The 321 Studios founders showed up in my office with a great product idea. They had tested it on the web and in a few days sold hundreds of copies. I helped them articulate a company vision and wrote the business plan. In just a little under 3 years, I helped this little startup grow from a single good idea into a publishing powerhouse with over 500 employees and a $50 million annual sales rate.
Here’s how we did it:
Have a strategic vision, and then put in place a step-by-step tactical plan with achievable goals, and follow it.
Understand your target market. We understood not only our ultimate end user customer, but we knew what our partners would need. We priced the product right, and we offered the right discounts to retailers and distribution. We knew what distributors to set up, and when. We knew what promotions worked, and which ones were a waste of money. We built an affiliate program that built a network of online resellers who were actively promoting the product and driving traffic to our website.
Put the right systems in place from the beginning. First, we built a scalable website that made it easy to order, and made sure it could handle high volumes. We started with a completely downloadable software product and we needed to have systems that allowed for order processing, product licensing, returns, and customer support. I knew once I turned on the promotion and PR engine, we would need to be able to handle large volumes, fast. We made sure to address customer service, technical support, and returns processing. It’s one thing to sell one product to a single customer, but quite another to build a loyal base of fanatics, passionate about your product and ready and willing to purchase more from you. By putting in place good systems at the beginning, our customers were ready to buy new products, product upgrades and enhancements, and accessories. This helped us grow from a one-hit wonder to a world class publisher.
Create impeccable packaging materials. Besides a great design, we built the production, ordering and shipping back-end. We contracted out all the production, warehousing, and “pick-pack-and-ship” services. Orders came in from our customers – retailers, distributors, and online; we sent them to our fulfilment house and they processed everything, sending us only the paperwork. They built a just-in-time response system so we never had huge sums of capital tied up in physical product, and we could make updates and revisions on the fly.
Build a great distribution and sales network. It’s not enough to get your product placed in the warehouse or on the retail shelf. What really made us take off was I made sure every distributor sales person and even the “lowly” sales people on the retail floor were given free product to use themselves. What’s the best way to get someone to promote your product? Make sure they use it! I’m surprised that more companies don’t realize this – part of the process is to create an evangelical base of support.
Manage the press well. Press relations is one of the single most misunderstood elements of marketing. What you have to do is understand the customer again – in this case, the journalist or the reviewer or editor. Just releasing a product or introducing a new service isn’t “news” and sending out press releases doesn’t get you covered. I made sure all the right reviewers had the technical information, and followed up to get good reviews. I hired a great PR firm to help us manage the process. But more important, I made sure we were making news worthy of discussion. In today’s world, that means using social media, blogs, and building online communities. Building a buzz is what it’s all about.
Develop new products. Introducing new products leveraged our ongoing investment in the systems we put in place and with the relationships we had created. It also served to spread our risk across a range of products. We had a best-seller on the shelf, now we could extend the brand.
Go international. It’s amazing to me how many US firms continue to focus solely on the US market. A good strategy includes having an international focus.
And that’s how we did it.