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Buzzbait’s Growth Challenge

February 2003 Marketing

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.



About the author

Tim J. Smith, PhD is the Managing Principal of Wiglaf Pricing, and an Adjunct Professor at DePaul University of Marketing and Economics. His most recent book is Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures.

Tim J. Smith, PhD
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