How To Market a New Product
The Runagood® Experience
When I first had the idea of automating business consultancy to make it affordable for any business, I was easily able to identify the repetitive work in every project I’d done. It goes like this: first, you find out where the business is today by posing 30 simple questions to the owner and comparing the answers to a database of 6 business benchmarks (acquired from work done with 1m small businesses).
That generates a report showing how much revenue is being lost by each and its impact on value. Next the system generates a plan showing what actions will close the gaps to raise revenue, profits and value, and connects the business with a dated schedule of activity to follow. 30 minutes from end to end, online.
The concept and invention bit were relatively simple
Once this large software investment was complete, our operational costs became negligible, bringing the ability to price our services at £1 per day, meaning marketing would be a ‘shoe-in’ at 99% discount on typical consultant charge of £500 per day.
We put it out online and spending £300 per month on AdWords soon got 00’s of businesses using it. Trouble was, they only did enough to get the free report and didn’t bother with the plan and actions which is where we would turn on the monthly charge to get revenue and give them value.
The market didn’t behave as expected
Having questioned these users it became plain they had little understanding of business principles and didn’t see the point of having a plan or a belief that there are ways to make their business perform better. They were operationally competent at producing their products and services but largely deficient in the skills needed for managing: marketing; systems; people; finance.
They were relying on word of mouth for new customers, happily ignorant of business systems, taking a matey approach to people management and relying on the bank statement and accountant for financial management. This is a group that I know so well from 22 years of helping government with small business improvement programmes. This is the 95% that are ‘hard to reach’ and have to be cajoled into taking action.
If you have something new you need to educate your audience first as to its necessity and value
So reaching back into historic experience I considered how to get consultants and accountants engaged as intermediaries, able to explain and coach a small business owner through these automated processes to the point of taking paid action. Cutting a margin for them meant raising end user pricing to £5-£10 per day, but still well within what small businesses pay during a year to respond to problems that arise.
We ran several focus groups and experienced strong support. The consultants said it was a great way to widen the numbers of clients they could profitably work with whilst the accountants said they needed to get into ‘whole business’ advisory work and the Runagood® system was the perfect answer.
We rebuilt our delivery system and websites to reflect the new intermediary roles and aimed our marketing at consultants and accountants with the promise that they would be able to work with any size of business profitably, greatly widening their appeal. In 2019 we trained 120 and equipped them with the software.
Which is where we encountered the next roadblock having challenged them afterwards as to why they were not getting beyond using the first part of our system.
The consultants explained they were not comfortable working online. They wanted to physically visit each prospect and then use our Business Dashboard® on them to determine if they we were able to afford their usual £500 day rate.
The accountants said they felt uncomfortable at predicting the future for a client’s business and being held responsible if it didn’t work out.
What your market says it will do isn’t the same as what it actually does
In both cases, we were able to establish that neither consultants nor accountants actually liked microbusinesses, nor understood them, so had not attempted to market to them. They had poor past experiences (ie brain picking and not paying for advice) and as a result were focused on the top 6% of businesses that can and do pay £500+ per day. A very competitive market.
They did not believe that the other 94% were worth pursuing and didn’t know how to reach them anyway. In fact, worse, it turned out they were not marketing themselves at all beyond attending networking events and hoping for referrals and introductions. They happily volunteered that they weren’t helping themselves.
Your market wants a ‘magic bullet’ instead of working at what it should be doing
To sell our technology it became clear that we first needed to give our Partners new skills and the confidence in using them to:
Find new clients (marketing & selling)
Advise the whole of their businesses (consultancy)
Work fast to get prices low and profits high (harnessing technology)
So, we developed a Foundation Programme based on these 3 stages.
Session 1 is Marketing:
A structured programme which assumes they have nothing and gives them all the resources and tools needed to secure new business clients.
Implementation coaching until receiving regular enquiries, proof of their growing marketing skills and confidence.
And it works!
In my next blog I’ll cover how we then arrived at the need for Session 2 (business advisory work) and went about training Partners in the consultancy skills needed to grow a client’s business and keep them secured in a recurring income contract.
Duncan Collins, Founder of Runagood.com Ltd