3. 3
Company Background
Chalk.com is an education SaaS company that offers a suite of productivity apps
for K-12 teachers, aims at bringing personalized learning into teachers’ workflow and
providing all the tools they need in one integrated platform. Founded by William Zhou in
2012, Chalk.com currently operates mainly in North America and has been used by over
150000 teachers and 20000 schools worldwide, with headquarter in Kitchener, Ontario,
Canada.
Chalk has about 20 full-time employees and 3 full-time sales persons. One of
them is responsible for B2B clients. Chalk has strong customer support service, its
customer service team can help clients to install the software and provide tutorials in
person or by remote and help clients to walk through the learning curve.
Chalk.com Dashboard is an integrated platform that enables teachers to see all
aspects of their classroom in one place and help them make daily schedules more
effectively. It also allows administrators to see analytics and reports of their school, and
then connect teachers through a single interface. Currently, Dashboard consists of three
components. Planboard provides teachers with a user-friendly way to plan lessons and
edit with curriculum standards and attachments. Markboard uses different assessment
4. 4
styles to score assignments and test with built-in curriculum standards to track learning
progress. Attendboard is still being developed and will be used to record class attendance.
By combining these apps all together, Chalk.com becomes a powerful predictive
analytics engine that helps to drive student success.
Chalk has both B2B and B2C sales channels, which are targeting individual
teachers and schools’ administrative departments. In terms of pricing strategy, Chalk.com
has both a free version and paid version to offer, consisting of basic fee plus premium.
Free version is open to individual teachers for trial, and paid version is sold to
districts/schools for $500 to $2000 annually per license. 80% of their market is now
focused on the US east coast, mainly in Florida, and the largest revenue source is charter
and public schools, but most of their current clients are private schools that contribute
small deals.
Their major competitors include BYOC (build your own curriculum),
KnowledgeHook (focus on Ontario area), Rubicon. However, Chalk.com’s competitive
advantage resides in its integrated solution.
Chalk.com largely depends on inbound marketing via multiple channels to
generate leads due to the limited budget, such as to create content on blogs, Facebook,
LinkedIn, and Twitter. It uses Google Analytics to measure advertising ROI. The biggest
challenges they are facing now include how to convert market leads to sales leads, how to
get politicians on board, how to strengthen its uniqueness to differentiate itself from other
competitors as well as how to fit into district needs and implementation.
5. 5
Current Marketing Strategy
Geographic Market
Since the education system in the U.S is more standardized, Chalk.com’s current
major market is the U.S market. Based on the fact that the education system differs from
state to state, Chalk.com plans to conquer the U.S market states by state with a priority of
targeting the east coast. The very possible next state that has a huge potential is Florida.
Customer
There are 2 groups of customer, which are teachers and districts/schools. The
huge number of over 140000 teachers is mainly the free users of Chalk.com’s free
curriculum development software and they are not willing to pay ever since Chalk.com
tried to charge them in the very beginning, but received very negative results. The second
group of 30 districts/schools is the major profit generator for Chalk.com. Although
having a large customer pool, up-selling from teachers to districts/schools seems to be
6. 6
impossible for Chalk.com. How to convert the huge teacher customer base to sales is a
big question for Chalk.com.
Marketing Strategy
Chalk.com uses Inbound/content marketing on LinkedIn and Facebook, search
optimization on Google, world-of mouth, and trade shows. Due to the tight budget and
the difficulty of delivering the product in one picture, Chalk.com did not choose any
print-ads or billboards to advertise. In order to take both teachers and schools into
consideration, Chalk.com found it is hard to satisfy both customer groups. To be more
profit-driven, Chalk.com is shifting its main focus of content marketing to be the paying
customer group, which is composed of districts and schools.
Pricing Strategy
The current pricing strategy is charging from $500 to $2000 annual flat rate plus
an annual fee of $100 per teacher. This pricing strategy makes Chalk.com’ service be
much cheaper than any competitors’ for customers like small private schools. Hence,
Chalk.com just made several successful deals with small private schools and is still
digging deeper into this market.
7. 7
Alternative Evaluation
Decision Criteria
Given the nature of the education industry, Chalk’s pricing model, and market
competition, the four critical decision criteria below have been identified in order to
evaluate Chalk’s immediate expansion opportunities. Each criterion has been assigned a
weight of importance between 1 and 5, where 5 is the highest value.
Criteria Explanation Weight
Cost of
Implementation
As a young startup Chalk does not have significant access
to funding. Thus the solution must be as cost effective as
possible while maximizing the ability to achieve the
following criteria below
5
Growth
Potential
One of the most important things Chalk must do as a young
company is establish a large market presence. Early access
to the market can help prevent competitors and allow for
future revenue opportunities
5
Revenue
Potential
While revenue potential is significant, Chalk must first
establish a market presence and customers. Adjustment of
business models can be done following the market growth
4
Time to
Implement
Chalk must be able to act quickly in order to grow their
business due to the uncertainty of additional seed rounds, as
well as the potential threat of market entry. This must
however come at a later priority from growth and revenue
potential
3
8. 8
Alternatives
The following alternatives are based on the aforementioned criteria and analysis
and it is in Chalk’s best interest to consider the following three alternatives.
