#22. Launch marketing: how to promote your new product or service to market for the first time

Darren Moffatt: 00:13

Hi, my name is Darren Moffatt. I'm a director of web buzz, the growth marketing agency. And I'm your host. It's great to have you with us. Yes. We're celebrating here again at nerds of business. We've hit the auspicious milestone of 20,000 downloads and just in time for the final episode of season two on product development. So, if you're a regular listener, I want to say thanks for the support. I really appreciate it. Over the last nine episodes, my rotating cast of nerds, and I have attempted to solve the key challenges of product development. One problem at a time. We've heard from technical experts in the fields of product design, venture capital and intellectual property, and six entrepreneurs worth a combined half, a billion dollars have shared fascinating, real-life stories across all the key product development steps, ideation, validation, product planning, prototyping, IP sourcing, and manufacturing, business models, distribution, and raising capital.

Darren Moffatt: 01:21

And now we turn our attention to the final stage in the classic product development cycle. The go-to market strategy. Anyone who's worked during the launch phase of a start-up will probably know that this is where things can go seriously bad. Even if you've done everything right in designing a great product solution, a flawed rollout or marketing campaign can quickly blow up your launch and vaporize the precious momentum you and the team have worked so hard to build, but this phenomenon isn't restricted to start ups. As we're about to hear in our opening story. Even the biggest companies with the most iconic brands can get the basics of a new product release horribly wrong.

Darren Moffatt: 02:22

The year is 2009 when the American food conglomerate craft decides to launch a bold new product into the Australian market. Vegemite is a much beloved food product and iconic brand to generations of Australians created by Australian chemist, Cyril Callister in the 1920s. The salty black spread derived from yeast extract is commonly used on toast and in sandwiches and is regarded as a household staple. Kraft, as the owner of the Vegemite brand announces that they are launching a new product, a reinvention of Australia's favourite spread. The new derivative product is a combination of Vegemite and cream cheese. A large-scale campaign is launched to invite the Australian public to name this new product. While Aussie's put on their thinking caps, the nameless product is made available on supermarket shelves with a cleverly designed product label, that reads, name me, this crowdsourcing campaign proves to be a huge success.

Darren Moffatt: 03:29

Kraft receives more than 48,000 name suggestions and much to Kraft's delight, Australians seem to like this new concoction with more than 3 million jars sold. To capitalize on the public interest. Kraft boldly decides to announce the winning product name at one of Australia's most publicized events, the AFL grand final and when the winning product name is revealed to be, i snack 2.0 things quickly turn sour. Australians rushed to social media to voice their distaste for the new Monica, the almost visceral anger of the public causes i snack 2.0 to go viral. Kraft faces a huge backlash for tampering with an iconic Australian product. After just four days Kraft announces, they will dump i snack 2.0 and let the public decide on the new name, through a poll. They settle on the new name of cheesy bite and the product eventually goes on to become a strong seller, but thanks to a poor go-to market strategy, Kraft suffers significant brand damage and wrecks up millions of dollars in unforeseen costs in rebranding the product so soon after launch.

Darren Moffatt: 04:54

Now there's an interesting postscript in the Vegemite story. There was a conspiracy theory at the time that Kraft chose i snack 2.0 as part of an elaborate publicity stunt. Kraft, even put out a press release to deny this claim. So why did the public react so strongly against this name? Now, admittedly, it's a terrible name, but I think it was because it didn't reflect the products Australian roots, but instead seemed to Americanise it. That hit a nerve with the Australian public, as it reminded them that Vegemite was no longer Australian owned, But American owned. The lesson here is that even if you get everything else right in your product development process, a bad go-to market strategy can strip the business of momentum and even derail your plan entirely. If you're gearing up for the launch of a new product or service, what can you do to ensure that your target customers understand the offer and connect with it emotionally, in such a way that it sets you up for long-term success.

Background talk: 06:09

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Darren Moffatt: 06:29

This is nerds of business. We'll start the show in a minute, but first a word from our sponsor.

Ben Carew: 06:40

Hi everyone. It's Ben Carew here. I'm a director at Webbuzz, the growth marketing agency. I work alongside the host of this podcast, Darren Moffatt. If you're a business owner who wants to grow, but you don't have the spare funds to invest in marketing right now, you're not alone. Since COVID hit, we've noticed more clients suspending campaigns or delaying their marketing altogether due to cashflow issues. In response to this, we developed a solution called buy now, pay later, digital marketing. It provides eligible small businesses with nothing to pay on SEO, digital marketing, and website development for up to three months, we think it's perfect for entrepreneurs who need a helping hand getting sales flowing. I'll be back later in the show to explain how it works, but if you can't wait, you can download a free info pack now at webbuzz.com.au slash BNPL - That stands for Buy now, Pay Later. That's webbuzz.com.au slash BNPL.

