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Case Study - Providing App Development Solutions to Small Businesses: Part 3
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Case Study – Providing App Development Solutions to Small Businesses: Part 3

It’s been awhile since I posted an update regarding this case study due to the holidays and many other projects I have going on.  If you need a refresher as to what I’ve done so far check out Part 1 to learn about what my goals are for this case study and check out Part 2 to read about what I’ve done to prepare to sell my app to independent pizzeria owners.

To review, this case study has four “phases”:

1) Planning (DONE!)

2) Preparing (DONE!)

3) Selling

4) Developing

As you can probably tell, in this 3rd part of the case study I’m going to be focusing on how my attempts at selling this idea to pizzeria owners has been going.

Finding a Quality Developer

Before I sold my app development services to any pizzeria owners, I wanted to make sure that I was going to be able to provide them with exactly what I was saying I would.  So I posted a job on Elance and got only 11 total proposals which is a lot lower than I typically get.  However I found 2 developers out of those 11 who “passed” my first stage of filtering and who I would normally do a Skype interview with.  Here are the 2 bids:

          Price for 1st Pizzeria          Additional Pizzeria Price          Time

1)                   $438.36                                     $25                          2 weeks

2)                   $383.56                                     $75                          2 weeks

As of right now I am leaning more towards “Bid 1” as he offered to create a “system” for me that would allow me to swap the pizzeria information (without any coding or technical work on my end) so that I wouldn’t need to hire him again for additional pizzerias (unless I wanted to in order to save time, for $25).  However, I haven’t done Skype interviews with either of these developers yet because I want to have a customer in hand before I hire one.

As you can see though, after I get my first customer’s app built whatever I charge additional pizzeria owners after that will be almost pure profit.  That’s really exciting for me as I could even lower the price to $400 (instead of the original $800-900 I was planning on charging) and STILL make a decent amount of money!

Testing the Waters

So now that I have a very specific idea of how much it’s going to cost me to develop this app, I need to actually get my ass in gear and get some customers!

I decided that before I approach local pizzeria owners in person, I wanted to get some practice refining my sales pitch as well as possibly getting at least a customer or two so I could have a “live” app to show them in person on my phone.

So in order to save me time (though I could have manually done this myself) I hired a woman on Elance for $20 to find me the contact information for 100 pizzerias.  The contact information provided includes:

  • Name of Company
  • Owner Name (if included on the website)
  • Email Address
  • Phone Number
  • Website URL

Now you could do this yourself without hiring anyone using sites like Google Maps and References USA (I believe that’s the site she used) however I think it’s $20 well spent to save me the time of going through that process.

Now that I had my list of contacts, I sent this exact email to each of the 100 pizzeria owners:

Subject: App Development for Your Pizzeria

Hello,

My name is Thomas Strock and I’m a mobile app developer from Allentown, PA.  I came across your pizzeria and I have a really great idea to help you connect with your customers as well as find new customers through a mobile app!  Below is a link to a PDF with more information about my idea for you to take a look at.  If you have a few minutes, check it out and let me know what you think!

http://dl.dropbox.com/u/56488680/Pizzeria%20App%20Information.pdf

I’d love to help you out with this project as I’m sure you’ll see the tremendous value of reaching people through a mobile app in today’s business environment.

I look forward to your reply with a date and time most convenient for us to have a quick meeting over the phone to discuss this opportunity in greater detail.

Thanks,

Thomas

**My Phone Number**

I was torn when writing this email as to how long it should be.  On one hand I could keep it really short so that busy business owners are less likely to skip over it or not read it.  However on the other hand, a really short email with a link in it looks a lot like spam.  Plus it would be difficult to get the information I wanted across in just a few sentences.  So finally I decided to compromise and make it a bit lengthier, but to try and keep it as concise as possible at the same time and not include “fluff”.

Another thing to consider is that for half the emails I sent it exactly as written above, with the recipient having to click on a link to view the PDF with more information.  However for the other half of the emails, I uploaded the PDF as an attachment.  People are scared of clicking links AND downloading attachments from people they don’t know in emails, so I’m not sure which one would work better.  To remove any “excuses” if barely anyone replied, I split it 50/50.

Also, because sending mass unsolicited emails selling stuff is technically spam, I set up a brand new, separate GMail account to use specifically for this project.  I hoped that that would protect me at least a bit if people reported the email as spam.

The Results

The foundation of this blog is to be as open and honest as possible and let you in on both my successes as well as my failures.  Unfortunately, the results of this case study so far have been an utter failure.

Of the 100 independent pizzeria owners I contacted, I got only 1 response (a phone call).  Granted, I’m sure if I would ask people to email me back instead of call for pricing I might have gotten a few more responses, however I doubt any of those would’ve turned into sales…people are too afraid to call are probably “just curious” and not serious about buying anyway.  Why waste my time on them?

