Great New Gadget in Search of a Marketing Plan

Sometimes it takes more than a good product to be successful. Twitter is outstandingly popular, but the powers that be have yet to develop a viable revenue stream, which is the core to any successful business plan. (You can follow me on Twitter @LyndaResnick.)

In today’s Ask Lynda, a budding entrepreneur gets some advice on different angles for selling his gadget in the niche museum market.

Hello, Lynda,

I heard on NPR today that you are answering marketing questions, and if it’s not too much trouble, I was hoping you could help me with some of mine. I really appreciate your help. I’m 23 years old from Los Angeles, starting a business with a friend. We’re developing an iPhone-based museum tour, and we’ve demoed it to several L.A. art museums who have all shown strong interest in adopting it.

It works like this: A visitor goes to the museum, picks up a free loaner iPhone at the museum, and uses the museum-specific guided tour on the iPhone. It’s like the old audio headset tour, but revamped for the current decade. Now, the museums love the idea of having something like this available to their visitors, and they even more like the fact that we’re providing it to them for free. This includes the application, the loaner iPhones, and even the labor required to set up the application with content from their databases and so forth. Our current plan to monetize this is through corporate sponsorship. A sponsor gets their name and logo in the museum’s iPhone tour application, and a dedicated section where they can put whatever advertising they want (a digital print ad, an interactive promotional item, whatever) at a minimum. The museums will hopefully also allow a sponsor’s logo on signage where the iPhones are distributed, in brochures, and so on. (We realize that some museums are against the idea of corporate meddling; those museums are considering buying the application outright, and aren’t the topic of my questions here.)

Here’s our first problem: When it came time for one major L.A. museum to sign on the dotted line, they seemed to feel that we would be competing for the “same, limited sponsorship dollars” and thus needed to reconsider. This is a valid point, but as we are a for-profit organization after all, we would be searching for sponsors regardless of their commitment. Nevertheless, it would be great to have this particular museum on board by alleviating their fears. (We’ve already offered to go after smaller, local sponsors, and to check with them before approaching a company to make sure it’s not on the museum’s list of possible candidates.) How would you suggest we go about this?

My second question is about sponsorship pricing. In order to make a small profit, we’re looking for: 1 “main” sponsor per museum (at $3,200/month), and 3-5 “economy” sponsorships per museum (at $400-$500/month). The difference between the two is that the “main” sponsor gets a much bigger logo wherever logos are shown, and gets the dedicated section of the application for advertising. It is our understanding that — given the prestige of these museums, the allure of the iPhone as a new and cool technology, the low cost per impressions as compared to the L.A. Times and most magazines, and even other corporate sponsorships — sponsorship of this in-museum iPhone application as an alternative means of advertising should be a no-brainer for marketers. So, my second question to you is: Are these reasonable assumptions, and is there a good way to leverage this in the current economy?

Lastly, we’re constantly pitching potential sponsors but are unsure about whom to pitch. We’re of course trying for the current high performers: pharmaceuticals, education, fast food, and discount retailers. Are there any companies or categories you might recommend who would pounce at the opportunity to tie this in with their business? Should we be pitching large national/international companies, or smaller local companies? Thank you so much for your help. I realize I’ve asked a lot here, so anything you could answer would be appreciated.

Warm regards,
Max

Good for you, Max.

It happens that I know a fair amount about museum marketing since I am the Vice Chairman of the board of LACMA. I have been helping them with their marketing for years. However, although I have an iPhone for incoming emails and Internet access, I don’t really understand how your idea actually works. But I will take a leap of faith and assume it is far less cumbersome that the headsets of yore. If the iPhone also shows an image of the piece of art you are meant to be looking at, that would also help, just so visitors can identify where they should be at any particular moment in a set tour. Or better yet, they should be able to see all the works in a room and then choose the one the want to hear about. Sounds amazing.

Now, about the marketing; the museum is right. You would be competing for the same sponsors as they would. I suggest you come up with a model where, in the case of a traveling exhibition, the iPhones are packaged with the sponsorship opportunities already secured by the museum and work hand in hand with them. In other words, rent your concept to the museum directly and let them in their outreach find their own sponsors. This is a great extra perk for the sponsor, for beyond having their name on the banners and in advertising, their custom message is also in the hands of every potential visitor. The shows that offer headsets have thousands to tens of thousands of visitors.  Many smaller museums may welcome your bringing new, small-scale sponsors into their galleries, but the big players want to do that themselves.

Hey, Max, order my book and learn more about marketing. I salute you and your efforts.

All the best,