MBA Guides: Corporate Finance Training – Advertising strategy for an e-education portal
Corporate Finance Training is an online education startup still in its formative stages. The firm offers free online courses in Finance. Its product launch is scheduled around Feb-March 2010.
1.1 Key advertising issues for the finance e-education portal
We were asked to devise an advertising strategy for Corporate Finance Training. We were given access to the business plan, the initial product prototype and the entrepreneurs behind the firm. Some of the issues that were highlighted in our initial meetings were Corporate Finance Training has no money / budget for advertising as of now. The initial financing only caters for the burn rate of 30,000 for the next 12 months. It is expected that if any revenues are generated, a certain percentage of these would be devoted to marketing and advertising. However till that happens Corporate Finance Training would not be able to commit financially to any marketing campaign.
On a projected basis Corporate Finance Training expects that it would be able to set aside 98,000 from first year revenues and 1 Million from second year revenues for marketing and advertising expenses.
- Selection of medium, keeping in mind the budget constraints.
- Selection of distinct messages for distinct segments.
- How to maintain year round exposure in key segments with the existing budget
1.2 Key objectives for the corporate finance online education portal
Reach five key segments over a period of two years. Total number of potential customers reached should be higher than 2.5 Million per year.
Generate 25,000 customers a year for minimum annual revenues of 6 million dollars. Grow revenues and new customers by 10% a year for the next 5 years.
Effective reach (actual new customers/potential customers reached) should remain between 1% – 2.5% in any of the next five years.
2.0 Corporate Finance Education – Segmentation – Analysis
We were initially given five key segments that Corporate Finance Training had identified as part of their marketing strategy
- MBA’s (past, present & future)
- Other Certified professionals (CPAs, CFA’s
- Online Investors
- Small Business Managers
However, when we looked at the possible uses of the product by any of the five segments we came up with three main applications
A) Understand basic Finance
B) Increase present level of understanding
C) Use as Reference Guide
Understand basic Finance
Users: online investors, small business managers, present MBAs, MBAs to be
Increase present level of understanding
Users: certified professionals, certified professional societies, actuaries, and entrepreneurs
Use as Reference Guide
Users: small businesses, past MBAs, present MBAs, future MBAs, certified professionals, actuaries, entrepreneurs, and online investors
This analysis is presented in Table 1.0 below
Table 1.0 Product Applications
|Segments||Basic Finance||Incr. Know.||Reference|
These could be further compressed into two key uses.
- Increasing present level of understanding (Basic Finance and Increase Knowledge)
- Using Corporate Finance Training as a online reference
The original segmentation was based on demographics. It was primarily a function of education and professional characteristics. However once we had performed the analysis we thought that a product benefit/application based segmentation would be more appropriate in this case. It would allow us to simplify our message and at the same time reach all of the identified segments.
The reclassified segments are
Learners – Use the product primarily to learn something
Referrer – Use the product primarily to look up information
Learners – Learners are driven by
- Desire for self improvement
- Performance oriented pressure (need to get a job done)
- Competition oriented pressure (need to outperform a benchmark in school or at work)
- Gain confidence in decision making
- Need to get well versed in the “language of business”
This segment is generally willing to pay for learning
Referrers – Referrers are driven by
- Ease of use as reference
- Availability to use as reference
- Reliability & dependability as reference
- Guaranteed success on finding a topic
- Choice between structured or unstructured learning
- Choice between online and offline reference
This segment is generally not willing to pay for reference.
The same person can be a learner and a referrer at the same time. However as explained above, from a revenue generation perspective a “Learner” would be far more attractive customer for a client than a “Referrer”. In an ideal situation a Referrer would use the product a number of times and when he reaches a certain comfort level with the product, he would not mind using it as a learning tool. It would be at this point that he would become a revenue generating customer.
The trick would then be to attract people to the product as either Learner or Referrers and then retain them as paying customers.
3.0 Corporate Finance Education – The Message
Based on the above analysis we see the communication campaign building around the following themes
- Introduce company and establish credibility for content
- Introduce product and depending on the segment explain what it can be used for
- The action component that says “Trust our company and use our product”
With respect to the above themes, the following issues came up during our discussion
There is a lot of advertising out there right now that focuses on the Internet & associated products. We feel that we are dealing with an educated customer who already understands the potential of the Net and the possibilities of online learning. The education has occurred over the past few years with extensive media coverage. The customer now knows what the Net stands for and what are its key benefits. Any advertising that relies on key benefits (functional) of the Net would be simply filtered out by consumers.
Because of the above reason we feel that the message should be able to stand out by itself, independent of the Net and its associated attributes. Which meant that flexibility with respect to time and geographic constraints, ease of use and access, free flow of information, customization, power to the people, etc should not be used as part of our message.
