Connect with us

Business Entrepreneur

How to pitch your tech startup to ad agencies

In order to understand how to pitch your tech startup to ad agencies, you must first understand their priorities and goals, not just assume your tool fixes all that ails them.

Published

on

pitch your tech startup

pitch your tech startup

How tech startups often fail at pitching to ad agencies

Since only a fraction of a percent of brands really do social media well by having a team integrated into the DNA of their company responding in real time to their customers and bringing true engagement to the space, numerous tech startups have emerged at the intersection of big data, social media and marketing to help the less enlightened brands deal with the onslaught of conversations in their space at scale. Of course, on the lower end of the spectrum, these tools are used to fake social media. On the higher end, they’re a helpful filter to getting to getting some keen insights into customers, their behavior and needs.

To that end, every startup in this space faces some very unique challenges. Often, headed by what we’d affectionately call nerds, they don’t have an understanding of the landscape and realpolitik of selling in some of these concepts.

Whenever you’re selling something you need to know the motivation of the customer. In this case, we start selling to agencies or brands with an idealized notion of this:

  • What we think brands want: A tool that helps them understand their audience in real time and lets them ring the register in each market with a detailed response of all marketing efforts online and off. We’ve created the automated marketing silver bullet and brands will open their checkbooks to figure this out.
  • What brands really want: They want a tool that their ad agency can figure out and pay for out of their existing budget because they are too damned busy to be taking your phone call about some unproven product that probably shouldn’t be out of beta testing and there is no money left until Q4 2015 at which point this person will no longer be working there.
  • What we think agencies want: A versatile tool that will help analyze, deep fry and add a delicious powder sugar coated insight into the audience of each of their client’s brands complete with a package that lets them easily add new clients without costs becoming overwhelming.
  • What agencies really want: To not lose the client. To not get fired. To not lose the client and then get fired. To waste your time.

There are exceptional agencies doing amazing work who go above and beyond for their clients. But these are probably the agencies for the aforementioned small amount of brands who really get social. That’s not who you’re really selling to – that’s who you should give your product a free license to so you can get some awesome case studies. You’re selling to, who we affectionately call “everyone else” and everyone else’s motivations are suspect at best.

Remember, a brand’s job is to sell more products to the consumer while balancing a warm, fuzzy appearance that keeps them top of mind for even more purchases. An ad agency is hired to help with these things, but remember the agency is selling something too: hours and media. The hours are billed, coincidentally enough, hourly. Media is commission based. Do you know what’s not commission based? Your newfangled tool to improve engagement. Do you know what an agency can’t bill more hours for? Using your newfangled tool to improve engagement because that’s what they’re already being paid to be experts on achieving.

They will waste your time

When you understand the true motivation of an agency, this is where you go “But Marc, I get meetings with agencies all the time, they seem really enthusiastic about what we’re up to.” Which brings me to my final point: They will waste your time. It’s their job to know about your tool. Do you really think when you go show your tool to the client and the client comes back and says “Hey, why aren’t we using AudiencePulpified3000X?” they want to say “What’s that?” No! They want to say “Sure, we’re having ongoing conversations with them about their new DemoSlayer6000C product, but we really feel that there are some issues with the data modeling at this point so our team is monitoring their progress and continue to bill lunches with them to job number SPF-100-gB.”

How to successfully sell to agencies

Gosh, this seems so hopeless though, doesn’t it? Isn’t there any way to sell a new social media tool to agencies? I’m glad you asked!

Here’s how you sell into agencies:

1) Focus on new business and new projects: When you focus on new business, you’re working with the people in the agency who have motivations that align with yours. The new business director wants to win the account. They want to say that their agency is at the pinnacle of new technology and that includes your proprietary new tool that they are a preferred agency partner of. Therefore, they’re bringing insights and analysis that no one else has. And guess what? Slipping your fee into the budget at this stage is a no-brainer. And once you’re in there, you’re in there for good. You just need to avoid long term clients who are “automated” meaning “run by a team of highly enthusiastic interns.” New clients, new launches with existing clients open up the conversation to the appropriate “how can we have an edge here?” That’s where you come in.

2) Focus your pricing on agency profitability. I met one startup at a conference recently and saw a tool that, upon inquiring was $5,000 per month per brand. It’s a useful tool and they have great case studies, but it’s a staggering cost to pass onto a client, even without markup, in an unproven area. What would work best for me working on the agency side would be if there was some sort of snack-like sample of analysis on my client I can have for free that I can give to my client to give them a taste of what’s to come, not a bunch of infographics and charts. Then I really want pricing for all my clients as one big package. There should be an exponential discount once you start bringing 5-10 clients. Sure, you could look at that as 10 big brands you could still be charging $5,000 a month. Or you could give agency respect for the fact that they have the relationship with the client and therefore deserve to profit from it as well – especially now if they’ve proven themselves to be good partners in showcasing your product to other brands, they essentially become a free implementation and sales team. If you get another $500 a month per brand without having to do anything extra for it? That’s awesome. Once your product becomes an industry standard that everyone believes has to be part of the DNA of a marketing plan, then you can charge whatever you want.

