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What Angel Investors Want to Know Before Investing in Your Startup

Posted: 05 Dec 2020 05:26 PM PST

Angel investors invest in early-stage startup companies in exchange for a stake in the company. Angel investors hope to replicate the high-profile successful investments made in companies like Airbnb, Facebook, Instagram, WhatsApp, Uber, and more. Angel investors typically make small bets ($25,000 to $100,000) with the hopes of getting "home run" returns.

Angel investors understand that startups have a high risk of failure. So ultimately an angel investor needs to feel confident that the potential upside/rewards from investing are worth the downside risks.

Angel investors review a variety of key issues and undertake due diligence before they invest in a startup. In this article I discuss the key items angel investors analyze in deciding whether or not to invest in a startup.

1. Is there a great founder/management team?

Many investors consider the team behind a startup more important than the idea or the product. The investors will want to know that the team has the right set of skills, drive, experience, and temperament to grow the business. Anticipate these questions:

  • Who are the founders and key team members?
  • Have members of the team worked together before?
  • What relevant domain experience does the team have?
  • What key additions to the team are needed in the short term?
  • Why is the team uniquely capable to execute the company's business plan?
  • How many employees does the company have?
  • What motivates the founders?
  • How do you plan to scale the team in the next 12 months?

Ultimately, the investor will need to make a judgment about whether the founder and team will be enjoyable to work with. Does the investor believe in the team? Is the CEO experienced and willing to listen? Is the CEO trustworthy? Also, involving experienced advisors can be very helpful in the early stages to help bridge an early-stage team that is still growing.

2. Is the market opportunity big?

Most investors are looking for businesses that can scale and become meaningful, so make sure you address up front why your business has the potential to become really big. Don't present any small ideas. If the first product or service is small, then perhaps you need to position the company as a "platform" business allowing the creation of multiple products or apps. Investors will want to know the actual addressable market and what percentage of the market you plan to capture over time.

3. What positive early traction has the company achieved?

One of the most important things for investors will be signs of any early traction or customers. A company that has obtained early traction will be more likely to obtain investor financing and with better terms. Examples of early traction can include the following:

  • The creation of a beta or minimally viable product
  • Initial or pilot customers, especially brand name customers
  • Strategic partnerships
  • Customer testimonials
  • Admission into competitive programs such as Y Combinator or other technology accelerators or incubators

Investors will want to know how the early traction be accelerated? What has been the principal reason for the traction? How can the company scale this early traction?

Don't forget to show early buzz or press you have received, especially from prominent websites or publications. Feature the headlines in a slide on your investor pitch deck. List the number of articles and publications mentioning the company.

4. Are the founders passionate, determined, and in it for the long haul?

Many venture capitalists look for passionate and determined founders. Are they individuals who will be dedicated to growing the business and facing the inevitable challenges? Startups are hard, and investors want to know that the founders have the inner drive to get through the highs and lows of the business. Investors want to see genuine commitment to the business.

5. Do the founders understand the financials and key metrics of their business?

Investors look for founders who truly understand the financials and key metrics of their business. You need to show that you have a handle on all of those and that you are able to articulate them coherently.

Here are some key metrics that angel investors will care about:

  • Monthly burn rate of the business
  • Projected growth in revenues
  • Gross margin
  • Lifetime value of a customer
  • Customer acquisition cost
  • Key components of gross revenues and gross expenses
  • EBITDA
  • How long it will take to get the company to profitability
  • How much additional capital will need to be raised in the future, and when
  • Other key performance indicators of the business (KPIs)

6. Does the investor know the entrepreneur? If not, has the entrepreneur been referred by a trusted colleague?

If the investor already knows and likes the entrepreneur, that is a big advantage. If the entrepreneur doesn't know the investor, the best way to capture their attention is to get a warm introduction from a trusted colleague: an entrepreneur, a lawyer, an investment banker, another angel investor, or a venture capitalist. Angel investors get inundated with unsolicited executive summaries and pitch decks. Most of the time, those solicitations are ignored unless they are referred from a trustworthy source.