1. Grow Direct Sales Force Presence
In order to reach a larger number of decision makers in school boards of districts,
Chalk can grow their direct sales force. Their currently limited sales force is unable to
attend all of the events and conventions that these decision makers find important. They
are also untrained in sales methodologies, and may not be fully optimizing their sales
process. An addition of two to five junior members, and a mid-level sales member can
substantially allow them to grow their presence. The largest concerns here are the
expenses of hiring and staffing new employees, and the slow time to implement a full
sales funnel. The largest benefits are the ability to substantially grow product reach
without changing the product and the potential to earn substantial revenue with new
customers.
2. Expand Geographically
Limited geographical segmentation and reach creates a barrier for Chalks
expansion. As such, Chalk may be able to expand into greater geographic regions while
9. 9
maintaining the same target market, service offering and pricing plan. The same
marketing activities including LinkedIn and Facebook advertising can be used to reach
decision makers in European markets. This would be able to effectively increase growth
as there are many districts that are currently underutilizing technology in their curriculum
planning in Europe. This would also greatly increase revenue potential. The biggest
concerns however are the time to implement this solution given language barriers,
cultural and process differences, and the cost of implementation as maintaining business
in a different continent would add quite a bit of work to sell, support, and target new
customers.
3. Offer Freemium Service
Chalk has noted they are having difficulty entering districts due to the nature of
their tiered service which many decision makers will not purchase due to a lack of
knowledge of the benefits. As such, Chalk could change their service and pricing model
to offer a free service to school district that contains a subset of activities, or a limited
number of performable actions. This service can then charge for upgrades including more
licenses, more actions to be taken, and more integrations with third party software. Such
models have been successful for a number of technology companies such as Slack. This
may increase their growth potential as the uptake from districts would likely increase, and
a simple change to their model would not take a substantial amount of time in
comparison to the other options. However, a big concern is the cost of implementation.
Such a change would require more development and pricing efforts, and the revenue
potential may decrease as some boards choose to use free software which may need to be
supported.
10. 10
Weighted Alternatives
Each alternative has been weighted against the decision criteria in a scale of 1 to 5
based on Chalk’s ability to execute against the criterion, where 1 is the lowest value and
5 is the highest. These were then multiplied by the weight of importance for each
criterion, and then totaled to give a total net score for each alternative.
Alternatives and Ability to Execute (1-5)
Weight
(1-5)
Grow Direct
Sales Force
Expand
Geographically
Offer
Freemium
Service
Cost of
Implementation
5 3 2 3
Growth Potential 5 4 5 4
Revenue Potential 4 5 5 3
Time to Implement 3 4 3 4
67 64 59
11. 11
Recommendation
By weighing the ability for Chalk to execute on each strategy in accordance to the
decision criteria, it is apparent that the alternative of growing the direct salesforce is most
beneficial for Chalk. As evidenced through the analysis of this report, Chalk suffers most
from lack of direct face to face sales reach with the important decision makers
responsible for implementing any technology solution. Though their efforts in online
targeted marketing through LinkedIn, AdWords and Facebook have had some limited
success in building their inbound pipeline, these efforts alone will not be able to reach the
full scope of the sales volume Chalk will need in order to dominate the market.
Additionally, their limited ability to send representative into schoolboards and trade
shows is a missed opportunity for reaching district administrators.
By growing their sales force and focusing on a strong outbound sales process to
complement their inbound initiatives, Chalk can effectively grow their market potential.
Top accomplish this, Chalk must look to hire one experienced sales team leader with a
knowledge in outbound and inbound activities that can help them establish processes and
incorporate sales tools into their marketing process. Efforts should be focused on
establishing a direct criteria for lead qualification and conversion into opportunities in
12. 12
order to maximize sales efficiency. This team lead can also help Chalk create additional
promotional material that can be used in order to source their leads. With a clear funnel
and lead targets, qualification and lead graduation process, and sales material that can
assist in the process, Chalk can start to immediately drive their outbound inside and
outside sales efforts.
The sales efforts should target the United States and Canada due to the immediate
proximity, similar culture, market familiarity, and large market size. These areas have
many school districts, both private and public, which can be targeted and assigned
contacts into their lead funnel. Outbound efforts can then range from email campaigns,
trade shows attendance in person, direct reach outs through LinkedIn, and even cold
calling. All efforts bust be able to identify and qualify the correct leads. Those that
graduate would then receive additional attention and would be pushed through the sales
process with high value services being offered. All sales staff must have a vast
understanding of the market needs as well as the solution in order to correctly convey the
benefits.