The next decision was whether the message would be product trial or brand trial. We felt that online education is a relatively better understood topic since it’s related to distance learning which has been around for few decades. Other players already have a presence in the market. There are quite a few “knowledge based” sites and search engines and a number of new entrants are expected over the next six months. In such an environment brand trial would probably yield better results since most of the earlier entrants started with product trial. Beyond the above since we are already thinking about differentiating our brand, the case for brand trial is even stronger.
Figure One explains points a, b & c above
3.1 Corporate Finance Online Education – Positioning
We have two key segments that use the product for two different applications. Learning or Reference. There is a lot of cross over between segments (members can belong to both segments at the same time). We had to develop a positioning that took advantage of the fact and at the same time did not confuse our customers. As a result we came up with two separate campaigns for the two segments. Although the messages are distinct, they are also complementary to each other.
3.1.2 Pure Learning (for Learners)
Pure learning is what we want our customers to think when they hear a reference to Corporate Finance Training. “No more school, no more books, no more teacher’s dirty looks” is not appropriate but it expresses what we mean by Pure Learning. It’s learning which is hassle free & flexible. A prospective customer can get the information that he wants, at the pace that he wants without any accompanying noise. Existing products do not allow this level of filtering. It’s the biggest competitive advantage the product has.
In terms of attributes and benefits we want to own flexibility and understandable content for this segment
188.8.131.52 Sample Ads
Nobody needs to know you slept through Finance, except the Guides. But then, they know everything…
Two (what is pure learning)
It’s not tutoring … Tutors get confused
It’s not grad school … We don’t cost a fortune
It’s not text books … You just pay for the beef
What is Pure learning…
Pure learning… whatever you want
Pure learning… share the wisdom
Pure learning… spread the word
Pure learning… set your mind free
Pure learning… No limits
Pure learning… As Pure as it gets
Three ( a better way)
Ten painful weeks to get a grip on Finance
Ten carefree days to forget everything
Pure Learning… The better way
Last word on Finance (for reference seekers)
If it has to do with Finance we know everything about it. Whether it’s a concept, a theory, a number, a theorem, Corporate Finance Training has the answer. However just having the answer is not enough. The information is also easy to access and locate, and even easier to understand.
In terms of attributes and benefits we want to own credibility and flexibility for this segment.
Sample Ads (The last word on Finance campaign)
One (save time)
It takes 2 hours to locate that textbook in your storage boxes
It takes 30 minutes to locate that elusive concept after you find the book
Sometimes the text makes sense, sometimes it’s as bad as Chinese
Sometimes you wonder why you bought it in the first place
Do it with Corporate Finance Training. The helping hand for a smoother search.
Two (last resort)
At 3 am in the morning, no one wants to hear from you. Your Finance professor included…
Three (the last word…)
If its Finance, its us. Corporate Finance Training… the last word on Finance
Corporate Finance Training – The Medium
We are looking for customers who are reasonably comfortable with the internet. We feel that such a customer would be drive more value from our product than someone who has just started using the Net. Because of the initial resource constraints the guide faces, we wouldn’t be able to sustain an extensive customer support effort. Hence the need to filter out prospects who don’t understand the net, don’t understand computers and would not understand our product.
Focusing on the net as the main medium is of great value to us. When we reach a potential prospect on the net, he is already pre qualified. We don’t need to convert him to the web, the cost has already been borne by other firms and advertisers.
Because of our focus on Finance, all of our target segments read financial periodicals and newspapers. After the net, the next most attractive medium for us is strategic print publications
Prime Television was a question mark. Given the customer profile we were looking for, we were not sure if TV would be the right medium to reach them. Secondly because of the invasion of dot.com advertising, we were not sure if we could afford TV ads. We were also worried about getting lost in the surrounding clutter…”Just another dot.com company”
Our analysis with respect to selection of medium is presented below.
|Internet||Ensures pre-qualification and competence of audience|
Depending on the nature of the arrangement, may be more expensive or cheaper than traditional media
Customize the message depending on the profile of the user
Easier to implement alliances and co branding arrangements
|Banner ads (as a rule) don’t work.|
Need to be very creative and innovative to get desired resultPaid advertising may be just as expensive as other mediums
|Direct targeting of potential customers through periodicals read by our target segments|
Professional societies magazines and business school student publications may be cheaper to advertise in than others and would also result in a much higher effective yield
Guaranteed reach and measurable results
|ExpensiveStatic, can be modified for individual customer. However once released, it cannot be pulled back|
|TV||Direct Targeting of large audiencesGuaranteed reach and measurable results||Expensive|
|Out of door||Maybe cheaper than comparable mediaStrategic placement is possible but expensive||Too genericNo way of measuring results|
We finally decided to use a mixture of online and strategic print publications as our medium. TV, out of door and direct marketing were ignored in the short and long run strategy. Primarily because we felt we could get the desired results via the first two mediums.