7. Is the initial investor pitch deck professional and interesting?

The first thing the investor will expect is to see a 15-20 page investor pitch deck before taking a meeting. From the pitch deck, the investor hopes to see an interesting business model with committed entrepreneurs and big opportunity. So make sure you have prepared and vetted a great pitch deck. Reviewing other pitch decks and executive summaries can help you improve your own. See A Guide to Investor Pitch Decks for Startup Fundraising.

8. What are the potential risks to the business?

Investors want to understand what risks there might be to the business. They want to understand your thought process and the mitigating precautions you are taking to reduce those risks. There inevitably are risks in any business plan, however, so be prepared to answer these questions thoughtfully:

  • What do you see as the principal risks to the business?
  • What legal risks do you have? Will the business model comply with applicable laws, including expanding privacy protections?
  • What technology risks do you have?
  • Do you have any regulatory risks?
  • Are there any product liability risks?
  • What steps do you anticipate taking to mitigate such risks?

Startups that can show they have reduced or eliminated product, technology, sales, or market risks will have an advantage in fundraising.

9. Why is the company's product great?

The entrepreneur must clearly articulate what the company's product or service consists of and why it is unique, so entrepreneurs should expect to get the following questions:

  • Why do users care about your product or service?
  • What are the major product milestones?
  • What are the key differentiated features of your product or service compared to competitors?
  • What have you learned from early versions of the product or service?
  • What are the two or three key features you plan to add?
  • How often do you envision enhancing or updating the product or service?
  • Do you have any favorable customer reviews?

10. How will my investment capital be used and what progress will be made with that capital?

Investors will absolutely want to know how their capital will be invested and your proposed burn rate (so that they can understand when you may need the next round of financing). It will also allow the investors to test whether your fundraising plans are reasonable given the capital requirements you will have. And it will allow the investors to see whether your estimate of costs (e.g., for engineering talent, for marketing costs, or office space) is reasonable given their experiences with other companies. Investors want to make sure at minimum that you have capital to meet your next milestone so you can raise more financing.

11. Does the company have differentiated technology?

As many angel investors invest in software, internet, mobile, or other technology companies, an analysis of the startup's technology or proposed technology is critical. The questions the investors will pursue include:

  • How differentiated is the company's technology?
  • What competitive advantages will there be over existing technology?
  • How easy will it be to replicate the technology?
  • How costly will it be to build the technology into each product?

Related to that, the angel investors will do due diligence on the key intellectual property owned or being developed by the company, such as copyright, patents, trademarks, domain names, etc. Is the intellectual property properly owned by the company, and have all employees and consultants assigned the intellectual property over to the company?

12. Are the company's financial projections believable and interesting?

If your startup presents investors with projections showing the company will achieve $1 million in revenue in five years, the investors will have little interest. Investors want to invest in a company that can grow significantly and become an exciting business. Alternatively, if you show projections in which the company predicts to be at $500 million in three years, the investors will just think you are unrealistic, especially if you are at zero in revenues today.

Avoid assumptions in your projections that will be difficult to justify, such as how you will get to a 400% growth in revenue with only a 20% growth in operating and marketing costs.

In order to believe your financial projections, investors will want you to articulate the key assumptions you have and convince them those assumptions are reasonable. If you can't do that, then the investors won't feel that you have a real handle on the business. Expect that investors will push back on the assumptions and they will want you to have a reasonable, thoughtful response.

13. How will the company market its products or services?

Investors know that building a great product or service is not enough. The company must have the beginnings of a well thought out marketing plan. The marketing questions will include:

  • Who is your target market?
  • What are the best ways to approach the target market?
  • What do you anticipate the customer acquisition costs to be?
  • How will you employ social media to attract customers?
  • How will you use paid search through Google, Bing, Facebook?
  • What PR do you intend to employ?
  • How will you make sure that your website is search engine optimized?
  • Will you be engaging in content marketing?
  • Will you be relying on third-party distribution channels? Are those third parties sufficiently excited and incentivized?

