Talking to Markets: David Freeman at Geodesic Systems


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published April 4, 2002

When company names appear in my column, I have noticed a trend of corporate officers contacting me to ask how I learned about their existence or got my information. Much to their dismay, I often reply that I did research to find them searching VC portfolios, i-Street lists, and of course, old May Reports. (So far TMR has proven the most complete. Thank you, Ron.) While, as a marketer and intermittent columnist, research is part of my basic skill set, customers are unlikely to go to these links to find vendors. More so, customers will never search through VC portfolios to find solutions to their business problems.

Awareness is the first problem to overcome in any sales and marketing cycle. People cannot purchase from a firm if they don’t know the firm exists. Countering this problem marketers often take the most proactive stance that they can. Advertising, events, and direct contact. In the late 90’s a new term came to business as the flavor of the decade: “viral marketing.” Usually, when I hear of a firm using viral marketing and its cousin, word-of-mouth, I don’t walk, but run. However, when I contacted David Freeman, VP of Marketing at Geodesic Systems, and he explained the success he has had with this form of marketing, I thought it would be useful to devote a column about it.

For Geodesic, their word-of-mouth leads have usually come from the technology community. Geodesic is a Chicago firm that produces a few products for the IT shops of large corporations. One of Geodesic’s products helps system administrators keep systems up and running more efficiently with higher reliability. Another, older tool helps programmers write better programs. Technologists seek out Geodesic’s tools to help them do their job better.

In the recent past, Geodesic has had the bulk of their revenue come from word-of-mouth. For Geodesic, word-of-mouth marketing includes people talking to each other at meetings about their use of Geodesic tools and PR stories. Geodesic even speaks of “the SlashDot” phenomenon. When an article appeared in SlashDot about Geodesic, they received over 100 contacts and 40 of them were qualified to move into the sales cycle.

However, the technologist end users of system administrators usually do not have budgetary authority to purchase Geodesic’s products. To close the opportunity, Geodesic has had to escalate the interest to the business level and bring out the direct sales force. For Mr. Freeman, this meant creating a business process apparatus to collect contact information, qualify a lead according to a number of business criteria, and then move that quality lead into the hands of a direct sales force to close the opportunity at the business level.

Notice the cycle: End users express an interest and then business people make the purchase. This is similar to the ACT or GoldMine sales cycle where the end-user software is sold at a price that a single person could afford, then a value-added reseller (VAR) contacts the person to see if they can’t sell the firm more advanced versions of the product: SalesLogix or GoldSyc. The opposite cycle is to start with the business end and move down the chain. Viral marketing for Geodesic, Interact, and FrontRange starts at the bottom and moves up. Regardless of the route, recall the basic Miller Heiman paradigm of selling to businesses expensive goods that allows all customer roles to play: The Coach, End User, Technical Buyer, and Economic Buyer. Geodesic concentrates on the end user, in this case a technologist, and moves to economic buyer. Some of us will have to involve more of these roles in our cycle.

Is word-of-mouth good enough for Geodesic going forward? Well, Mr. Freeman’s future plans are a bit different. He has a new product to be released in the next two quarters and has been working to create an associated marketing plan. As he prepares, he has been including old fashioned marketing vehicles to move his message out. This includes direct mail, email, newsletters, advertising, and banner ads. While all of these marketing communications tools are useful including viral marketing, the next set in Mr. Freeman’s portfolio are clearly more active than hoping that a good story will appear in SlashDot.

Also, Mr. Freeman has had to raise the bar on Geodesic’s message to the market. Out is the “techno message” and in is the “business message.” Instead of focusing of features and functions, their business message focuses on an insurance sale: With Geodesic tools, firms can keep their systems up and running avoiding costly problems such as crashing web sites that loose customers and deflates investor confidence. When a retail site goes down, all revenue ceases. Lost revenue is hard to find. Geodesic helps firms prevent costly losses. They support this fuzzy ROI message with third party research by the Standish Group and real client references from Amazon. This makes for a good marketing of a clear value offering.

But ROI and avoided lost revenue doesn’t always resonate with a programmer. It is business speak. Does viral marketing work on the business speak level? I would be uncomfortable resting my laurels on it and I think Mr. Freeman is too.

The May Report, TECH BUSINESS BRIEFS, April 4, 2002

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About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.