Darren Moffatt: 07:42

So, the title of today's episode, And the problem we're trying to solve is launch marketing, how to promote your new product or service to market for the first time. It's a big topic today, and we've got some truly inspiring guests on the show. You'll hear from the founder of a $100 million SAS business, the product manager for a neobank, the CEO of a national hospitality group and the founder of one of the fastest growing health care companies in Australia. We'll completely nerd out with our two product design experts, and we've got a supersized edition of our regular segment nerd under pressure with double the killer hacks. So, watch out for that one. But first here's just a quick request. If you're enjoying nerds of business, we'd love to get your feedback. Take a second now, to open up your podcast player and leave a review. It helps us climb up the ranks and become more visible to other people Just like you, remember, we want to help as many entrepreneurs and businesses as possible. Thanks in advance for your support.

Darren Moffatt: 08:51

Regular listeners will know and love the two product design experts, who’ve joined us for nearly all of the 10 episodes of this season. So, it's only fitting, we start the last show in this series by giving them the first word. I put Ross Gales from Sydney agency Pollen and Carrie Peters from agency, ustwo, in the hot seat of our regular segment nerd under pressure. Now you'll hear Carrie's response a bit later in the show, but here's what Ross said, when I asked him for one killer hack, he can recommend for a go-to market strategy. Okay, Ross, uh, we now come to another famous recurring segment of ours at nerds of business called, Nerd under Pressure. Oh, its pressure time, the tension builds, ah, this is nerd under pressure, and Ross You are our product design strategy, uh, nerd today. And, uh, we're really keen to learn, uh, from, from your perspective as a, as a technical specialist, what is one killer hack or tip you could recommend for our listeners?

Darren Moffatt & Ross Gales 10:01

You know, once the product is built and it's live, and you're out in the launch phase for the go-to market strategy. And I'm going to give you five seconds thinking time. Okay, over to you. So, it’s not really a hack. It's more of a tip. And what I'd say the tip is, is to not put all your eggs in one basket. Ah, okay. Cliched, cliched statement. Yup. Um, but also many times I see businesses rush into the go-to market strategy. Right. They invest a lot in their marketing plan. They want to go off with a big bang and have all of their launch events and they want to get the thing out there as quickly as possible with as much fanfare as possible and invest a lot of money in it. Only to see the money run out really quickly and then having to scrap together some other marketing strategies to keep the acquisition up at the launch of the product.

Darren Moffatt & Ross Gales 10:54

So, what I suggest is, is, is start early, but start small, try things out, try out a little bit of search marketing, try out a little bit of social influencer marketing, try, try lots of things and invest until you get the model and the mix, right for you. Don't go off with a bang, invest slowly and lean, test and learn as you go. Yep. So that's really coming down to sort of channel strategy and finding, you know, to some extent what's the right channel for the product and for the marketing. And I guess an important consideration there is the cost per acquisition. Yeah? Absolutely. Yeah. So, so you want to make sure you're getting the right balance there. Cause there's no point tipping thousand dollars to acquire a customer when their lifetime value is far less than that. So, you really want to work out what channels are going to work best for you.

Darren Moffatt & Ross Gales 11:44

But at the same time, you remember you, it's a product and it's a product that can be iterated on. So, you churning your product up. You may get people to the front door, but they may not be converting. So, you've got to optimize, you've got to change. You've got to learn. You got to work out that there's maybe other value leavers you need to pull in your product to dial up certain things, but the more people use your product, the more you learn. So, taking a slow and steady and measured approach and not rushing to market is what I really advise of our customers because often what you are launching is really just a beta version. It's the first-time real customers starting to use your product. And as soon as you start getting the learnings from real customers, that's when the development fund really starts, then you've got to start actually iterating on it and taking and collecting that feedback to make your product better.

