Aging 2.0's stake is 5-7% in startups with an early product and key team members in place
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The Internet Doesn’t Change Everything: Channels Do
This website posts press releases – they tell a partnership story. Press releases are pervasive – and I read them either because they’re sent to me (good idea) or they show up in my Google Alerts. Posted under ‘Vendor Press Releases’ on the site, they are tagged with terms that match the content so that web and site searches will find them. This site has been operational for over 2 years, so there are plenty – and a chance to think about staying power and persistence of the vendors who have come – and gone – along the way. Looking back to 2009, partnership announcements prevail – agreements to promote a vendor’s product, to make it available for constituents, and to resell. Many of these agreements are just that, handshakes with press releases – and don’t necessarily result in more products sold through to end customers. But of course they create visibility and credibility via the partnered organization for a vendor that may be small and new.
For new products – the web/retail is not enough. So a new vendor emerges, creates a website, readies the product for launch, trains responders for 800# callers, hires a PR firm, puts out a press release, sets up a Twitter account – and then wonders, now what? Let’s assume for the moment that the product hardware or software is adequately tested and works for prospective users as stated, while good search engine optimization is useful, but most products in this industry do not sell themselves from a website. A long list of vendors telling me this, to their dismay, has led to this conclusion. And new products, especially in new categories, don’t hop off retailer shelves either – there is no evidence that retailers train sales reps enough to enable them to explain product benefit. And sizable upfront VC or angel investment, splashy launches at trade shows, slick product designs, prior consumer direct experience, or previous tech industry reputation have not guaranteed success for tech intended ultimately for use by seniors or caregivers.
What does keep vendors in the market and surviving – even in a downturn? For products that must be explained, understood, supported, installed, and explained again, vendors need channels with tentacles that reach all the way into hands of the end user, caregiver, or adult children. These channels can be referring, requiring little or no investment other than suggesting the product – like geriatric care managers, social services, or doctors. They are local by definition, reached by calling on them or demonstrating at trade events. Once a vendor has established a track record of installed and satisfied customers, partnerships are possible, like relationship agreements with big senior housing, healthcare providers or large carriers – like Verizon or AT&T. These partnership agreements amplify and enhance: even if the relationship results in few deployed or sold-through units, each builds on the ability to gain the next and the next, ultimately with a partner that commits to utilizing the products. They can include dealer/reseller channels, that is, small businesses who understand the senior cohort (versus the home theater customer) and can go the distance of the last 50 feet into the older adult’s home to survey the environment, install and support.
Product awareness and demonstrable needs limit channel dependency. When product benefits are perceived by the prospective buyer – maybe it’s a cell phone, an eReader, a computer or tablet, or a device to enhance hearing or vision – the customer will buy from retailers, through the Internet, or on the phone using discount coupons or whatever they can find that offers a good deal. Of course, the media costs associated with differentiating among crowded tablet, phone, or eReader markets are not for the faint of heart – they make investment in cultivating a channel of trained folks who span the last 50 feet of relationship look like a bargain. Finally, to the degree that prices go down, installation simplifies to a charge-plug-and-go stage, then cultivated channels and their associated margin and support costs become less useful.