If you’ve been reading this (now more occasional) blog for the past few weeks, you’ll know that my mind-marketing energy has been directed to a new product, Ontario Construction News.?
We’ve been going for about three weeks now with our daily newspaper for Ontario’s construction industry. I perhaps should put? the word “newspaper” in quotes because we certainly aren’t printing the product on newsprint — but have designed the publication to meet the specific legal definitions of a “construction trade newspaper” under the Ontario Construction Act.
This designation allows us to sell legal ads — namely “Certificates of Substantial Performance” that contractors need to publish to protect their lien rights and collect their contractual hardbacks. Until our arrival, the market had been an effective monopoly — contractors needed to advertise in the appropriate newspaper (published daily) and there was only one publication meeting the qualifications.
The legislative change that opened the doors for our business relates to the definition of “newspaper”, allowing it to be a digital product. There were several other check-boxes to fill, but after some planning and co-ordination, I decided to go for it — especially since I figured we could be profitable with less than 10 per cent market share at prices significantly below the incumbent.
My original plans were to launch the title June 1, but hold off selling the legal ads for one month, starting July 1. I also envisaged hiring a full-time salaried staff editor to manage the work load.
Then, with a fortunate flash of insight, I decided we could move up the publication date, sell the legal ads the day we went daily, and find a part-time editor and use plenty of sweat equity to keep costs under control.
So far, so good . . . but three weeks into the story, sales are far below projections. There are “some” but not enough — even though our competitor’s volume seems to be increasing (suggesting a growing market demand for the product).
This leads to the sinking feeling — could something be wrong — and if so, what is the problem? And here I find some inspiration in Eric Gagnon’s weekly eletter — when he talks about marketing failures and explores why they can happen.
1.) Poor marketing presentation;
2.) Poor prospect targeting or selection;
3.) Poor marketing execution:
4.) Other problems that may or may not be solved by better marketing skill.
Gagnon suggests a number of ways to tackle these problems, but the one that comes to mind is his suggestion that you check in with the people who actually have purchased what you were selling.
And so this afternoon, I called our first (and so far only) repeat client.
I learned that the client had indeed responded to marketing initiated by a strategic alliance partner (and I believe a significant percentage of our relatively small order volume comes from that source).
I also learned from her that indeed we are priced competitively. Her business needs to place 30 to 40 of the relevant notice ads a year, at a previous cost of $350 average per ad. We are charging $250. So that suggests a savings to her company of between $3,000 and $4,000 per year — not too bad.
I also learned her occupation (office manager) and began to deduce one of our problems — the people reading our newspaper and visiting our website aren’t the people actually purchasing the relevant ads. We simply are not connecting with the people who actually need to advertise this specific product
The strategy right now is to carry on with some painful but necessary market research. Here, we have some real advantages. The competitor (and we) publish details of each advertiser, every day, online (this helps fulfil the practical purpose of these legal notice ads.) So, there is nothing stopping me from looking up the competitor’s previous day’s sales and calling the listed companies.
This is raw-gut cold calling (telemarketing/market research) and is decidedly yukky for someone like me to do. But I think it essential to gain an understanding of the market and decide how best to reach the potential advertisers. I can then follow-up with a direct mail campaign with an understanding of the potential market.
As Gagnon writes, sometimes there are clear failures, many times there are borderline successes, and only occasionally we hit the home run where everything works so well that our problem is managing the inbound business volume.
He also suggests that when things don’t go quite right, you should always spend a bit of time thinking about what is working — and here, there is some really good news. While the daily publishing cycle is challenging, we’re managing it okay, without too much stress. The delivery systems appear in order and I learned from the customer today a few tweaks to make them better.
Most importantly, I know there is a market out there — and it is larger than I had expected. So I’ll roll up my sleeves and figure out where we aren’t getting it quite right and will make it happen.