Category: 2012

Can The Fancy Fulfill the Dreams of Pinners

This post appears today on MediaPost’s Online Media Daily

Fancy (www.thefancy.com) is being totted as the next “Pinterest.”  Now having passed a million members, its becoming the social media darling of the digital media.  Add to that an all-star cast of investors, a defined business model based on commerce and you’ve months of hype to come.

What It Is

It combines the transaction capabilities of a daily deal site, like Groupon, with the visual imagery and organization of Pinterest.  Like Pinterest, The Fancy lets users curate and organize images into list or boards.  Unlike Pinterest, users can shop and with a click buy the product at on a third party site.  It’s built with the intent of driving commerce.   The Fancy, like daily deal sites, pushes out a daily email of specials to members.

Pinterest member commenting on a new flash drive

What’s Cool About It

Unlike other social media platforms (Pinterest, Twitter, Facebook, etc.) who first built a member/user base, Fancy is placing a bet on a defined revenue model out of the gate.  And that bet is commerce, not advertising, at least not yet.  As it is today, the Fancy will get 10 percent of each sale, paid for by merchants.

 

The Flash Drive, mentioned by the Pinterest member, on sale on The Fancy site.

But the real attention getter is the bet it’s placing on the power of social networks on purchase decision.  The “holy grail” for social sites, is the ability to show a direct correlation between brand preference and buying that brand.  Fancy, because of the integration of commerce and an ability to track conversion, has the potential to link intent with purchase.  If successful, Fancy will attract merchants (and eventually advertisers) like a moth to a flame.

Three Reasons It May Not Work 

Although I love the concept, there are several potential risks that could derail its success:

  • Boxed in – The Fancy, unlike others, is trying to build a community around a business model.  It’s a high risk gamble because, as other have seen (Linkedin and MySpace for example), business models often evolve based on users behaviors, which is often hard to predict.   The other question – is Fancy entering a market that appears to be on a downward trend or could it be the next generation of daily deal sites?
  • False Positives–  It’s unclear how users will respond to unsolicited recommendations.  The hope is that followers of users who had post products will self identify and make their intent known.   The risk here is triggering “false positives,” in that, users my signal intent (“Fancy It”) without having any real motivation or desire to make a purchase decision.  Yes, I want to buy the Ferrari you posted, but the reality is that’s not going to happen.
  • Too Cool  – one thing is certain about Fancy, members curate eye-catching products (carbon fiber beach paddles by Channel, for example).   As Tim Peterson of Adweek points out, “Fancy is most useful to trendsetters and tastemakers, particularly those with disposable income.”   But are the products being aggregated too cool for commerce?   To scale the business will Fancy have to aim lower to drive transaction volumes?

Today, Pinterest’s conversion rate is now 3x that of Facebook (1.1% versus .35%).  The big question is will that rate go higher with the integration of a commerce engine, like Fancy?   If so, Pinners just might fancy a transaction on another platform…and merchants and advertisers will be right behind them.

10 Things You Need to Know about Selling to Business Owners

Large companies have long recognized the opportunity to address the needs of small business (26 million firms <99 FTE’s).  Over the years, companies like IBM, American Express and Google have spent millions to try to understand the segment and convince business owners that they have the products and services they need.

Yet, they still struggle to capture of the opportunity in this segment, for a number of reasons.  Despite their best efforts, they often fall back into their “big company” ways.  They speak the wrong language, have a hard time creating compelling offers, and/or reinforce perception that they’re too big to serve small businesses.

Whether you’re a Fortune 500 company or an INC 500 firm, here are 10 key points to keep in mind when selling to the Small Business segment.  All Insights below are taken from various research reports produced by the Executive Council on Small Business.

1. Don’t call them Small Businesses – despite this becoming common knowledge for many selling to this segment, companies still make the mistake.  Despite the fact that 60% of small businesses, as defined by the U.S Census Bureau 2008, have less than 5 employees, don’t call them a small business.

2. There are 2 different types of business owners – one type of owner is focused on growing their business, the other surprisingly, is not. Know the difference when targeting this segment.   “Satisfaction owners” know also as “lifestyle owners” are older (>46) and more likely to have higher revenue businesses.  They are in it because they love what they do and enjoy the work-life balance ownership present. “Growth” owners are more likely to be in retail, and more likely to have owned or own more than one business (serial entrepreneurs).

3. They are in the Service Business – for the most part small businesses are focused on providing services.   60% of small business are; professional services or other services (dry-cleaning, florist, cleaning service, etc.).

4. Speak THEIR language  – As you might have already picked up, this will be a reoccurring theme in the post.  3X as many business owners find a sales person more trustworthy if he/she discusses savings in dollars rather than percentages.  To be credible give them specific details, contact information and testimonials for other business owners (Top 3 Indicators of Credibility).

5. Small things are a BIG Deal – according to the research, a major purchase decision starts at $500.   Cash flow is the lifeblood of small business don’t under estimate your need to prove value or ROI on what you would consider small transactions.   If you’re talking about cost savings, express it in monthly terms rather than annual.   2X as many owners expressed seeing savings monthly rather than yearly.

6. Resources and Time are Tight – owners now make a purchase decision in less than a week for complex and simple products.  43% said that it now takes them less time to make a decision than it did 5 years ago.   They search online, visit your website, and then call to confirm what they’ve learned.   SEO is critical if you’re going to play in this segment, as you will see below.

7. They Love to Search – Business owners purchase patterns have changed, instead of contracting it’s now expanding.   Rather than narrowing their list of vendors, 60% of owners now report expanding their consideration set through research.

8. And it’s Local – business owners search for a product or services by name, not a brand, and they include their local area (e.g. “internet providers in St Louis”).  They don’t include “small business.”

9. Search is Important, but Social Isn’t – as you saw in the previous examples Search is critical for being considered, but interesting enough, Social Media is not.   The reason – small business owners view social media as a channel to speak about their businesses, rather than hear what suppliers have to say.

10. If You’re Not Relevant…You’re Not Relevant.  In today’s marketplace to resonate with audience content must be personalized.   A recent Forrester report showed that most sales forces very capable of discussing products and solution, and even the industry issues, but when it came down understanding the buyer’s role or situation they failed.

Business owners in healthcare, construction and manufacturing want information specific to their industries.  Owners of professional services or retail want information specific to them.

Satisfaction owners are looking for products and services that save them time savings and strengthen their relationship with customers.   With Growth Oriented owners talk ROI, and time to payback.

Summary – it’s OK to categorize your services or products as small business solutions, but don’t call the buyers small business owners.  Recognize that there are two different types business owners focused on two different goals – lifestyle vs. growth.  Both groups are interested in hearing your value proposition in terms of real dollars on a monthly basis, not over the year.

Business owners are heavy users of search for researching vendors, and they use social media to promote their business, but not for buying from vendors.   To be relevant your content must speak to their industry or similar size businesses.

If you talk to them like you know them, show them you are committed to building a lasting relationship this dynamic market can power your organizations growth.