• Market
• Professional
• Organizational title

Segmentation is developed at the beginning of marketing and sales planning where your Market definition describes a target customer. If you don’t have a formal marketing plan, take your best shot and define one. Then look to your actual customers. You may find reality different from your original customer notions. If they diverge, update your target customer profile to match who actually is buying your product.

Tool tip – use WeMeUs Contact Management and Lead Generation.  Learn more about WeMeUs tag and group management so you can store segmentation data on your leads and customers.

Business shrinks to nanoscale

Caroline McCarthy writes Why the social-media aggregator has croaked. Their downfall was inevitable. It’s no different from the roaring 90’s boom.  A grand slam like Twitter inspires thousands of innovation-less entrepreneurial marketers and developers.  Pop tech media celebrates the new and hip.  Investors get infatuated and pile on.

The business is exposed as a technology with no market. A few lucky ones flip their ventures to the big boys.  And everyone scurries like cockroaches to find and gush over the NEXT big thing.

This market froth will be repeated ad infinitum. The online sector has entered an unprecedented era of computing abundance.  This is similar to the record industry 15 years ago when technology from MP3s to the web to P2P pried open monopolistic content scarcity and destroyed mass media.

Open source, APIs, high-level development platforms and databases, the cloud, and free services combine to not only make it easy and cheap to create an app,  but also lower the competitive bar to virtually nil. You no longer need a company with several employees and a mil in the bank.  Individuals and partnerships , not companies, can and are creating valuable services.  Look no further than the wild success of numerous iPhone developers.

And we can help.

Entrepreneur: The American (and Global) Dream

Entrepreneur/academic Vivek Wadhwa writes Can Entrepreneurs Be Made? Based on his research, the answer is a clear Yes.

His focus is on the lemming-like fallibility of investors.  But don’t let that cloud the real news.  It’s the confirmation of  the American dream … and the Indian dream … and indeed the Global dream.  You CAN start your own high-growth startup.

You don’t have to come from a family of entrepreneurs or have a personal history of starting your own businesses.  But you do need to have a scalable idea, commit yourself fully for a few years, and be or become an expert in your field and business.

That’s exactly what we’ve been committed to the past five years.  We now have multiple to ways to help.

• Personal Consulting.  Our staff provides direct coaching and consulting, from raising money to building your business. Contact us to learn more.
• Group consulting. The Tribe Blue Business Accelerator combines group facilitation, coaching, consulting, and accountability with a structured goals and commitment program.
• Networking.  Meet other entrepreneurs MORE effectively … at LESS cost … in LESS time with Hardcore Networking.
• Roundtables and Seminars. Join DallasBlue Entrepreneurs.

Here are the first two paragraphs from the article.

Silicon Valley investors often have a picture in their heads of the type of person who is worthy of funding: young, brash, stubborn, and arrogant. They believe that successful entrepreneurs come from entrepreneurial families and that they start their entrepreneurial journey by selling lemonade while in grade school. Angel investor and entrepreneur, Jason Calacanis said as much in his recent talk to Penn State students. And after meeting Wharton students, VC Fred Wilson expressed shock when a professor told him that you could teach people to be entrepreneurs. Wilson wrote, “I’ve been working with entrepreneurs for almost 25 years now and it is ingrained in my mind that someone is either born an entrepreneur or is not.”

Jason, Fred, and Silicon Valley VCs, I’ve got news for you: you’ve got it all wrong. Entrepreneurs aren’t born, they’re made. And they aren’t anything like you think they are. My team surveyed 549 successful entrepreneurs. We found that the majority didn’t have entrepreneurial parents. They didn’t even have entrepreneurial aspirations while going to school. They simply got tired of working for others, had a great idea they wanted to commercialize, or woke up one day with an urgent desire to build wealth before they retired. So they took the big leap.

Printing Money – The Revenue Typhoon

At Tribe Blue and our on-on-one consulting we teach that building your business is a process. Strategize, plan, execute, measure, and reload. Generating revenues is the same.

Sales consultants like to talk about the funnel. A bushel of leads enters the funnel. The leads are winnowed after qualification and prosecution until only a few exit the funnel as actual sales.

But the focus on a funnel is short-sighted. Let’s say you’re the guy in charge of sales. Your goal is 10 sales this quarter. You’re damn good and know that you can close 20% of qualified leads. Marketing generates 50 leads. So you’re set, right? No. That’s a separate funnel. If 20% of gross leads are qualified, you can only expect 10 qualified leads and to close 20% of that, or 2 sales.  Marketing actually needs to generate 250 leads for you to make quota.  Uh-oh!

