How to validate your business idea

Imagine – you have an incredible idea for a new business. Let’s say, something that is going to solve problems of half of the mankind (or some significant part of it). If you have at least a pinch of instinct of self-preservation, before you start to relentlessly work to make it happen or even invest your money, you’d better try to validate your assumptions. You have to find out who your customers are (if any) and try to sell them your, currently non-existent, ground-breaking solution. However, how to market a product that does not exist yet? In contrast to my previous post, this is the situation in which it is usually worth to trust data rather than your gut feelings – it requires real market research.

So how to find your customers out there?

1. Talk to people. This can be taken in virtually or literally, it depends on what business you want to run. You can ask your friends and family, but they tend to say white lies about how awesome your idea is and how they would pay a fortune for that (because they just want you to be happy). So rather take the hard way and go for strangers. First, define your possible target group and consider the best way to contact them. If you offer a B2B solution, use your network and LinkedIn. If you have B2C, you can go and ‘roam the streets‘. It is always better, particularly at the beginning, to discuss with people. However, to get bigger sample, you may consider using online surveys like SurveyMonkey and share it on social networks, send it to anybody who could help you. But in that case you lose the benefits of conversation.

2. Create a Landing Page – you do not have to be a programmer. You can use a service like QuickMVP (most basic one) or Unbounce (offers more advanced features, however for your initial validation probably not required). Write a nice copy on your landing page that characterizes what you do (do not forget to include ‘call to action’) and give customers opportunity to subscribe for the service or for more information.

3. Create an Ad – it may be Google Adwords campaign or Facebook campaign, leading your customers to your landing page. If they are interested in your product, they will click on your ad and sign-up on your webpage. You will see how it goes. Either you will experience tons of subscriptions (best case) and you are ready to go, or you receive hardly any. That can mean your idea is not as great as expected (in which case you should abandon it or pivot it), or, you can experiment more with your Landing page and Ad’s copy more, but do not stick for too long with an idea that does not work.

Do you have some interesting testing methods to share?

References:

Pozin, Y. (2013) How to Validate Your Start-up Idea. Inc. Accessible from: http://www.inc.com/ilya-pozin/how-to-validate-your-start-up-idea.html [Accessed 10 November]

Srinivasan, A.(2014) How We Did It: 100 entrepreneurs share the story of their struggles and life experiences. CreateSpace

Is data-driven marketing going to redeem the world?

 

If you cannot measure it, you cannot improve it.

Lord Kelvin

This quite epitomizes today marketers’ data obsession. Many of them already forgot that data could be a good servant but a bad master. No wonder, the amounts of data accessible could become overwhelming…

International Data Corporation estimates that data storage is growing at 60 percent per year, which suggests the volume of stored data is doubling approximately every 20 months.

Mark Jeffery

As Ezra Fishman, marketing director at Wistia, stated, marketing should not be data-driven, rather data-informed. I will try to flesh out below, what it means and why is it so?

Among the most alluring shortcomings of measuring results in data-driven marketing rank these:

  1. Optimisation of something that does not matter so much. That may be induced by human nature to slip down to less difficult way. Let me take a video as an example. Measuring how many people watched the video is an easy one. However, measuring impact of the video on attitude to your brand, is a different story. It does not matter how complex is the measurement, both of these results are important to monitoring your marketing performance.
  2. Optimisation of only one part of marketing funnel. In online advertising, for instance, it is not difficult to measure the conversion rate of a product purchase after clicking on a particular banner. But does it give you a whole information, whether you should optimize this channel only? People usually don’t buy after first sight. They get in touch with your product several times, from different devices, even offline, before they make a final decision. And that can be a complicated and lengthy process, not so easy to grasp.
  3. Thinking not critically enough of your data. Is your source reliable? Just consider common A/B testing (two different versions of the page are randomly displayed to your visitors). The testing results can be skewed by unhomogenity of the audience, since your website is getting visitors from different sources (direct, organic search, Facebook, paid search..) and these sources can convert (in this case, drive visits to your page) at a different rate. You can verify this claim by your own experiment, by testing two identical versions of the page. Even with the large enough sample, you will get different results for each of them.

Data is important, but it’s content that makes an emotional connection.

