Marketing Strategy: Facebook & Google
Posted by Brett in E-Commerce, General Entrepreneurship, Lessons Learned on October 27th, 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,
-Brett
Entrepreneurship….A Test of Patience
Posted by Brett in Brett and Mer, Failures and Frustrations, General Entrepreneurship on October 17th, 2009
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:
http://www.centernetworks.com/your-startup-sucks
-Brett
Merchant Services Part 2
Posted by Brett in E-Commerce, General Entrepreneurship, Start-Up Tips, Uncategorized on October 15th, 2009
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.
-Brett
Sales
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,
-Brett
Live
Posted by Brett in E-Commerce, Entrepreneurship at Darden, General Entrepreneurship, Successes on September 8th, 2009
OK everyone, Just a quick message to let everyone know that scrubadoo.com is officially live! Like always I have been crazy busy getting everything correct and finished. I will start writing regularly again as soon as we get things more stable.
In the meantime tell your friends about the site. You can give anyone the discount code Family&Friends (no spaces) and they will get 10% off their first purchase.
Check the site out and send messages giving me feedback!
-Brett
Everyday is a Workday
Posted by Brett in General Entrepreneurship, Successes on August 31st, 2009
I have learned extremely quickly that when you start your own companies everyday is a workday. I have a lot of catching up to do on blog entries but as much as I enjoy writing about my entrepreneurial experience there are too many other immediate needs the companies have that reallytake precedence. Things are pretty much as busy as I ever imagined and there always seems to be an endless stream of new things that I need to do.
Since the last update we have finished the programming of scrubadoo.com and completed the majority of what seems to be a never ending list of data entry that needs to be done. Selling products online is not as easy as you would think. Every product needs to have unique sizes, colors, descriptions, details, etc, etc, etc. It is extremely mind numbing and boring. But we are almost done.
I will be posting in the next few days about the official launch of scrubadoo.com. Anyone in the Minneapolis area feel free to email me and I will let you know about the launch party that will happen next weekend.
Once we have launched I will try and catch up on all the pointers and tips I have learned the hard way over the last few months.
On a side note The Ugly Dumpling is starting to move along nicely. We have found some space that we are very interested in.
You will hear from me again in a few days…Things are getting exciting.
-Brett
Cart Systems
Posted by Brett in E-Commerce on August 4th, 2009
I know I haven’t finished the merchant services piece yet, but we have been extremely busy with another aspect of the business that I think is good to talk about (besides we have yet to finish setting up the merchant account).
I want to share a little insight in the online retail cart system, what you use to load your products into and have people check out of etc…, that we are using, X-Cart (XC). XC is a very complex system that has taken us several weeks to begin understanding. We are finally at the point where we are starting to get the hang of it.
On top of the standard XC implementation we are having an outside developer make specific modifications that we think will help differentiate us. I have learned a ton from the process of getting the cart up and running.
First, it is extremely time and labor intensive to load products into the system correctly. We were doing it manually one by one to start and we then figured out a way to upload directly from a csv file. Even with our new bulk upload capability it is still takes a tremendous amount of time filling out the csv to get the initial products onto the site (this is probably the most monotonous job we have yet to encounter).
Second, what makes this even more difficult is the importance of the upload. Everything needs to be perfect or else it will come back to haunt us. If we mislabel products or make any other mistakes we will be hit with returns that can have a huge impact on our bottom line.
Finally, like everything else web based expect it to cost at least twice as much and take twice as long as expected. There are always error messages that the programmers will run into. It is extremely frustrating and a huge pain.
All in all I think XC is a powerful system that will treat us well once we have it figured out. On the flip side they are expensive, have terrible customer service, and are impossible to get a hold of.
On a side note we are only few days away from the official launch which is extremely exciting. Once we launch the site in Alpha I will post it here and ask everyone that reads to go to the site to provide feedback and run through everything to help look for bugs.
-Brett
Merchant Service Basics Part 1 (fees are in part 2)
Posted by Brett in E-Commerce, Lessons Learned on July 25th, 2009
Like almost any other company that is out there today we need to accept credit card payments for our products on scrubadoo.com.
To give you a quick background I used to work with and sell merchant services while I worked at BB&T so I am fairly familiar with the product and the sales process. There are a slew of merchant service providers out there that you can use, making this decision process one of those research tasks that you really don’t look forward too.