Darren Moffatt: 12:32

In some industries, the launch phase is so important. It can literally make or break a new business. Hospitality is a great example. Can you imagine, for instance, starting a new restaurant or bar without a launch event or party Sven Almenning is the founder and CEO of the speak easy group, a hospitality business with eight venues across Australia. Sven is originally from Norway, and he brings a real product design ethos to the service industry. He's recently launched a unique Viking inspired restaurant called Mjolner. I asked Sven to reveal his approach to the go-to market phase, and his answer is in many ways the opposite of what you might expect. You know, once you were ready, uh, what restaurant would you like to use? Uh, as an example, here, we could use, uh, eau de vie or we could use mjolner. Which one would you like to use? I'm talking about the actual go to market launch strategy and how you got the word out, right? So, which one, which one do you think would be the best?

Sven Almenning: 13:43

All the same for us. We have a very standard approach to it. We are in a very fortunate position to be able to do this. So, it's not something everybody can do. Um, but when we launch a product, what we tend to do is, um, what is, every time we try to open really quiet, we don't do a launch party. We don't announce that we are coming to market really. Um, because, uh, there's this danger of becoming cool. Um, so if you have a launch party and you invite celebrities and you get your brand all hyped up, then you are a flavour of the month that doesn't turn for a reason, like, I don't want you to flavour of the month, I want to have a business for the next 20 years. So, we specifically try to avoid being cool people that are cool, they go to one place three times, and they go to the next opening and next opening and opening and opening an envelope.

Sven Almenning: 14:36

And that's, so we try to avoid that. We try and talk to, uh, influential media in our space that are about substance. And we give them the story of what we are doing, what we're trying to do. We try to meet with them, One-on-one rather than as a, as a big press release or whatever, and explain what we're doing and give them individual hooks as to why they should dedicate their time. Um, and the column space to write about us. I mean, we do also send out press releases, so everybody knows what's happening, but we try to do things slow and not flooded. We've had, we're not always successful. I mean, we opened in Sydney. Uh, we had way too much hype. I think we had, by time we opened, I think that was, I think broadsheet, that was like third, the third or fourth story about the venue was when we opened. Oh wow. So, we, so we received so much press beforehand and you don't need the press beforehand. You need the press when people can buy, until you have a buy button on your website, don't promote the website.

Sven Almenning: 15:43

You need the buy button, same thing for us, people writing, writing about the venue is coming and sensing this to speak, sweeping news, doing that. And we're like, that call them space that we need post-launch is being wasted prelaunch. So now we try to keep it as quiet as we can, and then get the press after we open. Um, and then we really rely heavily on, on social media. I mean, investing, I think investing in content is super important. So, you know, video photo, uh, if you, if you're like for our training, like online training platform, we do, like, we do training blogs, just providing content, that's useful to people and associating with your brand helps drive traffic. Right. Um, and then, um, it's all about word of mouth for us. So, we have a very slow scale. We normally don't hit our stride, you know, properly until like two years after we open. Wow. It was word of mouth takes a while to, to get out there. Yeah. Yeah. But two years then you're humming and you're not cool.

Darren Moffatt: 16:48

Yes. Okay. So again, another hard decision, you know, that's, that's a, that's quite striking, you know, and you sort of, uh, you talk to people they've been around the block a few times and run, run a couple of businesses. I'm not suggesting that your old Sven, but, uh,

Darren Moffatt: 17:05

But, uh, you know, when you, when you've got a couple, I've got another business as well, and, and, you know, you learn this, you learn these things, you know, like, I mean, uh, you've, you've, you're a young, young gun sort of, sort of first venture out of the blocks. You're making mistakes. You, you, you're taking, you know, the, the fastest path you can do and that's fair enough. But, uh, I think that's really notable for our listeners that you, again, taking some harder decisions, they're not pushing it so hard, straight out of the Gates, and dare I say, going for a more organic approach.

Sven Almenning: 17:36

A hundred percent. Yeah. I find it creates a lot less stress on the team. Um, it creates a bit less stress on it on a, on a, on a venue. We never had investors until like last year or so, again, it also means without investors less stress on the, uh, financial, um, and you can focus on getting the product right, and, and listening to what the customers are saying, taking their feedback constantly tweaking and improving and making things better for them. So that when you are getting some level of scale, you're getting level of scale on a protested and tried proven quality product, rather than one that's riddled with bugs and flaws. And, you know, you have bugs in, in venues as well, not in terms of the actual bugs, but things that aren't working, you know systems are failing, things are not picking up.