Chalk must also consider growing their direct support team. This team must be
able to handle requests from premium service customers as the continued customer
success can directly lead to more inbound leads through word of mouth. Given that chalk
has a working product that provides direct benefit, an understanding of targeted
marketing tactics, and a limited but growing ability to service customer needs, adding a
direct sales element for outbound and inbound optimization is the most important thing
for their success moving forward.
13. 13
Implementation
Chalk must move as fast as possible to implement the strategy in order to
maximize their benefits and create an immediate revenue flow which can be used to
continue their efforts. The implementation plan has been divided into three phases. The
Immediate phase is what must be done in the first month, the mid-term phase is between
month two and six, and the long-term phase is what must be done after six months to
ensure continued success.
Immediate Phase
The first thing Chalk must do is begin the hiring process one mid-level sales role.
The job duties of this role should include creating the official sales process and
implementing tools, staffing of junior sales force, and setting leads and targets. This
member must be hired within the next few weeks and must be trained on the product and
the industry. Immediately after being hired, the member must first create the sales
process and set a marketing/sales funnel up for clarity within the organization. Simple
and cheap CRM systems such as Pipedrive can be implemented to assist in the
qualification and graduation process. All efforts must also align with current marketing
efforts aimed at direct influencer and decision maker targeting. This new member must
also work with marketing to outline their outbound campaign tasks such as cold calls and
14. 14
trade show attendance. In this phase the marketing team must also focus on creating all of
the material necessary to support the sales staff in their efforts, such as use cases, product
promotional material, and digital asset optimization. Ultimately, within the first moth of
execution, Chalk must be at a good foundational position with their sales process that will
allow for optimization, growth and tweaking moving forward.
Short-term Phase
After the first month Chalk must focus on optimizing efforts and growing their
sales team with junior members. At this point there must be a direct outbound process
that the sales team can begin to follow in practice in order to grow their funnel. They
must identify and contact the cold leads that they build into their funnel. There will be a
limited success rate in converting these leads, however depending on the qualification
process, they may already be able to see some results. Efforts must be prioritized at
growing the top of the funnel in order to have a strong flow further down the funnel. As
leads begin to respond and become opportunities, more effort will be required to convert
their leads into sales. Cold calls, email campaigns, trade shows and other techniques that
have been established in the first phase must be executed upon in this phase. Thus, it is
essential that this phase is also used to create more sales staff listings and train all new
recruits on the product and established process. Within these six months Chalk can expect
a few direct sales, but their success will be dependent on the ability to convert their leads
and serve their needs face to face.
Long-term Phase
The long term phase will be focused on optimizing the entire sales and marketing
process in order to increase the qualification, conversion, and win rates. This will be an
15. 15
ongoing process where Chalk will receive both internal and customer insights which they
can then use to continually improve their efforts. In this phase it is expected that Chalk
will have many qualified opportunities which will require sales teams to convert to wins,
and which will require implementation efforts at school boards. Chalk must be optimized
enough to have smooth and quick sales flow, but flexible enough to make adjustments to
their processes and practices where necessary. At this point they will continue to grow
their sales and marketing team, as well as their customer support team to service their
customers. Revenue earned can be reinvested into the company to develop the additional
tools that Chalk sees their customers will need in the future. This should be a rapid
growth stage where product focus is vital in order to maintain current customers,
dominate the United States and Canadian markets, and allow for expansion into new
geographic regions.
16. 16
Appendix – Interview
Where are you currently in your road to success?
2 months ago entered Communitech REV program
20 employees after founding in 2012
Sales team of 3
1 sales person responds to big clients
Where are most of your sales?
85% from east coast
Exponential sales growth in Florida
Who are your competitors?
Rubicon, BYOC, KnowledgeHook, etc.
How many users do you have?
140000 free users
How many paying users?
30 paying school districts/schools
How are you marketing your product?
Search engine optimization
Pay per click advertising on Google, Facebook, and LinkedIn
Email
What are your biggest marketing challenges?
Lack of money and sales team size
School district demand and conversion of free users to paying users
Advocacy program to promote the product to school districts
Have you considered working with politicians this election to promote education?
Network is too undeveloped to know the right people
Attending educational events to grow network
Motivated to contact important decision makers of school boards
Have you considered traditional advertising with billboards near schools?
Not enough money to pay for this
17. 17
Who are key decision makers involved in purchasing your product?
Superintendents of school districts and principals of schools
School boards
Influence of teachers on their superiors
Why not push demand with parents?
Lack of influence of parents on decision makers in school boards
Do teachers want to truly use this product?
The older teachers prefer not to use it, but appreciate the simplicity of learning it
Teachers who want to use it understand the benefits of software for education
Do you have the ability to grow your sales team?
Have appropriate funding to pursue expansion
Understand commission pay to encourage effort from sales team
Are you listening to your customers for their needs and suggestions for improvements?
Most teachers are happy with the product
Attempting to make iterative improvements to reduce the learning curve