Anyway, instead of focusing on the 1% response rate and the 99 people who DIDN’T contact me, let’s talk about the 1 person who DID.  But trust me, this story is not getting any less painful…

My STUPID Mistake

A few hours after I sent out my emails, I got a phone call from one of the pizzeria owners that I contacted.  We talked for about a half hour and I answered a bunch of questions he had about the app idea and how it would help his business.

It seemed to be going pretty well, and for the most part I felt like I did a fairly good job of selling the idea to him.  I had to admit to him though that I had no “live” examples of this type of app that I developed on the App Store.  I told him that I was just getting started offering services to small businesses, but he could check out one of my personal apps SharePrayer to see the type of work I do.

Overall though he seemed relatively optimistic about the app and didn’t even give any verbal objections when I told him the $800 price tag.  Instead he went on to ask me how much it would cost to add an Android version (I told him an additional $200).

Sounds like it went pretty well right?  WRONG.  Why?  Because I screwed up…BIG TIME.

The guy I was talking to had a pretty heavy accent and I felt bad when I had to ask him to repeat himself over and over again.  On top of that I think he was under the impression that I knew his pizzeria and I sent him that email exclusively.  So for those two reasons at the end of the phone call I didn’t do the following things:

1) I didn’t try and close the sale and get him to commit today.

2) I didn’t ask for his name (too embarrassed since he said it a few times before and I didn’t hear it clearly).

3) I didn’t ask for the name of his pizzeria (too embarrassed since he apparently thought I already knew it and the email was personally sent to him).

 Yeah I know – I let my embarrassment and social awkwardness over the phone get the best of me.  I did a great job for 29 minutes of that call and then completely ruined it with the last 60 seconds.  It sucks, but lesson learned…only thing to do now is avoid making that same mistake again.

I tried comparing the phone number he called from to the numbers on my list of contacts.  However, it didn’t match up so I assume he called from his home phone or cell phone.  I could narrow it down to around 4 different pizzerias, however it would be hard to call a pizzeria (probably get an employee) ask for the owner, ask if he called me ___ days ago (and if not apologize and explain I have the wrong pizzeria).

Moving Forward

These emails are supposed to be giving me an idea of how good this app idea is and how many business owners will be interested.  So far it’s not looking good.  However, I’ve worked too hard creating mockups, creating a detailed sales packet, filtering developers, etc. to let this setback stop me.

I went back to the same woman before from Elance (by the way…her name is Bambi and she’s awesome) and had her get me the contact information for another 200 pizzeria owners.

I’m planning on tweaking my email a tad, and sending out 50 emails per day for the next 4 days.

In addition if anybody calls me I will MAKE SURE I get their name and the name of their pizzeria.  I will also attempt to close the sale at the end of the call, and may offer them a discount (maybe $600 if they commit and send the money today).

Let’s hope the results are better than last time!

Your Take?

After seeing my results from the first batch of 100 emails, do you still think this is a viable idea?  Any advice as to something I could be doing wrong?  Hit me up in the comments section.  I LOVE constructive criticism, so bring it on!

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Comments

  1. David Janner says:

    Hey Thomas,

    I think you should use the phone conversation as an opportunity to understand the needs and pains of the business. I really agree and like Dane maxwell’s take on develops software, which is the same model used by huge IT companies. Your specific idea isn’t necessarily right for them and won’t necessarily result in an increased roi for them.

    What you should be doing is finding out what their needs as, their pain points, what things they do that just waste their time and money on a day to day basis and want software they use now that they’re not happy with. If there is a problem to be solved, a real one, they will give it to you. Then there won’t be a need for you to “close” a sale because they will close themselves….

    • Hey David, thanks for the comment! You’re one step ahead of me 😉 Love Dane Maxwell’s software development model and I’m currently experimenting with it in another niche. My plan is once this case study is done (regardless of whether it’s a financial success or not) I plan on doing a follow-up case study using Dane’s methods and see how the results compare!

  2. Hey Thomas, I just stumbled upon your site and I’m glad I did. I found this post funnily honest and I can totally relate to your phone call mishaps. I hate selling over the phone because I’m totally awkward and have definitely experienced by end of heavy accents lol. Anyways, good luck with the case study… I’m looking forward to seeing how it goes.

    • Hey Sean, thanks for the comment! Talking on the phone without being socially awkward is definitely not my strong point, but something I really want to work on improving as there really isn’t any way to get out of it.