Sven Almenning: 18:20

It takes a while to get that right. And it's in hospitality venue, we don't have that, technology that is easy to go through and find the code. You know, we're looking at it, specific people, have you hired the right personality? So now we tend to think of our team. Well, actually, since we opened up the, be the first one, we approached our team as a football team in a way like we had, so we needed a nerd who could come there, and customers could talk forever about booze and cocktails to some guy who was just crazy and all that stuff. And, but we needed a machine who could just talk in, smash the drinks out really quick while the nerve was taking time and entertaining, you know, talking to people when either someone flamboyant on a door that would welcome you and make you laugh and make you feel welcome and settle you down, you know, we needed hustlers that could run. So, you have like personality traits that you need to be hired against, right. As opposed to just hiring on these people know cocktails, and these people know why, and then you got an assist. That team, is that the right formula, right? So, you want to have it right by the time it hits. So, what are the chance?

Darren Moffatt: 19:24

So, you use a really bad pun here. Um, the staffing is, is like getting the perfect cocktail. Right?

Sven Almenning: 19:33

That's exactly right. You get the ingredients right.

Darren Moffatt: 19:33

Couldn't resist it, man. It was just, it was, it was, it was the left it wide open for me. Uh, but that, that is a very interesting point that you, um, you are, uh, engineering that the staffing and the HR, the human resources to, for maximum user experience.

Sven Almenning: 19:54

Yeah. That's right. A hundred percent. Yeah. And that is everything. And that's the one thing that our industry does so poorly. I think, you know, hospitality, a lot of people, venues focus on the, fit out, the fit out, the fit out, the fit out, the fit out, and they're spending all that money in a fit out, and then they drop their team in with two days training and you go, well, the, the fit out is the backdrop that your staff are performing. And that's, that's the back of the stage. And that's, you know, but they are the performers. They're the, if you go to a theatre, it's the actors, did they live when the experience right. That the backup is just there to create the environment that, that perform at. But a lot of venues I feel just focus on getting the great stage and then don't pay attention to what actors they hire, you'll learn on stage, you know? Um, yeah. That's one problem that we have in our industry.

Darren Moffatt: 20:46

One entrepreneur who knows how to execute a successful go-to market strategy is health and wellness expert. Jess Sepel of JS health. Jess is a qualified nutritionist, who started blogging while she was studying back in 2010. The blog quickly grew into an online community, which now encompasses more than 400,000 people across Instagram, Facebook and email. In 2020, JS health vitamins received the Deloitte technology fast 50 awards for achieving a 21540% growth in one year. That's incredible. So, listen to what Jess has to say about her recommendations for launching a new product. Let's maybe sort of go back in time a couple of years now, you've, you've not long after you launched the vitamin business. Like when did you realize when you really had that product market fit? You know, when you really, when, when you put the offer out, out to your community, out to the public and, and it just really seemed to lock in, and you just kind of, you know, no doubt there was a moment where you, you know, you looked at your husband and you went, this looks like it'd probably work. Like when was that? And, and what were the signs that you had the product market fit?

Jess Sepel: 22:04

I probably would say that happened before we launched the vitamin range, which was when we, when we created an eight-week program, which was probably our first online product. And that's when it sold so much more than we expected. And it was a solid, solid business. You know, it was only my husband and I, and one or two other staff members at the time. And it was just, it was providing enough income for us to all be on salaries and, you know, have, you know, have a lovely little, small business, it was a tiny business, but it was enough at the time. And that's when I think that was the moment where we're like, oh, well, we clearly have an engaged community. They really respect the grant. They really love our philosophy. That was my moment of like, wow, this could be a business. And that's the exact moment.

Jess Sepel: 22:45

My husband came from a tech background. He was in his own tech company, and he transitioned into JS Health because that eight-week program had quite an enormous amount of success. Then we created the app and then that's when the bite, so that the moment happened when the bit for this to be a business was probably before the vitamins happened. But still, when you come out with a vitamin range, you cannot think, or assume that you're going to sell all vitamins, just because you've been able to self-publish books or programs or an app, you know, so in the process, the moment happened probably when we sold more hair and energy, the first product than anticipated, I told you, we ordered only 2000 bottles and we sold that in much faster than expected and anticipated. And I think, you know, it's much harder for new companies who don't have a social media following or don't have a community.

