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Building Better Beta Sites
by Lucy Marcus


Choosing the right beta sites and administering them with care are key to a company's growth. How the beta process is managed can define the success with which your product or service will enter the marketplace.

Beta sites are companies or individuals that test a product or service before it reaches the market with an aim to improve the quality, focus or features. The beta phase is a time to test out the strength not only of your product/service, but the strength of your company as well. This pre-launch period may be the first time all departments in the company, including sales, marketing, engineering, finance and human resources, will be tested on their ability to work in concert.

Planning
Before choosing your beta sites, understand how your strategic goals are spread over the three stages of beta-testing: beta site selection, the test run and follow-up. Determine whether a singular, phased or serial beta approach is optimal. If you plan to have high-profile beta sites that will be key references later on, your company may decide to do a "beta for your betas." This serial approach gives you the opportunity to work out some of the initial problems before taking it to your most valued beta sites. The phased rollout entails increasing the number of sites over time and helps alleviate the danger of overloading your implementation and support teams.

Strategic goals to achieve with your betas
Betas play multiple roles in the process of developing, positioning and introducing a product to market. They are vital to your engineering efforts, but to your marketing and sales efforts in almost equal measure. Beta releases also help determine the scale of your customer-support infrastructure. As part of your launch, betas must be compatible with your long- and short-term strategy.

Because the outcome of the beta test can be so crucial to your company, choose beta users with particular care. They should reflect the vertical markets or market segments your company plans to target and, for business-related products, the executives with the authority to buy your product/service. With the opportunity to use the product/service from inception and to influence development, beta testers will end up tailoring it to their own needs, both as individuals and as organizations - thus those needs should match those of your target customers.

It is a mistake to view beta testers merely as a means to determine the potential of your product/service. Beta users are a mix of investor and customer, with the ability to spread your product/service across their own companies, as well as within their vertical markets. As such, retaining these pre-launch partners should be an integral part of your marketing and sales strategy. These early adopters are taking a chance and will invest time and money to use your product/service. Planning and consideration go a long way in creating strong advocates of help to your company on the way to a successful launch.

Selecting the beta site
Having identified your market, competitors and potential customers, it is time to think ahead and survey potential beta sites during early product marketing efforts. Don't lose sight of what achievements you expect to come out of the beta phase; getting feedback on your product/service is not the sole aim - your company is also preparing to send its message to the marketplace. Manage the process well and beta sites can deliver credible reference customers that will grow awareness about your company and demand for what you are selling.

Establish relationships early with potential candidates that fulfill target criteria. Get practical input from them before you draw up a shortlist of potential beta sites.

Make sure your beta sites understand the basic requirements necessary for effectively testing your product/service. Ascertain that the hardware equipment of each site is compatible with your product/service, and its work force capable of satisfying your demands.

To zero in on the right sites, use your network of contacts in the industry. Do not hesitate to ask your investors for help - not only do they have an interest in your success, but the backing of highly regarded investors can greatly boost your efforts as you approach potential beta sites.

Signing up the beta site
Four components comprise a successful engagement with a test site: a strong initial contract, high-quality user surveys, careful project monitoring and integration of the feedback gathered during the test.

The contract your company signs with your beta sites should reflect the mutually beneficial nature of the engagement. Include incentives for the beta sites alongside clauses that allow your company to achieve its strategic goals. A well-planned agreement will include the following:
  • Fees Engaging a paying beta site is optimal; references are much stronger when beta users are willing to pay for your product/service even at this early stage. However, your company is expecting a lot from the beta user. It is therefore important to significantly discount payment, by offering your product/service at a lower price for the first year or by phasing in payment over time. Your beta testers can be seen as co-developers; the mutually beneficial relationships you build with them can carry you through the inevitable difficulties.
  • Public relations/reference clause Too often, vendors think they have received an implicit agreement that beta users will speak on their behalf to journalists and analysts once the pre-launch is complete. As a result, the vendor doesn't bother to make this explicit agreement in the contract. One word of advice: Get it in writing. A line in the contract stating the user's willingness to be included in public relations efforts, including case studies, press releases and other collateral, saves a lot of heartache in the end. A separate stipulation of the user's willingness to serve as a reference for investors and other potential users is recommended.
  • Surveys Specify in the contract how your company will monitor the beta's progress, and what is expected from the user regarding your access and their help in gathering feedback. Developing a series of survey questionnaires is an excellent way to collect information at various stages of the beta testing. Send them prior to installation to ensure technological compatibility, during the rollout and at various times during the actual test phase. In the survey design process, get input from all parts of your company - engineering, marketing, sales, finance and human resources. Use multiple choice designs, allow plenty of space for feedback and make yourself available to beta users to discuss aspects of the questionnaire.
Integrating beta site feedback
Capturing feedback and reactions (good, bad or indifferent) will help form the future direction of your product/service, and the message your company sends to the marketplace. Your organization needs to develop a mechanism to accept and integrate all the feedback, with enough flexibility to make changes quickly and effectively. Integrating feedback from beta sites is a two-way street. You will need to respond to criticisms and suggestions either by changing your product/service or by educating your customer during the beta process.