14. What are the specific terms and valuation of the financing round?

Angel investors may ask the following questions about the financing round:

  • How much is being raised?
  • How much is already committed by investors?
  • Are any prior investors participating in the round?
  • Is there a well-known investor leading the round?
  • Is there a minimum amount of capital being raised before a closing occurs?

Valuation will be an important issue for the investors. If you tell an investor you want a $100 million valuation even though you started the business three weeks ago, or don't have much traction yet, the conversation will likely end very quickly. Often, it's best not to discuss valuation in a first call/meeting other than to say you expect to be reasonable on valuation. But the investor also doesn't want to waste a lot of time on a deal if the valuation expectations are unreasonable or not attractive.

Valuation at an early stage of a company is more of an art than a science. To help bridge the valuation gap for early-stage startups, you often see investors looking for a convertible instrument with customary conversion discounts and valuation caps. These instruments, such as convertible notes and "SAFEs," have become quite common.

Final Tips for Entrepreneurs Seeking Angel Investors

Here are some concluding tips for entrepreneurs seeking to obtain angel financing for their startup:

  • Target angel investors who invest in your location (San Francisco, New York, L.A., etc.). Some investors will only invest in companies located near them.
  • Target angel investors who invest in your space (software, internet, mobile, biotech, cleantech, etc.).
  • Have a great 15-20 page investor pitch deck.
  • Practice your pitch and get feedback. Be prepared to have pitch meetings through Zoom or other video platforms.
  • Do a product demonstration or have a well-produced video prepared.
  • Make sure you have researched the competition and anticipate the questions you may get about competitors.
  • Show the investor that there is an opportunity for a big exit (M&A or IPO) in three to seven years.

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Copyright © by Richard D. Harroch. All Rights Reserved.

The post What Angel Investors Want to Know Before Investing in Your Startup appeared first on AllBusiness.com. Click for more information about Richard Harroch. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

Top 7 Ways to Improve the Live Chat Experience for Your Customers

Posted: 05 Dec 2020 11:02 AM PST

By Deevra Norling

Consumers today prefer live chat over more traditional channels to handle customer service issues, according to J.D. Power. It’s become a quick and efficient way of resolving problems—or at least, it should be. If your live chat isn't being handled right, it can lead to frustrated customers who will leave your website and never return.

To keep customers happy, here are seven ways to improve your customers' live chat experience:

1. Be responsive

The main reason live chat is so popular with customers is immediacy. When it comes to customer service, 82% of customers rate an immediate response as very important when they contact a company with a query. Anything longer than 10 minutes is too long.

Offer fast response times, immediate rerouting to the relevant department, and quick resolutions to complaints. Using tags can help you categorize, search, and resolve queries quickly. Make sure you have a large enough team to avoid long wait times, especially during busy periods.

2. Prompt visitors with a question

If you're reluctant to initiate a conversation with a visitor to your website for fear of chasing them away, don't be. Research shows that 52% of customers are receptive to a live chat prompt.

Chats are a great lead generation tool when used effectively. New visitors to your website may be searching for information. Using live chat to initiate a conversation and offer assistance could prevent them from leaving before they find what they're looking for.

3. Be human, not robotic

During a live chat, customers should feel like they are talking to a real person, and not a bot. This is a chat so it should be conversational and in the first person; communication should not be too formal or come across as scripted. "Let me look into this right now" is more personal than "We at XYZ are here to help."

Train your chat agents to create a human connection and infuse your brand's personality into chats. They should be cheerful, eager to help, and express empathy to customers' who are experiencing problems. Agents should be adept at reading customers' tone. Some customers may enjoy friendly banter while others prefer a business-like approach.