Jess Sepel: 23:35

I was very, very blessed to have had built that for that for five solid years, the community was very much solid. And, and that's what allowed me to then create a product range. It's much more difficult if you have to, you know, find the community and find the customer, but it did sell faster than expected the first product. And that's when my husband and I were like, wow, now we have the funds to create the second vitamin and then third vitamin and the success from the second and third vitamin allowed me to then think about the fourth vitamin. You know, so each, each product could only happen because of the success of the prior product. So, if it hadn't been my eight-week program, if we hadn't had success with that, we wouldn't have had the funds to then, to create our first vitamin, which cost maybe like 20 or $30,000. We wouldn't have had that money. Um,

Darren Moffatt: 24:29

I love that. I mean, that's something I talk to my team about sometimes the concept of, I call it building blocks. So, what you just explained there, you know, you sort of, you're building a foundation, you're getting something up and running. It gets to a certain point. That's a bit self-sustaining, uh, then you can build on top of that, you know, and it's through that kind of that process of building blocks, that something becomes really quite large.

Jess Sepel: 24:55

Exactly. So, I think as entrepreneurs and business owners, you don't, you can't try do it all at once. You know, sometimes exactly. We say you have to start somewhere with one building block, try and create success out of that build and build on it. It might take longer than expected, you know, for us, you know, only after five or six years, could we have the ability financially, um, to create a product range.

Darren Moffatt: 25:20

Yep. And you know, when you did launch, um, you know, that first product, or, you know, maybe, um, you might want to consider the second or third product for this, but like when you, when you launched products, what, what's your go to market strategy? Like, you know, how do you, how do you get it out there? How do you launch it? How do you promote it? Um, maybe step us through that, if you could.

Jess Sepel: 25:40

It's definitely the first thing that happens is we announce it to our community who are present on our, normally subscribed to our EDM, you know, our weekly newsletter. And then we announce it to our social media community, which is hundreds of thousands of people. Um, and then we, our retailers normally announce it, pharmacies announce it. The main strategy is a lot of digital marketing. So, a lot of, um, Facebook and Instagram ads, but I have to be honest again and tell you for us, it's a very organic, because we are so lucky and fortunate to have a social media following. When we announce a new product, that’s really the place that they come to check up on it. And then now a lot of those people have gone to our website, and they've become subscribers to the website. And that's our main way of announcing the new product to them.

Darren Moffatt: 26:34

If you've ever run a business, you'll know that managing employees and staff is often the hardest part of all. Well, our next guest is founder of a software company that is rapidly making that problem disappear. Ben Thompson is the founder of employment hero, a complete people, payroll and benefits solution for smaller, medium sized businesses. Apparently, it can reduce admin time in your HR function, By up to 80%. Employment hero has over 5,000 paying businesses, collectively managing over 300,000 employees. And they've also raised a something in the order of $30 million capital. So very significant business. Ben himself is a seasoned entrepreneur and investor. And what you're about to hear, he shares some really useful insight into the processes his team use for a go-to market strategy. Going back what, maybe four, five years ago, five, six years ago, five, six years ago, what was your go-to market strategy? You know? Um, and, uh, it's so if you can cast your mind back to that and, and how has that worked out for you? I mean, I'm keen hear, you know,

Darren Moffatt: 27:45

maybe things that you thought might work that didn't things that you didn't think would work that did. And also, in particular, how you got your early adopter users. Yeah.

Ben Thompson: 27:56

Friends, thankfully I've got a network of entrepreneurial friends. So, um, I managed to tap all of them on the shoulder and say, hey, can you, can you use my product and, and let me know how it works for you. Um, so that was one way in terms of, um, what didn't work. We spent a lot of money, uh, early on, on a campaign that we could call the shots campaign. And we, we built a, um, job board and an, um, and we made it free. And my misguided hypothesis was that if we helped employers recruit people through its free job board, then they would need to onboard the people that they had recruited and then manage those people. And that we already had the onboarding and, and management piece at the back. Um, but that by creating this two-sided market around a free jobs board, we could generate a whole bunch of demand. Um, what we discovered and what didn't really work was that we could get employers on there but getting enough employees on there and getting that two-sided market to synchronize and have enough demand on either side, it was much more expensive undertaking than we ever envisaged. And so, we spent a lot of money on it, and we realized that we'd spent 1% of what was required. Yeah. Um, you know, seek and, and companies that have really cemented two-sided markets. They're very, very hard to disrupt.

