Buzzbait’s
Growth Challenge
by Tim Smith, PhD, 02-19-2003
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If at first you don’t succeed, try, try again.
Buzzbait, a creative web design, development, and
integration firm, has been repeatedly praised for excellence during
5 years of business. Yet, when partners Kevin Black, Action Figure
and Michael Weinberg, Synergist initiated efforts to grow through
customer acquisition, results repeatedly fell short of expectations.
Despite past difficulties in achieving growth, they’re still
trying.
Buzzbait, www.buzzbait.com,
has had up to 20 designers and developers creating web sites. Their
core strengths lie in creative designs, multimedia, and interactivity.
Often their web sites integrate with back-end business systems.
Among their clients are some of the better known brands in consumer
driven industries including Bank One, Chiasso, Learning Curve, and
Big Idea Productions. About 50% of their end customers utilize Buzzbaits
services through contracts with Marketing Agencies and Consulting
firms such as Frankel. When firms select to use Buzzbait’s
services, their alternatives include internal resources, independent
contractors, or other web development firms. To differentiate Buzzbait
from this set of competitors, Mr. Black and Mr. Weinberg focus on
the project management, quality control, and deep expertise of Buzzbait.
Most of Buzzbait’s sales are from repeat and referral customers.
Mr. Black described the customer evolution as going through three
steps. In the first step, the customer contracts Buzzbait to complete
a small project. During the project and upon completion, the customer
learns how working with Buzzbait produces good results. In the third
step, the customer refers other projects to Buzzbait both from other
departments within their company and from other companies.
Challenges
Buzzbait’s customer retention, penetration, and referral have
been driven through completing projects and providing results that
exceed the customer’s expectations. Having achieved high customer
satisfaction, they have embarked on three attempts to acquire a
larger customer base.
In the first attempt, Buzzbait hired an Account Manager strong in
proposal writing and solution development. The Account Manager was
able to close and satisfy contracts from existing customers but
unable to develop new business. Failing to satisfy the demand to
acquire new customers, the Account Manager was dismissed.
In the second attempt, Buzzbait hired a Sales Manager. The Sales
Manager made cold calls, did direct mailing, and set up meetings,
but he was unable to communicate the Buzzbait message and close
sales. To address this issue, the partners of Buzzbait attempted
to transition the sales process in midstream for the partners to
close the sale. However, giving up management of the sales process
went against the trained instinct of the Business Development person.
To resolve the conflict, the business development person was dismissed.
In the third attempt, Buzzbait contracted an individual that was
well networked with agencies and firms that demand creative and
technical services. Unfortunately, this sales person’s rolodex
mostly included individuals in the broadcast side of the creative
marketing industry. As a result, this person set up meetings but
the meetings werewith the wrong part of the market. This relationship
too came to a close. (See the Wiglaf article published on 3 April
2002 concerning Rolodex
Marketing.)
Moving Forward
Although prior attempts at acquiring new customers were falling
short of their goal, Buzzbait has been able to close new business.
There were three primary sources for reaching new customers. Buzzbait
was listed in Crains and other resources which led to new customers
contacts. Referrals were still bringing in new clients. And also,
Buzzbait received positive PR in ePrarie and Red Herring which brought
in a few projects as well.
Buzzbait’s difficulty is common among many small service oriented
firms. The partners have been able to build a business and solid
track record, yet their attempts to broaden their customer base
through sales people and account managers have been unfruitful.
Taking the next step in the business building process is required,
but how?
Relentlessly facing their challenge, Black and Weinberg
are examining their possibilities.
Awareness and Relationship Building
The partners of Buzzbait have proven their abilities to manage client
expectations and foster relationships, but they need a process that
puts them in touch with new prospects. This is a market awareness
problem. Using a full-service salesperson for market awareness is
akin to renting a Caterpillar when a shovel will do.
Two potential methods to manage market awareness that Buzzbait is
considering are presales and marketing/public relations. Buzzbait
could hire a pre-sales person who is compensated and rewarded for
setting up meetings and conducting telemarketing. This may require
more effort from the partners than using the services of a full
salesperson, but it would also relieve the organizational conflict
of setting responsibilities for client relationship management.
Alternatively, Buzzbait could hire a marketing individual charged
with public relations and quarterly customer communications.
Importantly, either hiring a pre-sales person and conducting telemarketing
or hiring a marketing individual to conducting public relations
and regular customer communications would address the specific difficulty
Buzzbait is experiencing: awareness and maintained customer relationships.
Either of these actions would cost relatively the same as a hiring
a Business Development Manager or Account Manager while more effectively
targeting the specific challenges of Buzzbait.
Regardless of the shortcomings of prior initiatives,
Buzzbait is going to keep trying until they get it right. Fortitude
serves us well in our sales and marketing efforts.
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Tim Smith, PhD is a principal at Wiglaf, a Market Research and Sales
and Marketing Strategy consultancy serving tech-driven businesses
operating in business markets. Small and medium sized businesses
select Wiglaf for our quantitative and fact driven approach to intelligent
revenue growth. www.wiglaf.biz.
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