Tactical funnels don’t exist in isolation. There are a series of operational marketing and sales funnels that encompass and qualify markets, prospects, leads, and accounts. Indeed there is one huge funnel that stretches from mass markets of tens of millions of business or consumers customers to the individual customers that trickle out the other end.

When you build a manufacturing plant, you don’t just engineer one machine. You design the entire layout, including machines and production line, from raw materials to finished product.

It’s the same in marketing and sales. Each step in the master funnel must be managed to ensure maximum sales. We call it the Revenue Typhoon because it’s the secret to printing money.

Free travel! But is it smart marketing?

Suddenly I’ve received and see a score of free travel deals.  That’s free for qualified buyers, of course.   Typically two days and nights, including airfare, lodging, and meals, with a conference, networking, and one-to-one meetings with sponsors.  That’s one way to bag a qualified lead. I’m waiting for the Hawaii offer that applies to smart-ass consultants who don’t live on a coast.

Sponsored executive trips, often oriented around golf or a cruise, have been around for decades.  What’s new is that the trip offers now have multiple sponsors to share the cost and blatantly advertise in mass media.

Does it work?

It’s tough to find a prospect in a recession.  Marketing is producing fewer leads.  You quantified the results and noticed that it’s actually costing hundreds or even thousands of dollars for a qualified lead.  Why not just cut out the marketing in the middle and pay for the leads in a sponsored meeting program with free travel?

My gut is that it smacks of desperation. Marketing from market validation to lead management is a process that can’t be short-circuited. Didn’t your mother tell you there are no real shortcuts in life … or business?

Freebies mask intent and corrupt results, especially when you’re talking about a $1,000 trip to hot sunny Miami to a bored buyer stuck in blizzard in Rochester. I wonder how truly qualified these leads are.  Be sure to include a huge fudge factor in your budget.   That said, the math may still work in its favor.

What do you think?  Have you tried it and how has it worked for you?

Marc

You’re not AT&T & I’m not Obama

News the past few weeks from the private and public sectors share a common theme. On the industry side, in my blog I wrote “The only technology sector where prices go up …” about AT&T and the other telcos still playing the old monopoly shell game. Whether it’s a fake price war or shoddy service, that kind of manipulation of brand, press, and market is fading into the past as communications is increasingly immediate and universal.

In the public sphere the Democrats shockingly lost Ted Kennedy’s seat. In the short space of a year, a President and a party that soared through the polls have been slapped back down to Earth. The swing electorate swung back. The people were speaking and those that did not hear suffered the consequences.

Business today is transparent and real-time. The information revolution has brought down entire industries from recorded music to print advertising. Even Google is throwing in the towel and adding Twitter and other live feeds into its search results. Markets, customers, and voters are fully empowered.

When billion dollar companies and popular Presidents are dissected and gutted, what chance do YOU have?

What does this mean for your business? What products or services are threatened? What new opportunities does it create? How do you develop a meaningful and genuine dialog with your market? Should you even be in that conversation?

These issues, both strategic and tactical, are ones that we can help you with, whether it’s one-on-one consulting or Tribe Blue for your small business or large company.

Win free ticket to DallasBlue Jan 25 Networking party

Win a free ticket to our party! One random entry will be selected from entries by Saturday 5pm.  There two ways to enter:

1. Retweet our Twitter message “Win free ticket to DallasBlue Jan 25 SaaSy Networking party: http://wp.me/pAEbu-3e @LinkDaddy”
2. Enter online and include WinSaaSParty in the Comments field.

Networking Monday. Our Fat Tuesday networking this month is on Monday, January 25th 5-8pm.   Bring your friends and coworkers. Come relax, have a drink, enjoy great food, win a door prize, and meet other executives and professionals in person ready to learn about and help you!

This month we learn about one of the hottest areas of technology & the Internet – cloud computing or SaaS (Software as a Service) from speaker Rich Chapman of Softletter.

Join DallasBluers like Tom Phillips, the master writer of Effective Agreements, Mark Royal of web solutions provider The Deyo Group, Richard Gonzales of salesforce.com partner Buvelo, and Ike Ahmed with call center outsourcer FSD Solutions,

The party is hosted by Visual Image Fine Art Publishing at  14320 Midway Rd, Dallas.  Early registration pricing of $15, which includes the program, drink, and appetizers, has been extended through Friday.  Get more info or Sign up now at DallasTuesday.com.