Darren Moffatt: 29:22

That's hard to do. I mean, you know, to build a two-sided market, even at a relatively small scale is hard, you know, because, uh, as you alluded to equilibrium gets out, it just doesn't kind of work. Um, you know, going back

Darren Moffatt: 29:38

too, so you tap the friends, friends’ social network. Yeah. It was, that was key. Um,

Ben Thompson: 29:44

The next thing we did wrong was, um, actually this is something that is now become really important to us as a business is, um, we're constantly encouraged to work with large businesses. People go, Oh, wow. You know, you, who do you work with? And I said, no one everyone. And no one that, you know, you know, we've got 7,000 companies on our platform. Yeah. But we don't have Westpac or, you know, we don't have huge corporates. And they're like, oh, well, do you think you'll get to a point where you can work with the big companies? And I say, no, we don't want to, like, that's actually an anti-goal. As I said, at the very outset 99% of the companies on the planet, are SMEs, they're the ones that really need the help. And they employ 70% of all people. If we forget that and we start trying to work with the big companies, we've forgotten our whole point of being, which is to help the small companies.

Ben Thompson: 30:35

So, we don't aim to work with big companies, but we did make the mistake early on when we were trying to get going. We wanted revenue. And so, we, we, we won some pretty big, um, companies. And what we discovered then was that was a massive auntie goal because the bigger the company, the more they paid us, the more demanding they could be on our product roadmap. And they would tie our dev team up for, for months trying to develop things that they needed, that our customer base, the SMEs didn't really value at all. And so, the product ended up going off in different directions that we didn't need, and we just didn't have capacity to build the things we needed. And so, we actually, um, ended those contracts. We terminated those contracts with the larger employers, because we just couldn't justify having so much capacity to have capacity tied up on those few customers.

Darren Moffatt: 31:28

That's a gutsy move. That must have been something you talked about quite a lot internally. I would imagine. I mean, um, I don't know how much those contracts were worth, but you know, there's a, there's a sort of a sense of validation and security that comes from, you know, those kind of partnerships. Is it something that you deliberated over for a long time or?

Ben Thompson: 31:49

No, I think it was, um, it was sensible. Like they weren't happy, they weren't getting everything they needed. They were sort of complaining that we were a immature platform and that we couldn't do all these sort of enterprise features that they needed and where we're saying, well, we don't want it to build those. So it was, it was kind of mutually understood and we had to go that way. Um, but we did also at that time, we realized we had to completely rebuild our sales and marketing approach as well because, um, we had designed our wrongly designed our sales and marketing approach around a more enterprise focused sales approach. Um, and we completely stripped it all back and focused on high cadence. And I brought in a new sales manager and Claire who's brilliant, has done a great job in building this super high cadence sales team. Most of our deals that we almost have , um, clients that we sign

Ben Thompson & Darren Moffatt 32:40

Up for each month have found us for the first time in that month, seeing the product and converted in the month about a 15-day sales cycle. It used to be like a 90-day sales cycle. And we're trying to keep that, driving that down and down and down. So, um, yeah, don't, don't, um, don't chase the big fish, you know, it just, it's, there's something about humans. And when we drive into a city and we see tall buildings with logos on the top, we think, wow, that's the pinnacle, you know, we have to go after those, those names on the top of the big, tall buildings actually do completely the opposite. The people that need your help are the ones that aren't there, that everywhere that all around, you just go out and figure out how to get to them. Yeah, that's great advice. I mean, uh, you know, our agency, we work with small business. We've occasionally been seduced, uh, occasionally been seduced by the, the larger sort of corporate client. And, uh, I can relate to what you just said. Um, and of course, you know, that's also where the numbers are for you guys. You know, if you look at it, it's sort of the wide based, you know, sort of the wider, the base, the bigger the pyramid, you know, so that's, that's where the, the quantum of the market is.

Darren Moffatt: 33:54

If I told you there was a bank that was such a hit with gen Y and millennial consumers that they sold out of their promotional merchandise, I'm sure you think either I was crazy or maybe I'd spent too long at the bar. Well, it's true up bank is a next generation Australian digital, or neobank, uh, they launched in 2018 and have already amassed 250,000 very happy customers. Anson Parker is the product visionary behind up. He has a long track record in delivering exceptional products. Most recently, working with technology start-ups in Australia and San Francisco. I asked him to reveal the secrets behind the success of their go-to market strategy. When you were kind of ready to properly launch and really push it out there. You know, what, what would you, what would you go to market strategy, uh, for the initial product range and, and how has that worked out for you?

