Business Rx: Buttering up investors, customers
Brian Razzaque is determined to make social media marketing as easy as making a slice of toast. He started his company, SocialToaster, to simplify an organization’s ability to reach out to a broad audience they might not have had access to in the past.
“SocialToaster is a Web service designed to replicate the ‘going viral’ experience often occurring when people share news through social media venues. We are trying to solve a problem that many organizations are facing: If you want to quickly promote Web content to a broad audience that you don’t have direct access to, how do you do it? Our solution is to allow organizations to tap into existing fans. These supporters are already tweeting, Facebooking, blogging, etc. about their favorite organization’s news, so why not take advantage of their social media audience? We offer a way to spread messages over social networks quickly and in a repeatable, measurable way.
“One organization currently using SocialToaster is the Baltimore Ravens. Their fans can sign up to be a ‘Ravens Rep,’ volunteering to share the organization’s news with their social networks. A few times a week, each Ravens Rep will receive an e-mail containing Ravens news and a button to click if they’d like to share the news with their friends, followers, etc. They are not obligated to share this news, but are rewarded with points each time they do. SocialToaster then shares the news on whatever social media sites the user granted them access to, all with one click of a button. So instead of going to Twitter, Facebook, LinkedIn and MySpace and doing separate posts or Tweets, the information they wanted to share immediately goes to all of their social networking sites. This makes it easier for them to share the information they were already sharing — as high as 91 percent of Ravens Reps share when they get an e-mail — giving the organization access to a large audience it otherwise was probably not reaching.
“SocialToaster can track each share and measure the effectiveness of each user’s posts. Our reports let you look at traffic, leads, etc. We can also show you how many connections you have. For example, one of our largest clients, Sunny D, can reach nearly 1.5 million people with just over 5,000 ambassadors. We charge organizations a monthly fee to use the service based on the volume of sharing that occurs. It starts as $79 per month, which allows 100 status updates, or “posts,” per month, and plans increase from there. If organizations go over their allotted posts, we charge per post.
“We launched a beta version of SocialToaster with Hair Cuttery in 2009, and are very excited to be expanding with deals such as the Baltimore Ravens, Detroit Lions and other NFL teams in the near future. We’ve also launched with Johns Hopkins University, which is using our service to actively engage alumni and share school information and events. SocialToaster targets that 10 percent of highly engaged alumni and gets them to act as ambassadors for the school. SocialToaster works very well with any organization that has an engaged audience, such as universities, charitable groups and political candidates.
“We are currently facing two main challenges, the first of which is educating the consumer on the product. People automatically think of Facebook and Twitter when they hear ‘social’ in a business name, so it takes a little bit of explaining for a lot of people to get what we are doing. The people who ‘get it’ the quickest are the ones who are already sharing their organization’s information manually. They will realize the benefit on one-click sharing of important information. We’re hoping our strategy of launching with big organizations gives us the chance to expose our product to people who might utilize our product. Our second challenge is funding and fundraising. We’ve found the Mid-Atlantic to be challenging to raise money for this type of business — New York City, Boston and San Francisco would be much more receptive to our idea.”
Elana Fine, director of venture investments, Dingman Center for Entrepreneurship
“You can work toward solving both of those challenges by rethinking your message. If potential customers are taking awhile to understand your value proposition, investors may be having the same issue. You have the benefit of having several blue chip organizations using and paying for your product — most start-ups can’t say that. Listen to those customers, understand why they like your product, how they are using it to connect with customers and how they can quantify their results. Repeat these case studies to potential customers and investors, with the focus on communicating the pain point you are solving and the tangible results they have quantified. Point out your recurring revenue stream as further evidence of your product’s stickiness and scalability.
“Enterprises have only touched the tip of the iceberg in their ability to leverage social networks to connect with customers. As a result, you should expect a long sales process as prospective customers figure out where SocialToaster fits within their organization — is this an IT purchase or a marketing purchase? Current customer examples will also help answer those questions.
“Continue to sell to customers and the investors will follow.”
“Elana is dead-on in terms of the sales process, particularly since the majority of organizations have not readily determined for themselves whether this type of technology falls into the IT department or the marketing department. As a result, we generally find ourselves selling to both audiences. When we can point those audiences to representative case studies we find that the sales cycle is shorter, and each new customer drives increased investor interest.”