The only technology sector where prices go up …

… continues to be mobile phone services that retain extortionary control.  It’s the power of oligopoly at work.  It will be several years before ubiquitous mobile Internet (the grand grand grandchild of WiFi) smashes the monopoly, much like the wired Internet killed the landline phone business.  The telcos that the Feds broke up 30 years ago have  not only reassembled, they’ve transitioned to wireless where they can play the same monopoly game.

The latest tricks include increasing the number of phones that require an expensive monthly data fee, increasing the $175 early termination fee to $350, and sleight-of-hand marketing.   Cnet catches Verizon’s shell game in “AT&T-Verizon price war debunked (FAQ).”

Verizon & AT&T want you to think they’re cutting prices with their new reduced-rate unlimited plans.  But the reality is that many customers already have essentially unlimited calls at lower fixed minute plans due to free minutes for Friends & Family, night and weekend calls, mobile to mobile calling, and rollover minutes.  More people will have higher cell phone bills due to new and added data rates than will save with the unlimited plan.

Blue Entrepreneurs – Building Teams, SaaSy Dallas, Hita Bali & More

LAST CALL FOR SAASY DALLAS. If you are or know a student, or are involved with or interested in SaaS (Software as a Service) or Cloud services, check out our FREE report contest, student scholarships, and startup discount now! The sweepstakes end this week. Register for Monday’s Networking meeting to listen to the research presentation and receive two full months of Softletter.

FEBRUARY ROUNDTABLE. We’re bringing back our Entrepreneurs Roundtable Feb. 9 over lunch. The topic will be Building Teams. Come join us if you need help, have questions, can help others, or just want to network and learn with other entrepreneurs. Get more info & register.

Are you ready to grow your venture or raise money?  Try a FREE Taste of the Tribe on Monday.

Building Your Success,

Marc Freedman

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IN THIS ISSUE

Dallas Entrepreneurs

• Next Meeting - Dallas Entrepreneurs Roundtable: Building Teams
• Blue Events

All Entrepreneurs

• Tribe Alert: Online media help
• Tribe Powwow: Lead Generation
• Venture News & Tips: Build Your Team Sites

• Venture Spotlight: HITA resorts in Bali
• New ideas: Reserve your own table new
• Free Publicity

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NEXT MEETING – Dallas Entrepreneurs Roundtable: Building Teams

No venture is an island. No man or woman can do it all. Angels and VCs won’t invest without a team.

This Roundtable is for all business phases, whether you’re a founder seeking partners or operating business filling key roles.

How do you recruit people?  Where do you find them? What is the right mix of personalities? What incentives can you provide when you can’t pay a competitive or even any salary? In what order should team members be recruited and when? How do you communicate, motivate, and manage team members? If you seek capital, what do funders expect?

Learn and discuss this and more at our Entrepreneur Roundtable!

The Entrepreneur Roundtable is your guide to learning from experts to tune your operations and build a successful business.  It’s an interactive discussion on crucial startup and business topics where we address your issues and answer your questions.

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BLUE EVENTS

BLUE CALENDAR Wednesdays & Fridays Tribe Blue for Entrepreneurs & Business Owners Application required Business coaching, consulting, and accountability that’s powerful and affordable. http://TribeBlue.com Monday January 25, 11:45am-1:15pm A Taste of the Tribe Margarita Ranch at Mockingbird Station, Dallas Get FREE entrepreneur and small business advice. Learn how you can use Blue resources to build your business, launch marketing and social media programs, find new partners, and generate leads. Reservations required. http://TribeBlue.com/taste.php Monday January 25, 5-8pm Fat Tuesday Business Networking and LinkedIn Party … on Monday Presentation “To The Cloud & Beyond: Software Industry Insights” by Rick Chapman, Publisher of Softletter Hosted by Visual Image Fine Art Publishing, 14320 Midway Rd, Dallas http://DallasTuesday.com Monday February 8, 11:45am-1:15pm A Taste of the Tribe http://TribeBlue.com/taste.php Tuesday February 9, 11:30am-1:30pm Dallas Entrepreneurs Roundtable: Building Teams BlackFinn, 4440 Belt Line Road Addison Join an interactive discussion where we address your issues and answer your questions. http://DallasEntrepreneurs.com Tuesday February 16, 11:30am-1:45pm How to Exceed Customer Expectations – Featuring Lisa Ford Facilitator and Speaker Clay Curtis Blue Leadership Seminar Series Swan Court, 1900 N Central Expressway, Plano http://DallasBlueSuccess.com Tuesday February 23, 5-8pm Fat Tuesday Business Networking and LinkedIn Party LinkedinAganza – Program & Details To Be Announced http://DallasTuesday.com

Rick Chapman Clay Curtis

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TRIBE ALERT: Online media help

One of our members is developing an online media venture, including an Internet radio service.  We seek help with a business model and technology.  Please reply if you can help or can refer us to someone who can.