Anson Parker: 34:50

Yeah, well, our go-to market strategy was not a bank, essentially not be, not, not, not get into this, uh, this whole question of switching, which is a bit of banking jargon, but basically in banking, it's very hard to get new customers, uh, because people really stick to their bank. They're generally very loyal and very few people year to year move banks. I think it's maybe 5% of people will switch banks in a year. So, if you kind of extrapolate that out, that means people switch banks every 20 years. Um, uh, and so we didn't want to be going in there, going out there as like, hey, is this a new bank switch to switch to up? You know, because that's a really tough sell. Um, and, uh, particularly for a bank that didn't exist the day before. So, you know, we're in this new kind of ah world of, you know, app apps and smartphones.

Anson Parker: 35:41

And so, our pitch has been very much like it's easy to try. There's no, there are no fees. Just give it a shot and see what you think. And, you know, if you know someone that's on UP already, we built this whole, uh, referral program. So, you'll even start with, you know, five bucks in your account. So, our idea was that you could see a, like a, a fly for up at the cafe. And by the time you got to the front of the line to order and pay, you could actually be a customer and like pay on your phone with up, um, to pay for that coffee. So, it was really important. It was like really, really fast and simple to get set up so we can start to demonstrate that value because I think that's the other challenge for, for UP in particular, is there's not massive, necessarily hard to satisfaction with, um, that they will have with their banks.

Anson Parker: 36:25

There's all sorts of issues going on around trust. And did I think the bank is a good people and all that sort of stuff, but in terms of like satisfaction with the service, um, they're not like dissatisfied or like definitely looking for something else. So, there's an element. Um, I mean, certainly some people are, but there is an element to what we're doing, which is like making the case, right? Like, hey, banking can be better. We can deliver something much better. Um, and they, you should demand something a lot better from your bank. And so, for us, it's about showing those benefits, uh, without boring people too, like we can, we can nerd out about, you know, data modelling and real time events and stuff like that. Um, but ultimately, it's that experience of tapping your phone, of getting that instant notification that you just paid for that coffee. Those are kind of the actual moments where customers can feel the value and see the difference that up can provide. So, yeah, it really comes down to that. Like, how do we get people on this as quickly as possible, maybe even with a few bucks to spend so they can actually see for themselves what this is all about,

Darren Moffatt: 37:22

Where are you at? And, you know, I'm curious around the choice of demographic, you know, because you guys have clearly skewed young, you know, you and you, the data you shared earlier on the customer base, um, bears that out. Okay. So was it deliberate when you were starting to put up together that you would go younger because those banking relationships that become ossified as people get older, um, uh, you know, that, because that problem's not there, like, if you, if you, if you're introducing a younger cohort onto your app, you know, they haven't really developed, you know, banking relationships or if they have that, that, that don't really mean much at that point. And certainly, right up until probably the mid to late twenties, people are more fluid and, and open to change. But once you start getting into the thirties and particularly the forties in the fifties, by that stage, as you said, it's really hard to get people to change. So, was that part of the design thinking right at the start to deliberately target that younger cohort for those reasons?

Anson Parker: 38:28

Yeah, I think it was kind of a, yeah, definitely was the factor in, but it also just kind of worked perfectly with, with our approach, which was to focus on transactional banking in the sense that, that works, that that sort of covers the need for that group too. But absolutely. We understood that. Um, yeah, basically no one in Australia really chooses their bank or at least if they're first bank, right, like typically your parents, maybe you got like a dollar mite or whatever it is at school or, or otherwise, it's probably just, your parents set you up an account, you went into a branch for them, and they gave it to you. So, this idea of, of introducing choice, uh, and even like more interestingly, perhaps that, that the bank you choose could, could speak to who you are, you know, like we've seen that as sort of some of the ethical banks. And I think that up is very much, uh, in that space too, that no one ever probably thought that, like, that was a question like that you'd even talk about. It's like your bank is just your bank and they're in the background. And as long as they don't stuff up too badly, you're happy. But this idea that that could be something you'd wear on a t-shirt, or a hat is I think something new that, but that we're absolutely seeing with up, you know.

Darren Moffatt: 39:31

Well, that's right. I mean, you guys are famous for, um, your, you’re merchandising and like you've got your, your, your customers and your fans are going crazy over some of your merch, is that right? Like they, like I see, the coffee cups, the branded coffee cups and stuff. Um, really clever little videos, video graphics on your Facebook page. Um, that's all part of the experience. Right? Tell us a little bit about that and how people are responding to the, uh, to the branded merch.