  3. First of all, go easy on yourself. Vast majority of people is uncomfortable with asking people to repeat things on the phone. At my job senior year in college I spent literally most of the time on the phone following up with people to make sure they received the orders we sent in. Then calling other places to make sure things were delivered and in-position. With each call, we had to make a notation what time we called and who we spoke with. So asking for the names was essential. Uncomfortable for a while – yes. But after doing it day in and day out, it was no longer an issue. Here’s a couple of strategies I use to this day:

    – Whenever someone introduces themselves (whether they call you, you call them, doesn’t matter), repeat their name! It already helps your brain remember it.
    “This is Ashley, how can I help you?”
    “Hi Ashley, I am calling blah blah blah”

    – If you still forget their name, at the end of the call, be apologetic and ask for it again. If you make it sound apologetic (as in, I know I screwed up, help me out here), people will not think a second to help you. Especially with something simple. Some of my favorites:

    “Thank you very much for [your help today, call back, whatever]. And I am very sorry, but could I get your name again?”
    “… And I am so sorry but I didn’t catch your name..”

    You can even add something like “I’m really not good with names” after that, depending on the pace of the conversation.

    Same goes for figuring out how to spell things (whether due to a bad connection or the accent):
    “I am so sorry, but I didn’t get all of that, could you spell it out for me?”
    “Thanks John, it is ‘John’ with an ‘h’ or without it?”

    Now with that out of the way, your one call back out of 100 is not that bad actually for a completely cold sale. I have been hanging out with lots of bloggers lately and with those trying to promote some of their products to their audience, anywhere from 0.5%-4% conversion rate is considered terrific. Have you gotten any other follow ups since? You have to consider that a lot of older folks running traditional businesses that don’t rely on being online 24×7 may only check their email once a week, if ever. Not to mention that email addresses change and few people update that information, especially for businesses such as pizza shop where nobody expects to be emailed as part of their business operations.

    My suggestion is to actually go to pizza places nearby in person. Ask to speak to the owner or the manager and have the elevator pitch ready so you can floor them when they think you are just another kid that wants to be a delivery driver. Just by being different from the other 16 year olds that show up asking for a job, you should already spark enough interest for them to at least listen to you.

    It is also a lot harder to outright refuse someone in-person. That’s why whenever I need something, if I can, I go to talk to people in-person. Try calling a gym to ask if you can bring your out-of-town buddy over to work out with you. Likely they will just tell you that you can’t or that it will cost $5-$15. On the other hand, whenever I just show up with someone, in 9 out of 10 cases, I get in for free (or my friend if it is my gym). Oh, and if the manager at the pizza place tells you they don’t need that/we aren’t using computers/etc, thank him for your time and insist on speaking to the owner (even if you have to come back later).

    And if the owner is not there, do try to get it out of them when the owner will return. Everyone will tell you to leave your name and phone number and they’ll pass it on. But at that point, it becomes impersonal again – the owner comes and and someone hands him a piece of paper saying some kid came in wanting to sell you some iphone app. I guarantee you they will just throw it in the trash. Find out when the owner is usually there and come back that time.

    Yes, this is all extra time spent that you cannot outsource. But such is business. Stick with your original plan of charging $800 for the app. That’s not a lot of money (just think of how much all that equipment alone has costed them… plus tables, lease, etc). You can even soften it up more, offering something along the lines of $400 on delivery and another $400 after they get X amount of orders through the app (if you are really that confident that the app is a good idea).

    • Wow Dima, thanks for the awesome comment! Those are great tips about how to make it less awkward asking for people’s names again. Improving my conversational skills over the phone is another benefit to doing this case study I guess 😉

      As for conversion rates, I was hoping for a bit more than a 1% response rate but if I was able to make a sale from that one owner I would’ve been happy trading the $20 it cost me to get the list of contacts for the $400 profit it would have made me. I agree that the best way to sell it would be going directly to the business owner in person. The point of emailing all these owners before I do that was so I can practice my sales pitch, be prepared for any questions/objections that might come up, etc. If the emailing keeps going this terribly though I may just end up going in person and “winging it”. It’s not like I have anything to lose by trying!

      Thanks again for the advice and support!

  4. Thomas,

    My girlfriend is 100% Vietnamese and her accent gets her involved in the same situations and she has a hard time accepting when people can’t understand her.

    So with that being said, I understand where you are coming from. I wouldn’t call it a mistake, maybe try and keep those contacts via email instead.

    Good luck to you sir!

    -Vince

    • Thanks for the comment Vince! Yeah, accents can be tough especially over the phone. The reason I’m choosing to talk to people via the phone vs email is that with email people can “disappear” after a few emails back and forth. However when you’re on the phone you have them “trapped” and they at least have to give you an answer. Plus, I think I would be able to sell to them better (once I get over my awkwardness) over the phone rather than email. I might try Craigslist ads and having people email me from there just to see what happens though…

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