Prime the pump by allowing your target customers to experience your product of service with little no risk to ignite your business.
How do you get your business started from scratch and off the ground? In nearly all cases, you need to ‘prime the pump’. So what is priming the pump? In the 1800s, when you needed to use a water pump, you had to pour water into it to clear out the air in order to get liquid out of the pump. This is called priming the pump, and businesses are no different than that dry pipe where, ironically, you need to pour a little water into the pump in order to get lots of water out of it.
Many Business Leaders Don’t Want to Give Away Their Valuable Product or Service
At least once a week I meet a business owner or company CEO that is trying to ignite a business from scratch, and they are trying to charge every customer full price giving no discounts and giving no ‘freeware’. One of the most important things that you need to do when you’re working to get a business off the ground is allow people to experience it, even if it’s a reduced feature set version of your product, or a limited time or limited use offer.
Priming the pump allows your customers to experience your product or service and start the buzz. You need to get people talking, hopefully in a positive way, about what you are offering.
Building a Brand at QuestFusion
A big part of building a brand, especially an online brand, is giving a lot of stuff away for free. That’s difficult sometimes. Some of the stuff that you give away is incredibly valuable. I was at a marketing conference about two years ago, when I was just starting getting QuestFusion off the ground.
This keynote speaker was talking about giving away many of his advisory services for free. Something he said really struck me: “I like to make sure that my free content is better than the content that my competitors are charging for.” That really opened my mind. Here was a guy that was a very successful marketing advisor on the speaker circuit and generating a seven figure income from his business preaching to give incredibly valuable content away for free. At QuestFusion we have a lot of free content: blog posts, contributed articles in entrepreneur-facing publications, videos, webinars, and social media feeds. This free content allows people to get to know me. I also do small group seminars for free. These allow people to interact with me and get to know me even better. Someone has to get to know, like and trust you before they will do business with you. If you are a new business, how are people going to experience what you have to offer, and get to know you, if you charge for everything?
Growing a Brand as a New Entrant in a Market
In my previous CEO positions, I ran three different tech companies. I was a communications and entertainment tech executive for a decade before I became a CEO, so many people in that industry already knew me when I got my first CEO gig.
Now that I’m providing strategic guidance to startups on a broader basis, a lot of those people don’t know me. They can look at my background and reputation, but they’re still not going to want to do business with me unless they have an opportunity to see what I’m like. Those are the things that I do for free.
The Dilemma of Having One Big Expensive Product
It’s very unusual that you can’t have some kind of limited deployment, limited feature set version or a limited time offer of your product of service. One of the most important things is getting in front of thought leaders. If you do have something that is super expensive that is hard to give away in any way, work on ways to demonstrate the product to them. Prototypes and demos can be a lot less expensive, but still give customers a real experience. Have them use your product.
Examples of Your Product Need to Get in Front of Critical Reviews and Thought Leaders
In the tech industry, we used to do demonstrations and give products away to editors of technology magazines all the time, They want to tinker around with it. Dean Takahashi, who is now with Venture Beat, used to work at The San Jose Mercury News, and then at the Wall Street Journal. Walt Mossberg worked at the Wall Street Journal. These guys are tinkerers. They like messing with gadgets. Yes, maybe you have to give away a free phone or DVD player to those folks to get them to use it, but they’re thought leaders. They have an audience. People listen to what they say. They can be an amplifier on the things that you’re doing.
Who are the people that write to your audience? Who has authority? Who has a big social media following? Do they get a lot of comments and likes on the content that they post? Connect with these people, and give them your products and services for free.
Where Does Your Audience Hang Out?
Identify where your target customer hangs out. Does your audience listen to podcasts, read trade journals, read blogs, watch YouTube videos, attend certain conferences and trade shows?
Build a Tribe
When you are starting a business and building a brand, you should work to develop a set of people who say that your products and services are great. Sometimes this is called a tribe. Sometimes raving fans. It is said that you only need 200 of these people to ignite an online business. Get these people involved. Listen to them. Respond to them. Maybe get them involved initially on a free or discounted basis. Some of these people might even be affiliates or referral partners in the future.
Even Without Monetization, Have Other Goals for Your Giveaways
Ask for something in return when someone is sampling your product for free. Is it a testimonial? Is it a case study? Is it some feedback? Is it just their name and email? Get something out of the giveaway if you can. If you’re not getting the value of the product monetarily and you can’t monetize it right off the bat, at least get something back that allows you to understand and grow your business.
Part of the “ask” when you engage with customers like that is asking for a testimonial. You can say, “I’d like a testimonial. I want you to be honest. Talk about your experience with my product or service.” If you can, get it on video. If you can’t, get it in writing and put that on your website. Promote it using ads on social media channels like Facebook and Instagram.
Even in a Freeware Environment, Understand Your Value
What is the value of your product? What is the value of your service? In order to answer these questions, you have to understand the market, the problem that you are solving for your target customer, and the competitive landscape, including substitute products.
You may have something that’s 10 times better than anything that’s out there in the marketplace, but it will still be difficult to get people to use it unless they understand the value. How are you going to get people to use it? Sometimes you have to prime the pump. Then, as you establish traction in the market, you can start charging the fair market value for it. Keep in mind from the get go how you are going to move to a fair market value price, even if you give some things away for free in the beginning.
Overcoming Your Fear of Giving Stuff Away
There may be a lot of fear in your mind saying, “I’m going to give this discount to someone and now they’re going to tell everyone. Then I’ll have to sell my product for half of what I was going to sell it for.”
If that ends up being the case, then you haven’t managed your discount plans and pricing properly. Or maybe you didn’t have the value that you perceived in the beginning. If you’ve done your market research and you truly understand what’s available in the market today and how much your competitors can charge for their solution, then you can execute a value added pricing strategy, once the customer gets a taste.
To Win You Need to Grind
To win, you need to focus on winning. Don’t focus on failing fast. Sometimes winning requires you to grind things out. In a new company and new product launch, you quite frequently don’t know if failure to gain revenue traction is a problem with your product, your positioning or with you.
You have to engage with clients, friends and people who are willing to give you critical feedback in order to refine the story. Typically, if someone is unwilling to pay you for something, either it doesn’t provide the value that you think it does, you’re not promoting it properly to explain the value to the customer so that they understand it, they don’t think you can deliver the value that you purport, or they don’t like you. At the end of the day, it’s hard to figure out which one it is until you “prime the pump,” and test the market with products, product refinements, marketing messages, and demos.
This is Patrick Henry, the CEO of QuestFusion, with the Real Deal…What Matters.