Pondering Promotion

After reading "Creating a Marketing Plan: An Overview," I feel good about something for our proposed business plan and, shall I say, in the need of further thought upon some things. I have actually been thinking about this for a little while, but this reading really codified it for me. But I'll get to that in a moment...

The 4 P's - Price, Product, Place, and Promotion. I feel good about the first 3. I think in terms of price we have a good position. By capturing a spread on a payout, we are essentially capturing money from the government that it is willing to pay because we will be saving it money. This leads into our product, which is essentially risk shifting. Hopefully, in properly allocating this risk, the government will save money, investors will make money, and social goals will be achieved. This hearkens back to an earlier concept in class - that of offering a service that leads to efficiency gains. In essence, we will hopefully grow the pie and create value. That is the plan at least.

I haven't mentioned the last P yet, and that is because it is the one that troubles me. Professor Zak asked me a question during my pitch, which I had thought of a little bit. This question was who am I going to market to, or, more to the point, how am I going to get government attention/buy-in/acceptance? It seems to me that I would need to have some policy makers support programs that buy into the social impact bond model.

Normally, when selling a product to the government, there are a number of procurement channels one can utilize. However, I feel those are not feasible or practical for financial instruments. In issuing municipal bonds, a government contracts with an underwriter to perform a service. This is a well established process however, and needs no influence from elected officials except for the desire to issue debt and in what form. Social impact bonds are new though. Therefore a push to promote this form of financial instrument most likely needs to come from the legislators/elected officials themselves. So, the need to promote directly to the people is crucial. Once there is momentum, hopefully established relationships and reputation will carry us forward, but how to take that first step?

I believe a kind of lobbying will need to take place. This means outreach to staffers and the like. This leads me to the other thing that I need to do - convey our service in such a manner it is understandable to a non financial professional. I have been working on this and feel I have made some progress. Luckily for us, the contact information for such officials is readily available. I think Some market research is in order gauge interest. Why not ask the people themselves if they would be interested and how best to approach such a situation. Sounds like some good old customer surveys are in order - but perhaps with a little bit of a twist.