Archive for October, 2009
We have been live for just about a month now and have been working on the execution and improvement of our marketing plan along the way. Like many other entrepreneurial ventures we have a very limited marketing budget so we built our plan around the assets that we do have; man hours (both mine and interns), a decent understanding of social networking, and a relatively decent network.
For this post I will give a brief update/rundown on our online advertising plan.
We advertise online through Google and Facebook. At the beginning we used FB only because we were able to find an offer giving a free $100 trial (you can get it here). Unfortunately we flew through the $100 with very few conversions. We ran about 15 different adds and there did not seem to be a lot of rhyme or reason behind which of our adds received impressions. We targeted the same people and bid the same amount for each add and 1 or 2 would get 100,000 impressions while the others would get around 100.
FB was not a total waste and we still do advertise with them. It is very good at targeting specific demographics and we did get some good early visibility for scrubadoo.com. Additionally, people seemed very willing to sign up for our scrubaclub. These new scrubaclub members provide us with email addresses and have displayed obvious interest in our product (both good signs). This has also expanded our marketing list. Overall, I would say the verdict is still out on advertising on FB. Before they become a legitimate advertising option I think that they need to add more transparency to how their advertising system works and tracking systems for the results your advertising dollars provide.
We also launched a rather large Google Adwords campaign (and a small Adsense campaign with this blog, feel free to click a link to the right!). As you would expect words like “scrubs,” “nursing scrubs,” etc are all extremely expensive to advertise on.
Which brings me to an important point that I think a lot of companies ignore. It is extremely important for every company to pay attention to the financial portion of advertising on Google, no one can stay in business losing money. Sure you can get millions of impressions and clicks by being the top bidder, but you need to calculate what the value of a click is for your company. What is your conversion rate? Of those conversions how many will come back and purchase from you again? Will they tell friends? A “B-School” term for the answer to these questions is what is the “life-time value” of each of your customers. No matter what you call it, these are all questions you should ask yourself when determining how much you should bid for words (or spend on any type of marketing). What is great about Google is that you can track all of these things and drill down much further than you can with more traditional marketing options. Moral of this story: use the free information and don’t overspend for your advertising.
Our campaign is still very young so we don’t have enough information to draw any statistically significant conclusions. There are a few things I am sure of though. First, it is much cheaper to get impressions on related websites (through other peoples Adsense accounts) then it is through search terms. Unfortunately, to this point those adds have been less effective for us. It does make sense though, people who click Adsense adds do it more on a whim, while if they search for a term they are closer to a purchase decision.
The second thing that I am sure of is that conversion rate is key. We are far below where I think we should be and we need to get better at it. How do we do this? Great question. I don’t believe our pricing is an issue. We are working on ease of navigation, product selection, and a few other areas that may be the problem. We will see how these changes effect our conversion rate.
Google is a proven advertising entity and every company should leverage the tools that they offer. Even if you just use there free analytics program. It will provide you data that can really help you improve your business. Just one last quick tip. If you are paying for a hosting service they will more than likely offer a coupon for a free $50 or $25 dollars of advertising on Google. We use Blue Host and they offer the free add money and every penny counts!
Until the next installment,
We have been live for about three weeks now and these three weeks have been the most agonizing weeks I have experienced thus far in my quest to start a successful company.
Up until this point every second I worked had a very definitive result and pushed us closer to our goal of launching. All my work was directed towards getting the website live, getting us to the point where we could finally start bringing in revenue. In the very early stages I could see, track, and measure my effectiveness and progress. The last three weeks, not so much. It has become incredibly difficult to see what, if any, progress I am making with my sales and marketing strategy. Things are no longer just in my hands. People need to start buying from you. They now have the power.
When you get to the point we are at now, you can work your butt off and see minimal results. Then you start questioning everything you have done. Why aren’t clicks converting to sales? Why aren’t we driving more traffic to the site? We are asking for feedback, if people aren’t happy why don’t they tell us? All of these thoughts will inevitably go through your head at some point. It becomes difficult to motivate and persevere.