Table 3.0 below presents the advertising budget for the next two years and its applications
Table 3.0 Budget
|First six months||98,000||Development of co-branding content for alliance partners”Cost less” Placement of content at strategic sitesPlacement of adds in school and professional publicationsSpeaking engagements”Cost less” print coverage in strategic publicationsFrequency|
Print Once a month for six months
|Second||1,000,000||All of the abovePaid placement in strategic print publicationsPaid placement of content at strategic web sitesFrequencyPrint Once a monthInternet Daily|
6.0 Corporate Finance Training – Firm, Product, Market sizing & Competition
Please refer to the attached business plan for information on the above topics.
7.0 Corporate Finance Training – Advertising Strategy – Recommendations
Given the resource constraints high lighted above we divided our strategy into two parts.
A short term strategy applicable for the first year after launch of the firm
A long term strategy applicable for the next two year period.
The time frames were chosen based on the revenue forecasts (read: access to marketing funds) made in the business plan.
7.1 Corporate Finance Training – Short Term Strategy – Phase I
For the short term we maximized the use of the following “free advertising exposure”. This “word of mouth marketing” was the only affordable option and had three components
Speaking engagements of “business founders” at leading Business Schools where they can plug their product in front of a very attentive audience. We felt that this approach would get us the exact exposure we wanted at a fraction of the cost of using traditional media. Columbia (CBS) and Stern (NYU) were two schools that we thought would be relatively easier to reach. Based on our success or failure with the first two schools we would extend this to Wharton (UPENN), Sloan (MIT), Hass (UCLA), LBS (London) & Chicago.
Opportunities for free plugging of the product and firm in print and online media read by our target audience. Examples of this would be magazines in two key segments
Magazines focusing on the Internet economy & entrepreneurs such as Wired, The Industry Standard, Inc, Red Herring, Fast Company, etc
Publications focusing on financial reporting such as Business Week, Economist, Wall Street Journal, The Financial Times, etc.
We realized that this would be a chicken and egg problem. The firm would need to be reasonably successful before the above entities would be interested in providing coverage. To a large extent it would also be a question of how effective the “network” of the management team would be in generating contacts with the above mentioned periodicals.
Maximize alliances with potential content/distribution partners that have a strong incentive in our success or can exploit synergies with the client’s product. In each of the key segments that were identified in the business plan, there are players whose incentives are closely aligned with the client.
Within the business school environment this would be the Graduate Business Association and the Career Services Office. GBA because it would deliver a valuable service to students in trouble. The Career Service office to an extent because the product may be positioned as a recruiting resource on the Net. “We can help you prepare for the toughest questions on Finance”. A potential partner could also be faculty members at business schools teaching courses on entrepreneurship. We are not sure whether this relationship would be conflict / friction free but it may be worth further exploration
Within the Actuarial & Continuing education market, we can offer value added services to professional membership organizations that have limited options available for Professional Development Credit. A product free from geographic and time constraints would be valued by existing members. It would also be a sign that the membership organization is deploying the latest in technological development for the benefit of its members.
Within the small business segment we can work out alliances with the Small Business Associations, Entrepreneural incubators, Venture Development organizations, firms that serve small business (American Express and Visa, Commercial Lenders, etc).
Within the online investment segment most of the big players (Charles Schwab, Merrill Lynch, Etrade, etc) have an existing arrangement in place for training their investors. However the small players (who still have a significant number of clients) Ameritrade, National Discount Brokers, etc have no such offering. Since our product would reduce the differentiation between their services and those of the front line players there be some interest on part of this organizations in distributing our contents via their sites
7.2 Corporate Finance Training – Long Term Strategy – Phase II
Our long term strategy is more traditional in nature. The key objectives were:
To retain and further develop the mind share / heart share captured in Phase One
Shift emphasis from product trial & brand trial to brand building. At the same time increase usage by existing customers
Since resource constraints would now be less of an issue we opted to place advertisements in strategic publications and web sites. Given our initial analysis we decided to ignore television advertising and focus more on print and online media placements.
We feel that the advertising strategy outlined in this paper would be able to meet the objectives set by the client. Using a number of non-traditional methods (alliances with strategic partners) allows us to work within our resource constraints. It also allows us to focus more on key segments and generate a higher effective yield than traditional advertising.
I wrote this paper in late 1999 for my final class project in Advertising Management, an advance marketing elective run by Professor Donald Sexton at Columbia Business School. Like a number of other items posted on this forum, I thought it would be useful to share this as a historical document that led to the current reincarnation of Learning Corporate Finance. The old name of the venture has been replaced with Learning Corporate Finance Portal. In addition the document also serves as a great example of optimizing anchor text linkage to a specific key word.