Jake Sorofman, Andrew Frank

From the above, it may seem that to handle piles of data available to marketers today  is almost superhuman task. But sometimes it pays off to lift your head and trust your gut feeling. Some clues can be found in the work of Sorofman and Frank, who developed the Intelligent Brand Framework to help marketers balance their decisions by ‘focusing equally on four key marketing competencies across creative and operational disciplines, using a combination of data-driven and human-centric approaches.’ (Sorofman, Frank, 2014)

Intelligent Brand FrameworkHow are you going to treat your data now?

 

 

References:

Fishman, E. (2010) The Dangers of Data-Driven Marketing. Available from: http://wistia.com/blog/data-informed-marketing [Accessed 14 November 2014].

Sorofman, J. and Frank, A. (2014) What Data-Obsessed Marketers Don’t
Understand. Harvard Business Review. Available from: https://hbr.org/2014/02/what-data-obsessed-marketers-dont-understand/ [Acessed 14 November 2014]

Jeffery, M. (2010) Data-Driven Marketing : The 15 Metrics Everyone in Marketing Should Know. Hoboken, NJ, USA: John Wiley & Son.

 

What is microfilm advertising?

Have you ever caught yourself, after you watched a video, thinking „oh, what a touching story!“ or „I know exactly how does that guy feels..“, or „wow, amazing what people are able to do!“, or even forwarded it to your friend or shared it on a social network despite of knowing it is an advertising? So, this could be a microfilm.

Ok, but what is that?

Microfilm is a form of product placement. It is a short video with an identified sponsor, usually produced by a professional team. It tells a story and integrates a brand message into its storyline. Watching a microfilm leaves a deep impression, even to the extend you tend to share it with others (Well, if it is a good one). Primary difference from traditional short film is its extensive distribution through social media. Thus, microfilm is meant to be watched on computer screen or mobile device.

BMW pioneered microfilm industry in 2001 by the series called “The Hire

And what makes people share it?

According to the research of two Taiwanese universities, a viral nature of spreading microfilms is induced by its entertaining storyline that can “transport“ viewers into its narrative world and make them feel what characters feel. If viewers enjoy the video, they share it with their friends. At the same time, viewers’ attitude toward the advertisement improves which indirectly creates a better attitude towards the brand. By further online sharing can the microfilm reach more targeted audience.

What advantages microfilm offers to advertiser?

Microfilm has a short duration (varies from 30 seconds to 15 minutes or sometimes more) and thanks to that viewers can watch it from anywhere on their mobile devices. Production cycle of the film is short which significantly reduces also its cost of production. Moreover, if viewers find the video entertaining enough to pass it around, the cost to reach a large audience is minor (huge advantage comparing to traditional mass media advertising).

Why companies should use them?

Simply, it can be a lot of bang for the buck! Relatively low investment + smart use of social media = decent brand exposure among target group. This is why microfilm advertising presents an opportunity also for brands that cannot afford mass media promotion. Moreover, increasing time people spend watching online videos hand in hand with the rise of mobile online communication especially between young consumers (the same who are becoming immune to traditional advertising) makes microfilm a promising marketing tool.

There is no doubt, that in microfilm production creativity and a unique ideas are essential. It has to tell a story that will make viewers feel connectedset the brand apart from competitors and stir up a discussion. Before a company decides to give it a try, it could be useful to answer questions like:
What kind of products and brands can go for this kind of advertising?
Is it more suitable for services or consumer goods?
How to place the products and brand into the story without putting off the audience?

References:

Chen, T. and Lee, H. (2014) Why Do We Share? The Impact of Viral Videos Dramatized to Sell: How Microfilm Advertising Works. Journal of Advertising Research, 54 (3). 1-14.

Hudson, S., and D. Hudson. (2006) Branded Entertainment: A New Advertising Technique or Product Placement in Disguise? Journal of Marketing Management, 22 (5/6). 489–504.

Research Papers Center (2011) Micro-film advertising and marketing an urgent need to raise the threshold. Available from: http://eng.hi138.com/computer-papers/network-marketing-papers/201109/343658_microfilm-advertising-and-marketing-an-urgent-need-to-raise-the-threshold.asp [Accessed 3 November 2014]

Wenpeng, H. (2012) Micro-film advertising getting popular. Available from: http://en.ce.cn/Insight/201201/11/t20120111_22991381.shtml [Accessed 3 November 2014]