4. Include the option for video chat

If you really want to kick things up a notch, implement live video chats. Face-to-face interaction allows agents to pick up on customers' demeanor through their facial expressions and body language and respond appropriately.

Because a video chat is more personal than text or voice chat, it can help diffuse tense or irate customers. It's easier to yell by text or in a voice chat, but when customers see a human face, their aggression tends to dissipate.

Video chats also offer another benefit. They are useful when visual instructions will be more effective than text in assisting a customer.

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5. Integrate live chat with other platforms

For the most efficient customer service, choose an omnichannel system that integrates with other business systems and platforms. Customers contact your company by phone, email, on social media, and via the chat widget.

A multichannel CRM system can pull interactions from customers from multiple channels and centralize everything. It uses a ticket system that makes it easy for agents to view all previous interactions and offer assistance quickly.

If you run an e-commerce store, integrating your e-commerce software with your CRM system means you can respond to sales queries immediately and follow up on customers who did not complete a sale. Imagine what that could do for your sales revenue?

6. Incorporate automated chatbot responses

While live chat is always preferable to a chatbot, there are times automated chatbot responses are necessary. Chatbots can fill in during times when live agents are unavailable and can provide standard information about your company.

If your live chat is only available during office hours, set up a chatbot after hours to let customers know when you will be able to attend to their query. Make sure you actually do respond when you say you will as nothing makes a customer lose trust in a brand faster than false promises.

You can also use a chatbot to provide automated answers to frequently asked questions. If a customer finds the answer to their question, it saves them time and it reduces the number of customers in the live chat queue.

7. Ask for feedback at the end of a chat

Some companies run a superb live chat service but skip one important step: requesting feedback. You'll be surprised at how many customers are happy to offer their opinion and appreciate the chance to do so. Asking customers to provide feedback is a great way to further improve your customer service, alert you to product or company weaknesses, and identify potential opportunities.

For a higher response rate at the end of a live chat, keep your questions short—up to a maximum of five. Multiple-choice questions are faster to answer, but include one open-ended question so that customers can provide additional feedback in their own words.

Why it's important to improve your live chat experience

Real-time chats are fast becoming the preferred method of communication between businesses and customers. Not only can it improve customer service, live chat can also increase conversions and boost revenue.

A survey by Anderson Consulting showed that 62% of online customers say they would buy more products from a company with live chat support. Another survey reported by Invesp revealed that shoppers using live chat tend to spend 60% more on purchases.

More customers are shopping online than ever before. So, it makes sense that they also want immediate access to online support during and after their shopping experience. The more robust, seamless, and efficient your live chat service is, the more customers will want to return and purchase from you in the future.

RELATED: 9 Ways to Use Facebook Chatbots to Grow Your Business

About the Author

Post by: Deevra Norling

Deevra Norling is a content writer who covers entrepreneurship, small business, careers, human resources, e-commerce, auto insurance, travel, pets, freelancing, and personal development. She also runs a thriving little pet-sitting business.

Connect with me on Facebook and LinkedIn.

The post Top 7 Ways to Improve the Live Chat Experience for Your Customers appeared first on AllBusiness.com. Click for more information about Guest Post. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

How COVID-19 Will Impact the Future of Small Business

Posted: 05 Dec 2020 10:36 AM PST

Covid-19 is running rampant throughout the country, with the number of cases rapidly rising. Pandemic anxiety is growing, and small businesses are feeling the pressure. According to a new Xero report, Emotional Metrics: Small business mindsets during the pandemic, two-thirds of small business owners have reported being concerned about the mental health and well-being of themselves and their employees.

The report illustrates the mental health roller coaster we've been riding all year while the coronavirus has seesawed between spiking out of control and retreating.

How are small businesses coping? I spoke with Ben Richmond, U.S. country manager at Xero, to find out more about the report and what it reveals about the future of small business.