Anson Parker: 39:57

Yeah. I mean, I think it like, always from the start, we kind of wanted to be more brand in that space. Right. But we didn't really see that coming necessarily. I think the first hint of it was we, like, before we even launched, we kind of had a waitlist and I sit down, like, I'll give you an update. Here's how things are going and right at the very bottom. I put like a, oh, like if you made it this far, like grab a t-shirt, and then all of a sudden there was like 200 people at one of these t-shirts. So, like what what's going on here. Um, and then we do it a few in person events and merch fly off constantly. And then people are constantly writing into merch and be like, oh yeah, this is why we love it. It's fantastic. It's so exciting that people love the brand that much, that they want to represent it and then send us photos of them wearing their t-shirts. And it's just incredible.

Darren Moffatt: 40:38

And let's not forget for a second here. Um, this is a bank we are talking about. I was like, you know, you don't see people running around unless they've had a gun held to their head wearing a, um, you know, a NAB or a Westpac or a CBA, a t-shirt. And now another word from our sponsor.

Ben Carew: 41:04

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Darren Moffatt: 42:10

So, the problem we set out to solve in this episode was launch marketing, how to promote your new product or service to the market, for the first time. Our product design expert Ross scales from pollen revealed his killer hack. And we've also heard some fascinating, real-life stories from our entrepreneur guests Sven at the speakeasy group, Jess, from JS health, Ben Thompson of employment hero and Anson Parker of up bank. I hope their wisdom and insights have given you some ideas to crack the code to growth in your own venture. For me, there are three really important takeout from this episode. Number one, start early and start small. We heard this from several of our guests, although it's a contrarian approach, it's clearly been a big factor in the success of Sven's hospitality business in particular. Number two, test and learn, as Ross said, the launch phase should be about of course building profile, but it's also an opportunity to keep getting data and learnings on what works for customer acquisition and what doesn't.

Darren Moffatt: 43:22

And number three, build anticipation. I love what Anson had to say about using a pre-launch waitlist to grow a database of future customers and build demand for the product before it's released. As we heard in the top of the episode, in the vegemite story, it doesn't matter how well established your brand is when launching a new product, it counts for nothing. If you get the release strategy wrong. Perhaps the key insight here is that when it comes to product development, the learning phase never ends, just because you've launched and got the product to market, doesn’t mean you can relax. In fact, quite the opposite. It's just the beginning, but if you get the launch, right, it's the foundation stone for a winning product that can power your business to fame and fortune. We're coming to the end. But before we go, it's time for the last of our regular segment nerd under pressure for this series, today, we give the final word to our other product design expert, Carrie Peters, let's find out what killer hack she recommends for the go-to market phase. Okay. Uh, Carrie from us to, uh, here is a recurring segment at nerds of business, we call....

Speaker 9 44:44

Crash

Darren Moffatt: 44:47

Nerd under pressure. Uh, it's tense here, it's tense in the studio. Um, so this is nerd under pressure and we're asking, uh, you Carrie as the product design nerd, uh, one killer hack for the launch phase. So, what, you know, when an entrepreneur or a business has, um, you know, they've, they've, they've created the product going to market, what’s one killer hack you could recommend for the go-to market strategy. I'm going to give you five seconds thinking time.

Carrie Peters: 45:22

Okay. Um, so you take the people that you've been interviewing all along, um, and you let them sort of be the basis of, of, um, your marketing strategy. So, you, um, send them into groups of alpha and beta users. You tell them that they are your early adopters and they're going to get special treatments. They get early access to things. Maybe you send them little kits of, of, you know, thankyou's and, and whatnot. Um, or, and you give them tools to spread the word, um, let them invite other people to the platform or the service or the product that, um, that they want to bring in. Um, and I think when you let people kind of feel like they're part of that co-creation process, um, they've been there through the whole journey, and then they're the ones that kind of get to bring other people in. Uh, there's a lot of value in that.

Darren Moffatt: 46:12

So, thanks for listening to episode 22 of the nerd’s business podcast. This brings us to the end of the product development series. It's been heaps of fun, and I hope you've learned a lot along the way. If you haven't left a review already, please rate us review or rate us on Apple or Spotify, Google, wherever you get your podcasts. If you've got a question or some feedback, we'd love to hear from you, you can engage with at webbuzz.com.au forward slash nerds. That's webbuzz.com.au Forward slash nerds. So, feel free to reach out and say hello. I want to thank all of our guests over the course of this season. So, thanks to Ross Gales, Carrie Peters, Sven Almenning.