What is the saying…Rome wasn’t built in a day? As much as you want to say “forget that” you need to keep perspective. These questions your asking yourself aren’t a bad thing (I think you should be constantly evolving) but you need to stay confident. Entrepreneurship is the most difficult undertaking I have ever experienced. It is surprisingly lonely, everyone is constantly questioning you, your decisions, and your company. If you don’t have thick skin and a natural confidence you can easily be flattened by the pressure and criticism.
You just have to keep pushing on, lean on those few people who support you or who have been through it before. You are doing something that A) very few people will ever have the balls to do, and B) Something that you should be passionate about.
I recently read a great article. Check it out here:
I know this has been a little while coming but I think I am finally at the point where I have a little time to write more frequent posts. Before, I start part 2 of merchant services, I would like to mention that we have added some add’s to the blog so if you see anything you like please feel free to click through and help support the us.
OK, on to merchant services. In my last post on this topic I spoke about the steps it takes to set up an account and what the value chain of the industry looks like. This post is specifically about fees. Everyone who accepts credit cards hast to pay something (even Target and Walmart) but you can do several things to help minimize your costs, even as a start-up. How do I know this? I know because A) I used to sell merchant services and B) I just went through the process of setting them up. Here are a few steps to take to minimize your costs:
- First understand your busienss. Specifially, what will your typical ticket size be Vs. how many tickets a day will you process. This element is key because every merchant processor is going to charge you in two ways; 1st a per swipe transaction and 2nd a % of the total bill. They dont advertise this, but merchant processors are willing to negotiate prices on both of these cost elements (i.e. charge a smaller per swipe for a higher % and vice versa). This is why it is important to know your business. If you do very few swipes but have large ticket sizes you are better off with a low percentage and a higher per swipe charge. If your company does a lot of volume with small ticket sizes then you would want a little higher percentage with a lower per swipe (scrubadoo.com for example). The better the idea of what your transaction size and volume will be the more optimal your fee structure can be.
- Ignoring their publicly advertised pricing, look for a few processors that you are comfortable working with. Research the company, how they do business, even ask for client references (people you can actually call). Just like every other part of your business do your due dillagence on your merchant provider.
- Once you have identified your top two or three choices for providers contact them and ask them for a quote. Make sure you tell them what you are looking for in pricing (remember you know your business better than they do and they can taylor thier quotes to what you specify i.e. small per item and high %). It is also important to take into account the equipment you will need. If you are an e-commerce site you will need none. But if you have a brick and mortar shop you will need processing equipment. The newest wireless technology can be close to $1,000 for one machine. It is important not to ignore this aspect of pricing. Once you have the quotes in hand you hold the power in the relationship. You have choices and all of the processors want your business.
- Again, ignoring pricing, decide which processor is your top choice. If your top choice also has the best pricing you are done (although it never hurts to tell them you are looking at other companies to see if they will throw in free equipment etc). If they are not the lowest, tell them. They will likely ask for any lower quote in writing. Give it to them. Most companies will at the very least match competing offers, more than likely they will actually beat competing offers.
- Now you have your preferred vendor at the best pricing you could have hoped for.
- Re-visit your account at the very least annually, see if your pricing is still ideal for your company. As you grow don’t be afraid to renegotiate. The bigger you are the more valuable you are to your processor.
That is my breakdown on merchant services pricing. We are currently using Authorize.net as our gateway and BB&T for our processing. If you are in a region where you can use BB&T give them a shot. They are very good at both service and pricing.
So we have officially launched our Google Adwords and Facebook marketing campaign. Both have been running for about 10 days now and they have been the source of both some good information and some frustrations. We have had a heck of a time trying to get adwords and analytics tracking conversions properly (this will eventually be the topic of another blog post).
The first 5 days after we started paying for advertising we didn’t have a single sale. Needless to say I was extremely nervous, upset, worried, and many other words you can probably imagine. Fortunately, on Wednesday we finally got our first sale from someone that I didn’t know. Talk about a relief! We have had sales in 2 of the last 3 days as well and I am at least relieved that so far we haven’t had any major issues.
I talk about wins sometimes and every company, person, team needs wins sometimes to keep moral up and keep you pushing forward. These first few sales have been that win that we needed at scrubadoo.com to rejuvenate the motivation.
All of you can help us move forward keep telling anyone you know about the site!
Until next time,