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TRIBE POWWOW: Lead Generation

A common theme for our members is generating sales, especially in a tough economy. The regular sales pipeline has dried up. Cold calling and old school advertising don’t work. Large scale marketing is too expensive.

The solution is relationship marketing and lead generation to create a sales funnel and generate business. When you have a handle on the process and are ready to take it to the next step, look at shrinking the sales funnel from contact to close. Dissect your lead gen process to determine how you can make it more timely, direct, and personal.  Read more at our blog.

Develop a plan to generate leads and more at the Tribe. Get a Taste of the Tribe, learn more, or apply now.

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VENTURE NEWS & TIPS: Build Your Team Sites

In support of our Dallas Entrepreneurs Roundtable: Building Teams, there are a few web sites that do exactly that. They connect technology, design, and business entrepreneurs and experts who seek to start or join a venture.

• Build It With Me
• Fair Software

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VENTURE SPOTLIGHT: HITA resorts in Bali

Visit our free promo page to learn how YOU can be featured!

Blue Entrepreneurs journeys to Bali in Indonesia!

The Hita is a dynamic and multfaceted green property development and resort management company with a primary emphasis on SUSTAINABILITY.  The Hita runs several luxury villa properties throughout Indonesia, including Bali. The company uses sustainable design, sustainable construction, and sustainable operation that is the basis of the Hita philosopy of creating harmony between God, Man and Nature.

Contact Yoshua Daely on LinkedIn, Twitter, or Facebook, or directly via email or +62 811 387 205. Full DallasExecs/MyLinkNetwork profile .

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NEW IDEAS: Reserve your own table

Industry community for kids’ products

Retail / Media & publishing

Based in New Zealand, Skout Trade Fair is an online community that
aims to help those in the children’s products industry find each other
and connect.

Helping media buyers find sellers of alt advertising

Marketing & advertising

DOmedia bills itself as a matchmaking service for media buyers and
sellers. Listed in its database are opportunities to advertise on college
student notebooks, on phone kiosks, on golf carts and in restrooms.

Jackets and bags made to be handed down

Fashion & beauty / Eco & sustainability

Countering the forces of “fast fashion”, British brand Howies is
focusing on the long-lasting quality of its newest clothing line,
appropriately named Hand-Me-Down.

Online practice dispenses self-help physio advice

Lifestyle & leisure

Patients can often self-manage their recovery with the help of some
expert advice. That’s the premise behind a new physiotherapy practice
that focuses purely on dispensing self-help guidance online.

More low-impact branding from Curb: snow tagging

Marketing & advertising

Curb — the media agency that specializes in campaigns using natural
materials — called to let us know that they’d added another novel
medium to their offerings: snow tagging.

Restaurant lets patrons reserve a specific table

Food & beverage

Madrid restaurant chain Wagaboo is following the lead of airlines
and theatres, allowing customers to pick and reserve a specific table
online.

Follow these new ideas and more in Iconoculture and Springwise.

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FREE PUBLICITY

Highlight your venture to 1,500 readers. You can be in Dallas or anywhere in the world. Submit your listing now!

Free legal documents for startups

I’ve been publishing sites with free legal documents for startups at DallasBlue Entrepreneurs.  These have been compiled below. A current list of these docs will be kept here.

These documents are an excellent resource for entrepreneurs to familiarize themselves with what to expect in starting a company and seeking funding.

There is an imbalance in power between entrepreneurs with no money and investors with millions or even billions of dollars.  It’s resulted in agreements with complex terms that give investors great power in the relationship and generate huge legal fees that average $50,000 per funding round.

These documents are typically written to simplify agreements, slash fees, and protect founders.

Note that we are not attorneys and are not providing legal advice. These documents should be used with caution and in consultation with your own legal counsel.

TechStars

Model Seed Funding Documents. Created by Cooley Godward Kronish, LLP. Includes Term Sheet, Restated Articles (of incorporation), Bylaws, Subscription Agreement, and Board Member Election Consent.

TheFunded Founder Institute, Adeo Ressi

Plain Preferred Term Sheet. This doc eliminates aggressive investor terms, such as participation with preferred stock, a 1x liquidation preference, and single trigger vesting acceleration on acquisition.

Wilson Sonsini Goodrich & Rosati

Term Sheet Generator. Generate a venture financing term sheet through an interactive questionnaire. It also has an informational component, with basic tutorials and annotations on financing terms.