Best way to get over the hump?....

[cgleason]

First off let me say hi to everyone since it's my first post. I've considered myself an entrepreneur since I was about 16 years old, and its great to finally meet some people who think like me My sole proprietorships have carried me through college and have proven to be quite a success. Now I am an old man at 24 years of age and decided to put my degrees to use by getting a "real job." This past April I started on a new venture with a co-worker and decided to take this one to the next level.

The name of our company is Audio Retro LLC and we provide MP3 audio systems for classic cars and hotrods. There are two primary benefits for our systems; it allows the user to keep their original AM radio, and the MP3 portion can also be used as a portable device. We are marketing to a very specific group of consumers, but a very large group at that. Currently one company dominates the marketplace, and it is frustrating to see how much money they are charging for sub-par products. Here's a little comparison...

Them --> www.customautosound.com
Us --> www.audioretro.com

To put it in perspective, our competitor is a multi-million dollar company and we are just two engineers working from the ground up. We have developed a strong relationship with our manufacturers and will have no problem ramping up when the time comes. One of the GREAT benefits of working as an electrical engineer for Panasonic is that you are surrounded by people WAAAY smarter than you So much so that we are currently in the process of obtaining two separate patents (neither of which I am responsible for!)

So, the problem is that we have hit a slow point. I know our website is VERY average...but this is the FIRST website I have ever done. Our budget is a concern, as most of it was spent on meeting the MOQs from our manufacturers. Where I need help is in advertising! What are some cost effective ways for us to reach our target audience without having our website covered by banners?

Sorry for the long post. ANY input is appreciated.

[archiebolo]

Since your top competitor is a multi-million company, there will be slim chance of beating them head on with the traditional forms of advertisments. However that doesnt mean to leave out the traditional advertisment, you will need them later on when you have more budgit to put up a fight.

as of now, the best way to advertise your company will be through the "undergruond" stratagies. such as word of mouth and such. But do make sure you studied your competitor's advertisment stratages so you dont end up going head to head with them(you dont want that in this stage). Learn about your competitors, know how they think, who does their advertisment, what stratagies are they currently using, and even whats their faver food(might help some where some how). Armed with the knowledge, you now attack the channels they missed.

Since your product is very targeted in nature, you can do adwords without much cost. But be sure your keywords are something that only your target market would search for. For example, your mp3 systems are for classic cars but if your keyword simply say mp3 players, your adword fund will run out before any of your target market even saw the ad.

It would also help to attend/participate in car shows, However the cost can range from low to extreamly high.

Word of Mouth / Viral marketing is probably your best tool at the momement. It could be done with low cost, but it would require very good stratages and tatics.

hope these helped.

[akula]

great question! I second what archiebolo says and will humbly extend his idea.

there is a number of cost effective ways to reach your audience, however - as far as the golden rule of marketing goes - effective lead generation (i.e. leads that convert into sales) is a function of both reach and frequency. It's important for you to reach a large number of relevant prospects, but the number of times that you reach them is what's gonna generate you the cashflow. Normally, the prospect needs to be exposed to the same message about 7 times before they end up converting to a customer.

Anyhow....

To effectively reach your market do 3 things:

1) Make a list of auto blogs. These are online journals, like http://www.autoblog.com/, which write about cars.

Send the author a sample and get them to write a review about your product. Lots of people interested in cars are gonna get exposed to your message.

2) Browse this list and contact people who read and comment on these blogs. Send them an email and ask for reviews.

3) Collect all of this feedback and display it on your site. This way, when you try other advertising techniques (such as PPC or Direct Mail), your conversion rate is going to be a lot higher than it would be otherwise - because people will read these reviews and feel a sense of trust.

In other words - to effectively market your business, engage the blogosphere and leverage the feedback to reduce the cost of your promotional plan.

Does that make sense? Right now - with no brand - every dollar you spend on marketing can (maybe) bring you in $2 in revenue. If you do steps 1-3, the same dollar spent on marketing will buy you $5 in sales.

This is a way to use non-traditional marketing channels to beat your competition - or at least - stay out of their way so as not to get crushed (for now at least).

[cgleason]

...helped out quite a bit. Thank you for your input. We plan on attending a few car shows in the coming weeks, so hopefully we'll get some positive exposure that way. I'm glad I asked for advice because I was way off target in regards to traditional marketing strategies. I wanted to go head to head with the competition...but your idea makes much more sense. Originally I thought that if a buyer saw our two products next to eachother they would make the obvious decision. What I failed to realize is what an impact brand recognition would have on this same scenario. Unfortunately a lot of people would buy something they were familiar with...even if it is an inferior product.

Thanks again.

[cgleason]

Thanks Akula!

Those are all awesome ideas and I will definitely look into pursuing that avenue. I never would have even thought to engage the "blogosphere" as you put it. I'm sure there are a lot of well know car guys who would love to get a free stereo.

[akula]

I'm glad to hear your enthusiasm and I'd like to round off with some observations in general.

In your role as a ceo, you're gonna be challenged with creating a marketing machine which is gonna count as the crown jewel in your balance sheet and basically account for all shareholder returns you're charged with reporting.

In other words, marketing is hard. Creating this conveyor belt which magically creates prospects and turns them into customers is not trivial. Maybe you will succeed with this task - maybe you won't: only time will tell. But what I can tell you is that you have a range of options which you can implement to minimise your chances of failure and maximise your chances of sucess. I'm talking about risk management and here are some pointers:

To build a business, you must start with primary market research. This is not regurgitation. You absolutely must hit the road and collect at least 1,000 surveys filled out by people who might want to buy your products. Especially if it's "obvious that everybody will buy one!".

There are three extremely important reasons why you should do it - and if you don't: it's a certainty that your business is gonna go belly up.

a) Marketing mix certainty: You must do the surveys so you can make the correct decisions about pricing, distribution and product attributes.

Don't take this lightly. If you don't do the surveys - you're gonna get the pricing wrong - you'll try to sell the wrong product to the wrong customers using the wrong advertising in the wrong places. (e.g. you'll try to sell a product, to people who can't afford it, without any special warranties (which they might be expecting), using Internet advertising when these customers expect to buy the thing using mail order, or point of sale).

b) Bargaining leverage and proof: You must show proof that there is demand for your product even if the fact is obvious. If you have the stack of papers with customers saying "yes, I'd buy it", you can use this paper to secure practically any kind of assistance you may need: money, management, equipment.

(e.g. many web designers wouldn't have a problem making you a free website if you could show them proof that there is demand for what you're selling).

Inversely - if you don't have this proof - no one is going to help you build this business; either by way of investment, loans, or favours.

c) Sales leads and evangelists: If you do the surveys - you'll have a list of people who can be your first sales. Likewise, you're gonna start to generate dialogue and move through the sales learning curve. If you fail to do the surveys - you'll miss out on those first sales - you'll never make a sale and you won't expose your self to all the feedback from your customers about what they like and don't like.

Finally: I've seen a lot of businesses fail and without a doubt - people who start businesses without doing primary market research are basically just waiting to get insolvent.

Don't be stupid. Do the surveys. Then start your business.

[nado]

Great info Daniel!

Another I'd like to know about if anyone can post some links...

d) Tips/how-to/resources to perform effective surveys using either online or offline methods?

edit: I've posted a new thread: http://youngentrepreneur.com/forum/s...ad.php?p=65596


cheers
nathan