Rieva Lesonsky: The pandemic is lasting longer than most of us initially expected. How do you see that impacting small business owners?

Ben Richmond: The indefinite and uncertain nature of the pandemic has created its own kind of stress, and it's more important than ever that we ask how people are doing, listen, and take any action in this atypical situation.

Lesonsky: When asked about their biggest concerns, small business owners in the study ranked the mental health and well-being of their employees fifth and their own sixth out of six, though I suspect it weighs more heavily on their minds than they admit. How can companies and small business advocates and mentors help them through these tough times?

Richmond: The crisis revealed a fundamental difference between big and small business—small business is more personal. There are no degrees of separation. The choices are devastatingly difficult because there's a face and a family attached to every decision on employment, compensation, and whether the business can go on or not. Yet, it's hard for small business owners to put their hands in the air and ask for help.

In our recent survey of issues and attitudes directly related to the health crisis, nearly 40% said they have never even asked an outside advisor for guidance on financial issues related to the virus. Now is the time for small business advocates, mentors, and advisors to reach out to businesses and show how they can help.

For employees to flourish, sometimes they need to take time off when they feel stressed or overwhelmed. Last year, we repositioned our sick leave as "well-being leave" so it recognizes that people's well-being can be physical, mental, spiritual, or emotional. We want our employees to feel comfortable taking leave for whatever reason. And especially now, with the uncertainties of the pandemic, we've seen how important it is to take time off to care for your own needs.

Lesonsky: The study showed some small business owners were looking for "alternate ways to grow." Can you share some examples of how they're pivoting?

Richmond: According to another study, The Next Chapter for Small Business, conducted by Forrester Consulting on behalf of Xero, there are six consistent themes [shared by] businesses that thrived during the pandemic:

  1. Offered a range of products and services. Thriving businesses were most likely to increase their range of products and services offerings during Covid-19, and are likely to continue doing so.
  2. Customer engagement strategy. These businesses have been more likely to engage with their customers on different digital channels and adopt strategies to acquire and retain customers, including customer engagement tools.
  3. Operations. They have been more likely to adopt solutions to improve their finances, supply chain, and employee management.
  4. Technology adoption. They have also shown a higher percentage of online revenue as well as cloud adoption.
  5. Ecosystem engagement. These companies have been better at leveraging help from governments, partners, and communities—understanding the ecosystems in which their companies exist, the parties involved, and where to go to get help.
  6. Decision-making drivers. They are more likely to look at customer insights and consult advisors, such as accountants and bookkeepers, before making important business moves.

One of our customers, Museum Hack, based in New York, used to lead small group tours at museums, collecting revenue from public ticket sales, private tours, team building tours, and museum consulting. With their in-person tours on hold due to the pandemic, they've gone virtual, pivoting to virtual corporate team-building events. They've more than doubled their previous monthly revenue. The company now offers unique virtual experiences, such as events like "tiny campfire," where they send kits to corporate employees and bring everyone together for a video call with camp games and ghost stories.

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Lesonsky: The report indicates most business owners did not think the PPP (Paycheck Protection Program) was very successful. They say they need help with cash flow.

Richmond: Cash flow is the lifeline of any business, and when faced with economic uncertainty, maintaining a healthy cash flow can make all the difference to a business's survival. To maintain a healthy cash flow, we recommend that small businesses work with a trusted advisor. Small businesses are used to a "do-it-yourself" mentality, but embracing a "do it together" approach by working alongside an advisor can help them gain a competitive edge.

Lesonsky: What's next? How do you think small businesses will fare in 2021?

Richmond: History has shown that following downturns, there is a business resurgence, coupled with incredible feats of creativity and ingenuity.

Looking at how quickly technology adoption advanced during the pandemic, I believe 2020 became 2025. Right now, there's no better time for businesses to get online and into the cloud. In the early days of the pandemic, we saw businesses make moves to operate remotely and get set up with the right collaboration tools. While there are many unknowns around when the pandemic will end, business owners now need to shift from surviving to thriving so they can accelerate growth.