3) Market your product to each different role in an agency or client. The person pushing the button on the social media accounts doesn’t care about the same things as the head of strategy. The head of strategy doesn’t care how it works, they just want the insights. The social media manager wants to know if this is going to be a giant pain in the ass to use and does it integrate with whatever they’re using now because they already have so many tabs open in their browser that the standard 2006 Acer laptop they’re using will die. Since pretty much every new startup in this space is the same thing approached 100 different ways, here’s a cheat sheet that will probably work for your offering:

• Chief Strategy Officer: It’s a dashboard! Look, pretty charts! Show your CMO how great you’re doing, it will only take 10 seconds for him to understand. It will help you justify your job, maybe give you a raise and bonus! It exports to a ready-made branded powerpoint presentations and even takes your client out to lunch with a robot that looks just like you programmed to say what a great job you’re doing!

  • Social Media Manager: It saves you time because now you don’t have to do all this menial labor for free – something that’s clearly beneath you with your certificate in social media wizardry from the University of Social Engagement Online because you’re obviously smarter than your boss and they totally don’t get it. It plugs right into HootSuite, Radian6 and all those other things you’re already using automatically, you really don’t have to do anything and your boss will think you’re even more of a genius because here are some fancy charts they can send their client that proves that because you got 5 likes per post instead of 4, you’ve increased engagement 20% this month.
  • New Business Director: Here’s a bunch of free stuff for the clients your pitching and super aggressive pricing if you win anything. We’re here to help you win and if you agree to sign with us upon winning we’ll promise that you’re the only agency getting these analytics on the Quaker Steak and Lube pitch.

If you do not know how to properly pitch them, agencies, known for coming up with brief, succinct statements such as “got milk?” will often look at what you’re doing and respond with a resounding “Huh?” It also pays to play the brands and agencies off of each other. In the brief time I was helping sell a social media tool to the agency side, it definitely worked to try to set up a meeting with a brand manager client side, then tell the agency you were already working with their client, who is interested in learning more. This is a great way to tap into the fears of losing the client and losing a job that are the key motivators of agency personnel these days.

4) Make sure you’re not too early I’ve been often stung by getting excited about a technology only to find that I’m a year or two too early and what I’m working on either isn’t a relevant as I think or it’s just not important to anyone yet. Last year was the tail end of the era in which brands obsessed over how many fans they could accumulate on Facebook and Twitter and the beginning of them wondering “Hey, how come they’re all ignoring us.” That said, I was selling a product that was supposed to improve engagement with content before anyone at brands or agencies realized or cared that their fans were not interacting with them. I equated it with trying to sell something that made a car go 30% faster when the car had just been invented and only travelled 10 miles per hour. “Hey, come back here – I also have a speedometer that tells you how much faster you’ll be going!” Until those cars are going 60MPH+ and getting somewhere faster is important, you’re going to get lots of blank stares.

5) Make sure you have great case studies:  I started a rather analog company in 2003 that I tried to market to brands. The response: “Great idea, let us know when someone else goes first.” Being analog and involving distributing thousands of free music CDs that people could play on their DiscMan™, I couldn’t afford to do this idea for free even once. But you, digital startup, you can! The most important thing in the beginning is starting relationships with customers and proving value. Give it to one brand, sell it to their competitors.

Of course, all of this is assuming that your agency-side contact every responds in the first place, because between overwork, fear, and complacency, it’s tough to even hear anything back. The absurdity of the situation is best summed up in Tony Price’s hilarious comedy routine about his switch from agency side to vendor sales – just remember to bring lots of bagels to the meeting.

Marc Lefton is a creative director and tech entrepreneur with over 20 years of experience. He's a partner in Digikea Digital based in NYC and Gainesville, Florida.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business Entrepreneur

‘Small’ business is a point of pride in the US, no longer a stigma

(BUSINESS ENTREPRENEUR) Small businesses make up the majority of companies, employers, and money makers of the American economy, that’s something to be proud of.

Published

on

American small business

Prior to the Industrial Revolution, all businesses were small businesses. Independent craftsmen served communities with vital services. Small merchants opened shops to provide the community with goods. Lawyers, doctors, and other professionals hung out a shingle to offer their services to neighbors. Small businesses were the norm. Some of the most beloved American companies started out local. John Deere, Harley Davidson, and King Arthur Flour, all got their start as small businesses.

Business changes led to a attitude change

It wasn’t until manufacturing allowed businesses to scale and produce more efficiently that the idea of big business became more important. Post-World War II, the idea of a small business became derogatory. It was the age of big government. Media was growing. Everyone wanted to be on top. Small businesses took a back seat as people moved from rural to urban communities. Small business growth plateaued for a number of years in the mid-20th century. Fortunately, the stigma of small business is fading.

