A VC in Vacationland

If you are a software start up trying to get market attention these days, you know that the process is difficult.  Analysts give you a few minutes and perhaps a few lines in an article, press releases go unnoticed, blog buzz is hard to get and harder to manage, mailings have no results, speeches yield many business cards, but no business, among other trials and issues.  Even your prospects mailing list is probably out of date and not generating many leads from your occasional newsletter.

Sound familiar?  You are suffering from what I call the "a priori marketing syndrome". A priori marketing is often referred to as scatter-shot marketing, generally practiced by your PR firm. You spray out a lot of marketing materials randomly through various channels into the ether, have no way of determining effectiveness and end up with a big expense and modest results in the lead stream.  Traditional business school marketing theory, upon which this approach is based, was often the only option in past years to reach potential customers and likely the approach you learned in your first business experiences.

My friend, Padman Ramankutty, founder and former CEO of Bristlecone, the very successful SAP integrator and supply chain consultancy, and myself experienced the a priori marketing syndrome last week when we were working with one of my portfolio companies.  They were primarily using a priori marketing methods to go to market and were unhappy with the amount of valid leads the method was generating. They were looking for a new approach to marketing, one that reached and nurtured potential customers on an ongoing basis, rather than episodically.

To be precise, there is nothing basically wrong with an priori marketing strategy–as long as it is executed correctly as part of a broader, experienced based marketing program. But new marketing strategies and technologies are critical  if you are going to maximize your scarce marketing dollars in today’s internet-enabled world.

What was missing from their plan was something Padman and Dave termed "a posteriori marketing"–using permission-based marketing tools and techniques to educate and capture the interest of the correct pool of potential buyers for your software.  Confused? Here’s what we mean:  a priori knowledge is independent of experience, while a posteriori knowledge is dependent on experience. In other words, a priori marketing randomly looks for new customers while a posteriori marketing hunts for leads in the pool of people who really need the products (those experienced in evaluating and using related solutions in their work).

So how do you find that magical pool of people who really need your product?  You set up all sorts of ways in which they can give you permission to market to them.  For example, the best permission based web sites I have seen, like Steelwedge, have at least five opportunities on the home page to "sign up" for something–white papers, webinars, product information, lunch with the CEO(not really, but why not?), etc, etc.  You fill out a short questionnaire with your name, email, what product(s)/solutions you are interested in, and if you are looking to buy soon or just starting a review process.  They also collect permission-based information in more traditional ways–at conferences, via emails and cold calls. The company then uses the data to target specific and relevant materials to the potential customers and define internal marketing strategies to move them up the lead stream food chain to sales prospect.

The best companies in the permission-based marketing game have fine tuned the process so that only the most qualified leads are presented to the sales force for action.  In many cases, when a lead comes out of the permission-based technology, pre sales professionals further vet the lead before it is passed onto the sales group. The net result is that the sales force is only working with prospects that are actively in a buying cycle.

Want to try this at home?  or in the office?  Next week, our post will cover capabilities and technologies needed to set up a permission-based marketing program in your company.