RELATED: The Small Business Guide to Surviving the Coronavirus Crisis—and Thriving Afterwards

The post How COVID-19 Will Impact the Future of Small Business appeared first on AllBusiness.com. Click for more information about Rieva Lesonsky. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

How to Win New Clients and Prospects with Seminars and Webinars

Posted: 05 Dec 2020 10:15 AM PST

By Casey Fuerst

I once had a client, a financial advisor, who believed that an excellent way to attract new business was to do seminars. She would get 20 to 30 people in a room, walk them through some basics of investing or retirement planning, and then set an appointment for follow-up. That was her entrée to gaining them as clients. It’s a solid plan and it works for many financial management professionals. But it wasn’t working for her. She got people in the room, but they didn’t book any appointments.

So, she hired us to help her shape her message. We worked with her to create a simple message and visually appealing presentation. BUT, when we got to the end of our time together, she kept coming back to us to request changes. At the root of it all, the message was too simple for her.

Guided questions got us to her core belief: “Unless I overwhelm and confuse them, they will think they can do it themselves, and they won’t need me.”

Oh boy.

I wish I could say that we turned her around and helped her understand that people run away from confusion and are drawn to clarity, but we didn’t. She wasn’t convinced. We wrapped up the contract and moved on.

Maybe she figured it out on her own, or perhaps she is still struggling to get those clients. Either way, we are now crystal clear in our work: confusion kills new business.

Too much noise only causes confusion

Donald Miller, the author of Building a StoryBrand, says, “What if the problem wasn’t the product? What if the problem was the way we talked about the product?” He adds, “If we pay a lot of money to a design agency without first clarifying our message, we might as well be holding a bullhorn up to a monkey. The only thing a potential customer will hear is noise.”

For this client, that’s exactly what she was doing—adding noise to already overwhelmed people. She falsely believed that she needed to be the smartest person in the room to gain their business. It’s just not true. She needed to be the most knowledgeable in her area. But, more important, she needed to help her guests feel smart, heard, and understood. She needed to give them value that they could grow from, regardless of her role in that growth. She needed to help them solve a problem.

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For any kind of advisor, consultant, or business owner, offering seminars or online webinars is a great method for gaining new business. It’s a chance for potential clients to make a connection with an expert. It’s a chance for the speaker to begin to build trust with the prospects.

Once we understand that, it’s much easier to put together an event that converts.

Key components of a successful seminar

To build a high-converting seminar or webinar, you need the following components:

1. Clear name

Keep it SIMPLE. Choose one challenge to address. Your content should be focused on the thing that you want to be known for.

For example, if you want to be known for your work with high-value clients, create a seminar for this audience. Make it clear whom it is for and whom it is not for. A title like “The lifeline of a $10 million investment,” rather than “How long does it take for your investment to double?,” makes it clear the client base you work with.

2. Valuable content

Remember, the goal of your seminar is to build trust with your guests. Give them valuable content they can use regardless of whether they work with you or not. To do this, you need to help them solve a problem and help them understand that you are the expert.

Your outline might look like this:

1. Name the problem

a. What are the symptoms of the problem?
b. What are the consequences of having and not solving the problem?

2. Tell them about you (without walking through your resume)

a. Show empathy—help them see that you know how this problem can affect them. Perhaps share a personal story.
b. Name 2-4 simple stats that help them see that you are the expert (worked with X people over the last X years, etc.).
c. Share a testimonial from a happy customer.

3. Solve the problem

a. Give them a simple process to solve the problem.
b. Offer tools for them to do it themselves.

4. Show them success

a. Tell them what their lives will look like once this problem is solved.