From a customer relations perspective, the relationships developed during the beta phase will set the standard for what potential customers will expect from your company and its support infrastructure. It allows your company to plan and budget for developing a strong in-house and/or partner support network. If your product is new and unusual (and hopefully it is), how you present it to your beta sites will greatly impact their perception of your company as a whole. Your sincerity and commitment to the beta sites not only are key to building future relationships with potential users, but will crucially influence the quality of their feedback.

Undoubtedly, your company will want to use some or all of your beta sites as references in the follow-up process. Finding ways to do this, while at the same time not overburdening beta users, isn't always easy. Always start by providing those asking for references with a document that has been created and signed by the beta user. Then, if they still require a direct reference, spread requests among testers (practice "load balancing") to avoid overburdening them.

The production of case studies is an important element of follow-up. Work with writers well briefed in both the technology and the client as you prepare case studies with your betas. Design case studies with several constituencies in mind to optimize their range of use and effectiveness. For example, target the case study to an entire vertical market, as well as to a certain level manager in a variety of organizations.

In case studies, the experience of the user is key, but for press releases, make sure to address the need for stature among press and analysts. Quote the most senior person possible at a beta site in your press releases.

Beyond the beta test
Choose and manage your company's beta sites well, and they are likely to be among your first partners and customers. Focus on retaining those beta sites most able to positively impact sales of your product/service, by selecting leaders in your target market with a long-term need for your product/service, whose use will increase demand among other companies.

Customers understand when a beta has bugs - flaws are to be expected, although tolerance drops in mission-critical systems. Whether or not users experience problems with the product is less significant than the way in which your company responds to their reports. Prompt attention and open communication go a long way in quelling the concerns of your beta sites. The impact of one extremely helpful technical support person can turn out to be the critical piece of an entire relationship with a beta customer. By the same token, if a beta partner doesn't receive qualified help when it's needed, an excellent possibility can be ruined. While this article focused primarily on harnessing beta sites for sales and marketing efforts, beta planning is an invaluable tool in improving your company's internal processes. Beta tests act as a reality check to determine if departments are scaling to the right size and speed. Account management and customer service, sales, finance, engineering and operational infrastructure will be tested during the process. Thoroughly address any red flags that emerge. Start with a clear, overarching strategic plan, add tactical plans for each department linked to each phase and you've got not only the ingredients, but also the recipe for a successful beta site launch.

Vigil Technology Beta Tests e-Sense
Vigil Technology is planning to launch e-Sense, the first complete online solution for automatic gathering of business intelligence from the Internet, in the fourth quarter of this year. Founded in Israel, the company has established its headquarters in the Boston, Massachusetts area.

With a tight timeline, that means fast and focused attention on the beta process, which began in the middle of August, and a lot of time on the road. Vigil CEO Gidi Cohen notes, "In order to successfully roll out the beta, gather feedback, and integrate it into our product marketing efforts, we needed to have a detailed plan that was specific enough to know what steps needed to be taken when, but flexible enough to allow for unforeseen changes, such as people leaving the beta site organization."

Goals of the beta
Vigil had a clear idea in mind of its market sector and specific launch goals for e-Sense. The company chose a mix of beta sites that reflected its user profiles, enabling Vigil to gather accurate data about a typical user's interaction with e-Sense.

Vigil also chose an ASP model of distribution for e-Sense. A client server solution, e-Sense's thin client sits on the user's computer, while the backend of the application is hosted and managed by Vigil. Because the model is fairly new, Vigil wanted to test all aspects of the organization's ability to operate within this model, from engineering and hosting to customer support and product marketing.

During the search and selection period, as well as during the test phase itself, Vigil was able to validate its positioning, pricing and method of delivery. Cohen explains how: "Talking to the potential beta sites was like having a moving focus group. Although we had done a lot research in the marketplace, showing the actual product in action prompted a lot of valuable feedback, such as how our users currently try to solve the problem of achieving comprehensive and continuous coverage of their business landscape, how they would use e-Sense to help achieve this, and how it would impact their working habits." Cohen continues, "We were able to integrate their suggestions immediately through our product marketing cycle, ensuring that their feedback was a part of our engineering as well as marketing communications and sales efforts for our launch next quarter."

Lucy P. Marcus is managing director of Marcus Venture Consulting , a consulting firm that works with pre-IPO technology companies.

Copyright Lucy P. Marcus. All Rights Reserved.

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