Here are a few lessons learned about the overall merchant services industry:
There is a difference between a gateway and a processor. For online sales you need both. The gateway is the front end that collects the information and then sends it to the processor. Most of the time the gateway and the processor are different companies. Authorize.net is one of the big gateways that you may have heard of. The processors are “partnered” with certain gateways. Processors are the ones that process the payments securely and work with the bank card associations to make sure the entire credit card transaction runs smoothly.
Aside from price (I will get to that in the next post) one thing to look for in your “processor” is if they are actually a processor. There are a ton of companies out there that are the merchant services equivalent of a mortgage broker. They are basically a sales force that sign up users and then sell the processing off to real merchant “processors” for a fee. They do not keep your account so all of your interactions, customer service needs, etc after the sale will be with some new company.
You as a merchant will end up paying the majority of your fees to your processor. There may be a set up fee for the gateway and a small monthly fee but aside from that the majority of your interactions will be with the processing company.
That is a quick rundown of the merchant landscape. I will follow up with a fee’s post the next time I have some time.
-Brett
Multiply by Two
Posted by Brett in E-Commerce, Lessons Learned on July 16th, 2009
I am pretty much an eternal optimist. So when contractors I have hired tell me it is going to take about two weeks and $500 to complete a project I usually assume it is going to take about two weeks and $500 to complete.
My experience to this point has taught me otherwise. Every web based project we have started on has taken us about twice as long and cost us about twice as much as we had anticipated. I was warned of this when I started but I didn’t really believe it (again I am an optimist).
I don’t know if this is intentional or it is just the way it “works” with web development companies but it is extremely frustrating. I have learned that a lot of it comes down to communication. Web developers speak a different language than I, or most people, do. Even after we have had several conversations and I think everyone is on the same page, two days later I will get a response to solicited critique I have made of the project’s progress. The response is typically something like “You hadn’t specified that the site needed that functionality” when I thought the fact that we needed a specific functionality was very clear. So the developer tacks on another 15 hours of work.
One thing I have learned is that diagrams are very helpful, they are in no way a cure-all, but they seem to make sure everyone is visualizing the same picture. Most of the developers I have worked with are pretty good at providing these to me and I now always ask for one as a part of their bid. It shows me that they understand what I want and that everyone is at least close to being on the same page.
I thought scrubadoo.com would launch July 1 It is now July 16th and we are still chugging along on the programming side. Hopefully we will be finished soon.
Delivery Methods
Posted by Brett in E-Commerce, Lessons Learned, Start-Up Tips on July 13th, 2009
First off I apologize for the long break. I will be back to a more regular schedule after the brief haidous. Now on to the post.
In general the products we sell at scrubadoo.com are relatively low ticket items. This combined with the fact that we are almost 100% e-commerce makes shipping tremendously important to us.
Shipping is so important for several reasons. First, our shipping costs can reach 30% of the total ticket price of some of our items. Second, to help differentiate through customer service we need to provide a flawless customer experience which includes on-time, track-able shipping. Finally, we need to provide a seamless way for customers to return items that are defective or they feel should be returned for other reasons.
Like any business there are a ton of capabilities we would love to have but there are only a few that without we would be sunk. One of those few is shipping. Because of this we spent a lot of time looking at UPS, FedEx, and USPS. We needed a product we could integrate into our website, a company that was business friendly, and a company that offered reasonable rates.
My first impression of the three companies was underwhelming. None of the three seemed to have their act together on the small business side. Additionally, all of their web capabilities seemed rather antiquated and it was impossible to get an anwser from anyone. After a frustrating amount of digging I found out the following:
USPS- currently does not offer many capabilities for business owners. They are currently building a small business platform that will eventually satisfy the type of needs we have for scrubraisers and scrubadoo.com.
FedEx- I was never able to get very far with them. Through there web they dont seem to have a small business orientation nor do they have the capabilities we needed. If they do have the capabilities needed I could not find any information about them nor could I get in touch with someone who could help me out.
UPS- At first I could not get anyone to speak with me and then when I did get someone they had never even heard of the product they advertised on the web that I had more questions about. That product “returns on the web” turned out to be what we needed. I was finally able to get them to assign me an account rep who was able to either A) answer my questions or B) put me in touch with someone that could answer my questions.
We went with UPS and since my initial negative experience, I have since been impressed with their customer service (they even took me out to lunch). We launch the site in the very near future and hopefully UPS will play a key role as a strategic partner for us.
