For half a year, Michael Litt woke up to the same thing every morning: a series of wild goose chases to find his next enterprise customer.
The founder of Vidyard, the Waterloo Ont.-based provider of video marketing tools, would have spent the previous day pouring through a list of 85,000 companies which had been identified as having some kind of video hosted on their site. This had been culled from an original list of 1.8 million firms. Litt tried to find 100 companies every day that might be interested in his startup’s offerings. He would sent that list of 100 to Odesk, a freelance martketplace operating out of Manila, to find the best contacts at each firm. The names, phone numbers and e-mail addresses would be compiled as he slept.
“The conversion rate was miserably low,” Litt recalled in a session at Techweek Toronto on Thursday, estimating he and his team contacted about 25,000 prospects in a six-month period. “We got about 200 customers paying maybe five dollars a month.”
Needless to say, Litt and Vidyard have learned a lot since then, but customer acquisition in B2B remains incredibly challenging, especially for new market entrants. A good example is Sampler, a company that uses targeted campaigns and peer recommendations to boost the results of companies offering samples to customers.
“We’re going into these large enterprises and saying ‘Hey, the way you’re doing things is completely wrong,'” said Marie Chevrier, Sampler’s CEO. “There is quite a bit of education in the (sales) process. We can’t just walk in and assume we’ll get the sale.”
One of Sampler’s secrets, Chevrier said, was to enter as many public hackathons or innovation events hosted by large organizations. Sampler has entered six and won prizes in five, she said, but the biggest reward has been getting a faster route through traditionally slow procurement processes.
“It means that in some cases, you get to do a pitch to do 30 brands at once. It’s all about finding things that they need that they don’t have time to develop,” she said. “Sometimes innovation programs are just for PR, but that’s okay too, because you’ll still find customers.”
Influitive, which provides products and services to help turn a company’s customers into brand advocates, makes sure that educating customers has a guaranteed payoff. Mark Organ, the firm’s founder and CEO, said his team has prospects sign what they call an “upfront contract,” which stipulates the prospect will agree to buy something after having the technology and strategy behind Influitive’s offerings explained to them.
“Believe it or not, prospects really like that,” he said. “They don’t want to waste their time going through an endless buying process.”
Listening And Pricing
On the other hand, B2B startups need to demonstrate a strong ability to listen as well as to pitch, said Ali Pourdard, Co-Founder and CEO of Vancouver-based Progressa. Poudard’s firm works with consumers to help them get a second chance at credit, but that often involves working with enterprises and their collections departments. That’s a “negative space,” he said, which calls for a delicate and thoughtful approach.
“We used to go in guns blazing and tell them we have data and ways to reduce their costs,” he said. What Progressa learned, though, is that some enterprises — particularly telecom providers — are more focused on improving their net promoter scores and customer perceptions. “Now we’re focused on how to make their customer’s lives good and how their NPS is going to improve. We walk in a lot more . . . well, we’re confident but we don’t act like we know more than they do.”
Besides a generic “we don’t need this product,” the other big objection in B2B purchasing is price. Litt said Vidyard tackled that in part by removing pricing from its web site. That’s because competitors often pop up and, as he said, “try to price you to zero.” Instead, he said he and his team think of pricing as a constant work in progress.
“When you do talk to customers , you have to own that conversation,” he said. “I would almost kind of waffle on pricing and be confident about everything else. Nine times out of 10, you’re probably pricing it too low.”
Techweek Toronto wraps up today.