5. Q&A

6. Call-to-action

3. A call-to-action

Do you have a simple action you want participants to take so you can continue the conversation? Here are some options to consider:

  • “I’ve held four spots on my calendar in the next week to follow up with you.” And then immediately schedule a 30-minute follow-up.
  • “Give me your email, and I will send you a document that adds value to what I’ve taught.” (e.g., checklists, list of related resources, workbook, etc.)
  • Schedule a portfolio assessment.

4. Professional design and space

Don’t undervalue the professionalism of your presentation. Consider hiring a professional to create simple, attractive slides and handouts. If you want to do it yourself, purchase a template and fill in your content.

Consider these sites for templates:

And, pay attention to the space you are in. Does it send the right message? If you are virtual, test your technology beforehand and have a tech support person in place to get on the phone with guests who might be struggling.

5. Follow up

It needs to be easy for your guests to take that next step. Even if they’re not ready, staying top of mind and continuing to add value will make you an easy choice when they are ready.

  • Start with a simple thank-you note. Handwritten notes go a long way, especially when they add a personal touch.
  • Email them additional information in response to a question they may have asked. “I was thinking more about your questions and wanted to send you this to make sure you got the answer you needed.”
  • Call and ask for an appointment.
  • Add them to your newsletter or email list to be invited to future seminars.

RELATED: How to Leverage Social Media to Drive Insane Webinar Attendance

About the Author

Post by: Casey Fuerst

Casey Fuerst is a marketing expert based out of a suburb of Minneapolis. She helps coaches, consultants, and financial advisors fill their sales funnels and earn business with smart, crystal-clear marketing. Download a sample three-month marketing plan at www.tictactoemarketing.com.

Company: Tic Tac Toe Marketing
Website: www.tictactoemarketing.com
Connect with me on Facebook, Twitter, and LinkedIn.

The post How to Win New Clients and Prospects with Seminars and Webinars appeared first on AllBusiness.com. Click for more information about Guest Post. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

How to Use the Power of Escapism in Your Small Business Marketing

Posted: 05 Dec 2020 06:00 AM PST

By Pratip Biswas

"No live organism can continue for long to exist sanely under conditions of absolute reality."—Shirley Jackson, The Haunting of Hill House

This quote, which is taken from one of the most celebrated horror stories ever written, clearly explains the human relationship with escapism, or the desire to be distracted from the problems of everyday life. When life becomes difficult—as it especially is today with the ongoing pandemic—people will indulge in their own kinds of escapism.

Does the popularity of escapism have any real business value? Actually, it does. The need and demand for a good escape into a fantastical world where anything is possible has opened up new opportunities for marketers to establish their brands as heroes.

Achieving escapism: Opening the doors to a fantasy world

Just like there are many tiers of fantasy, there are multiple ways to take advantage of escapism in your marketing.

Escaping with humor: Adobe Marketing Cloud

Humor is the best medicine for the blues, and this is why Adobe Marketing Cloud’s advertisement “Click, Baby, Click” was so successful. The ad shows a completely impossible situation—a company making business decisions based on a high number of clicks, yet it has no idea that all those clicks are coming from a baby.

The humorous ad presents a real scenario marketers and businesses experience every day, but in such a manner that instead of causing distress, the target audience smiles and understands the problem and solution at hand.

Adding a touch of humor, whether it be in your web content or in an ad, is a way to encourage your audience to escape reality, and it makes the solution-seeking process a lot more entertaining. This is why opting for humor when interacting with customers can help you make a positive connection.

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Adobe – Click, Baby, Click

By Pratip Biswas "No live organism can continue for long to exist sanely under conditions of absolute reality."—Shirley Jackson, The Haunting of Hill House This quote, which is taken from one of the most celebrated horror stories ever written, clearly explains the human relationship with escapism, o

Create a new world: Bud Light’s “Dilly Dilly” universe

There are many examples of fantasy worlds that are the perfect escapist heaven. J.R.R. Tolkien's Middle-earth and George R.R Martin's Westeros are both worlds which allow audiences to escape into a universe of fantasy and magic.

