At Franklin International Institute Inc., it's called the "breeder effect." Others call it "seeding" their markets. In both cases it's the same idea. First, you identify key people whose actions or opinions will influence the bulk of your potential buyers. Get the product into their hands, and if they like it, the rest of the market will follow.
But even giving a product away takes some planning, especially when potential recipients don't know they want it. A small ($6-million) division of Lotus Development Corp., based in Cambridge, Mass., has started seeding the market for one of its products, Agenda. Agenda is a PC-based software program intended to help executives and middle managers manage their time better. As with electronic mail, says Paul Paget, Agenda's marketing director, "once your boss starts using Agenda, you almost have to."
So Paget identifies, city by city, the chief executives of smaller companies and the unit heads of larger corporations, and invites them to seminars. He'll use, for instance, the subscriber list of a business or trade magazine or newspaper to help him locate his targets. When appropriate, he gets the periodical to cosponsor an Agenda seminar to which he invites those key people. There, he shows the entrepreneurs and executives how the program works and, when the class is over, hands them a bag with the Lotus logo on it and a free copy of the $395 software and manual inside. If the seminar has worked, the bosses will get hooked on Agenda, and once they get back to their offices they'll be the best sales force Lotus could have.
Another company, Salt Lake City-based Franklin International Institute, has built itself from scratch to more than $52 million in annual sales in just six years by using a similar marketing strategy. The product, coincidentally, is a paper-based time-management system. When Franklin is conducting a time-management seminar at one corporation's work site, it will invite -- gratis -- one or two executives from other corporations. If they're impressed, Franklin's experience shows, they'll bring Franklin's training and time-management products into their own companies.
Both Franklin and Lotus count the products they give away as just another marketing cost. In Franklin's case, since it's proven that a single freebie given to a corporate manager can lead to the sale of hundreds of seminar slots in that executive's company, the cost of seeding the market is almost trivial. At Lotus, Paget calculates he'll more than break even if he can sell just one copy of Agenda for each one he gives away.
Follow-up to the seminar is essential to the selling process. Paget plans to call seminar attendees, periodically mail them a newsletter, and maybe run a sweepstakes for people who refer new buyers to Lotus. "We'll make it fun," he says.
-- Tom Richman