David Skok Explains The New Age of Lean Startup Marketing at NERDMarch 25, 2011
by Kristin Dziadul
Whether you are in Boston or just follow powerful people on Twitter, you probably know of David Skok. If not, you should. David Skok is a serial entrepreneur who is now a venture capitalist at Matrix Partners. He also owns the popular site forentrepreneurs.com.
Last night, David Skok was invited to join John Prendergast at the regular Lean Startup Circle Boston meetup discussing “How to Build a Sales and Marking Machine” at the Microsoft New England Research and Development Center (NERD). Skok gave a powerful presentation on how startups should be using marketing to drive high customer monetization with a low cost of customer acquisition.
The most resonating points Skok conveyed last night were:
* A well balanced business model is to acquire customers inexpensively and begin monetizing them
* Marketers need to recognize the power shift in the buying process – the internet caused a disruption where buyers are now in charge. We as marketers need to get inside the head of the buyer to find out what drives their decisions so they make the right purchase (a.k.a. buy your product)
* Make it easy for customers to sell the product to themselves. Your product should be simple enough where a sales push isn’t even needed
* You need to build a sales and marketing machine
To the last point of a sales and marketing machine, Skok outlined nine critical steps to build this machine:
1. Identify who your buyer is.
2. Understand their buying process and concerns at each stage. This will help you effectively build out your marketing funnel.
3. Determine the enticements you will use to get customers past their concerns. This results in a customer-driven sales process. To determine this, you must first figure out #2.
4. Develop marketing alignment. Many companies have all types of marketing activities going on, from e-mails to blogs to social media and so on, without a true purpose to drive sales with each activity. You cannot afford to do something that is not completely aligned with closing a deal at the end of the day. If a marketing activity does not create a lead for you, then it doesn’t belong in your marketing machine.
5. Have a link between actions. You need to decide what a customer should do next after they respond to one marketing activity. Skok brought up the example of Hubspot’s Website Grader tool. This is a free tool that both gives value to a prospect while also demonstrating Hubspot’s expertise in the marketing field. Once someone uses Website Grader, they are brought to a page with links to free guides and trials. They have identified at every point of their marketing funnel where someone will go next to drive to the sale.
6. Automate your marketing. Skok emphasized that the best startups have mastered automation in their processes. “If you are scared about this process, don’t be. If you are scared of automation tools, don’t be,” said Skok.
7. Measure. You need to be tracking conversion numbers through your funnel. The most important funnel metrics to measure are site visits, number of trials, amount of closed leads and your conversion rate. These numbers can help you re-evaluate each step above if there is something that needs to be improved.
8. Analyze. Your funnel will have blockage points and you need to figure out where they are. If you aren’t sure where the blockage points are, meet with your team to brainstorm where this is occurring.
9. Improve. Your company needs to have a diagram in plain view of the entire sales and marketing process. Always focus on where there may be blockage points while keeping in mind that you may not have thought about the customer’s point of view. Take these blockage points, bring your team together and figure out what is going on in the customer’s head.
To improve your sales funnel, try the following activities:
* Give out free tools to drive a viral spread
* Ensure there is low work needed to buy on the customer’s side
* Deliver high value regardless of if you are giving something out for free or not
* Build trust to demonstrate expertise
* Always have linkage to the next marketing activity
* Use the WOW factor up front to give customers gratification which allows them to signup quickly.
After attending a few Lean Startup Circle Boston meetups, I found this one by far one of the best. Not only is David Skok a very well-respected and well-known person around Boston and beyond, but he always delivers high quality advice and presentations.
Were you at the meetup last night? What was the most resonating point for you?