Bud Light’s Dilly Dilly campaign features a fantasy world that was similar to the world of GOT. The mix of medieval aesthetics influenced by one of the biggest pop culture sensations and the humor of the nonsensical catchphrase “dilly dilly” went viral, reinforcing the Bud Light brand.

While this type of escapism works, it may not be ideal for all brands. In the case of Bud Light, it worked because the brand happens to be a category leader. “When the category leader creates more demand, the category leader get the lion’s share of that increase in demand,” writes Jeff Haden, a contributing editor for Inc. “If you’re a smaller player like Sierra Nevada and you create category demand, you’re not going to get much of it. If I’m a craft brewer, I’ll get a tiny lift, but the majority of the incremental demand goes to the category leader.”

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"Dilly Dilly " Bud Light Commercial

By Pratip Biswas "No live organism can continue for long to exist sanely under conditions of absolute reality."—Shirley Jackson, The Haunting of Hill House This quote, which is taken from one of the most celebrated horror stories ever written, clearly explains the human relationship with escapism, o

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The power of fun in changing consumer behavior: Volkswagen’s piano stairs

If a brand can offer a certain amount of fun to an audience through a marketing initiative, it can make a big impact. Consider the Volkswagen experiential campaign which turned an entire staircase into a working piano. Each time commuters stepped onto the steps, a musical note played, causing people to unleash their inner artists by walking up and down the stairs to create music.

It was an interesting little experiment that not only offered a unique experience, but also provided people with a fun break from their daily life. Giving your audience the chance to escape the tediousness of everyday life and enjoy themselves for a few moments happens to be one of the best mixes of escapist and experiential marketing.

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The Fun Theory 1 – Piano Staircase Initiative | Volkswagen

By Pratip Biswas "No live organism can continue for long to exist sanely under conditions of absolute reality."—Shirley Jackson, The Haunting of Hill House This quote, which is taken from one of the most celebrated horror stories ever written, clearly explains the human relationship with escapism, o

When technology comes to the foreground: Coca-Cola’s FIFA AR campaign

We are all aware of the wondrous features of augmented reality (AR), but what happens when it is used to provide the perfect experience and escape into a dream world? One of the finest examples of the use of AR comes from Coca-Cola’s FIFA World Cup campaign featuring Xherdan Shaqiri. A large screen showing footage of the Swiss soccer star was set up just outside Zurich’s main train station; fans got to play alongside Shaqiri and take photos with him.

The experiment had about one thousand interactions in two days, proving that providing consumers with experiences that help them achieve the impossible, even for just a few moments, goes a long way to reinforce a brand’s image.

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Coca Cola FIFA World Cup AR Experience

By Pratip Biswas "No live organism can continue for long to exist sanely under conditions of absolute reality."—Shirley Jackson, The Haunting of Hill House This quote, which is taken from one of the most celebrated horror stories ever written, clearly explains the human relationship with escapism, o

It's all about going that extra mile

Businesses exist in a very real and sometimes difficult world. The success of a marketing initiative depends on how much a campaign is in sync with reality. To meet the demands of consumers wanting to escape, today’s brands have to push the limits of what is ordinary and not be afraid of providing bold and new experiences.

RELATED: Using This Effective Psychological Trigger in Your Marketing Can Boost Sales Like Crazy

About the Author

Post by: Pratip Biswas

Pratip Biswas is the founder and CEO of Unified Infotech, a New York-based web design company that was featured in the 2018 Deloitte Technology Fast 500 Asia Pacific ranking. His company works with enterprises, SMBs, and startups to improve their efficiency through digital adoption, and helps them discover new possibilities through constant innovations. Pratip also writes regularly on blockchain technology and has been published in publications like YourStory and DZone.

Company: Unified Infotech
Website: www.unifiedinfotech.net.com
Connect with me on Facebook, Twitter, and LinkedIn.

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