Small businesses are the backbone of the economy

According to the Small Business & Entrepreneurship Council, the “American business is overwhelmingly small business.” In 2016, 99.7% of firms in American had fewer than 500 workers. Firms with 20 workers or less accounted for 89.0% of the 5.6 million employer firms. The SBE also reports that “Small businesses accounted for 61.8% of net new jobs from the first quarter of 1993 until the third quarter of 2016.” Small businesses account for a huge portion of innovation and growth in today’s economy.

Modern consumers support small businesses

According to a Guidant Financial survey, the most common reason for opening a small business is to be your own boss. Small business owners are also dissatisfied with corporate America. Consumers also want to support small businesses. SCORE reports that 91% of Americans patronize a small business at least once a week. Almost half of Americans (47%) frequent small businesses 2 to 4 times a week.

Be proud of small business status

Small businesses are the innovators of tomorrow. Your neighbors want to support small businesses, knowing that their tax dollars stay in the community, and that they’re creating opportunities within their own city. Your small business status isn’t a slight. It’s a source of pride in today’s economy. Celebrate the fact that you’ve stepped out on your own in uncertain times. Celebrate the dirt under your fingernails, literally, or figuratively, that made you take a risk to do what mattered to you.

Continue Reading

Business Entrepreneur

Positive self-talk can improve your performance

(ENTREPRENEUR) Speaking to others can be scary, but speaking to yourself is normal and can actually improve your speech performance overall.

Published

on

Performance mirror

Do you talk to yourself? Don’t worry, this is a no-judgment zone. I probably talk to myself more than I talk to other people – especially when considering the inner monologue.

I once read that people who talk to themselves are likely to be more intelligent. Whether or not this is factual I don’t know, but I do know that it’s important that you’re smart about the way you talk to yourself.

I’m a fairly self-deprecating person, so when I’m talking to myself about myself, it’s usually some sort of insult. About a year or so ago, I realized how often I was doing this, and made a conscious effort to be a little bit nicer. In that time, my mood has been a bit more positive.

This experience fits well into the research efforts of psychologist Ethan Kross, who has examined the differences in life success based off of how people talk to themselves. “Talk to yourself with the pronoun I, for instance, and you’re likely to fluster and perform poorly in stressful circumstances,” said Kross. “Address yourself by your name and your chances of acing a host of tasks, from speech making to self-advocacy, suddenly soar.”

This can be simplified as: Talk to yourself the way you would (or maybe, should) talk to someone else, and respond in the way you would want them to respond. Act with kindness, and receive kindness back – as a result, things are more cohesive, copacetic, and successful.

After working with participants in his study, Kross found a number of performance benefits to this self-talk method, including: better performance, higher well-being, and greater wisdom.

To demonstrate better performance, judges were brought in to listen to five-minute speeches prepared by participants about why they should be hired for their dream job. Half of the participants used “I” statements, while the other half referred to themselves by their own name. The judges found that the latter half performed better, and were found to have experienced less depression and felt less shame.

In regards to higher well-being, Jason Moser, a neuroscientist and clinical psychologist, measured electrical activity in the brain during participants’ usage of the different types of self-talk. During stressful situations, those who used their names instead of personal pronouns were found to have a significant decrease in anxiety levels, which positively correlated with a major decrease in energy use by the frontal lobe (talk about a win-win!)

With greater wisdom, the research found that people who use their names instead of pronouns are able to think things through more wisely and more rational and balanced way. “The psychologically distanced perspective allowed people to transcend their egocentric viewpoints and take the big picture into account,” Kross said of this piece of the research.

Well, Taylor is now ready to wrap up this article, and she hopes that you’ll give name-first self-talk a try, as The American Genius only wants what is best for their readers! Additionally, encourage people around you and those on your team to give this self-talk, first name idea a try – circle back after a week of trying it and share the results.

Continue Reading

Business Entrepreneur

How to turn your side hustle or hobby into a successful business

(BUSINESS ENTREPRENEUR) Surely you have a favorite hobby by now, well what can you do with it? You can grow it into a full time business, but how?

Published

on

hobby tools

Almost everyone has a hobby they enjoy doing in their spare time — something that sparks their creativity and engages their senses. If you look forward to your weekend pastime more than your nine-to-five job, perhaps it’s time to turn your passion into profits.

This path requires dedication and commitment. However, as you turn your hobby into a profitable reality, the hard work pays off. Getting to that point requires several steps. Thankfully, there are many resources out there that will help you pave the way.

  1. Establish the Basics: Establishing the basics will act as your roadmap for turning your passion into a business. This plan will no doubt change along the way, but it’s important to have preliminary ideas of where you want to take your enterprise.First, establish what you’ll be selling. Most hobbies can become a business, but you’ll need to hone in on what people will be buying. Anything of value — like products and services — can be an enterprise. Once you have that in mind, you can decide if you want it to be a part-time or full-time job. If you already have a job, managing your time between the two can get tricky.

    To stay on top of your tasks, you can look into a time management app or software. With these platforms, you can input how much time you spend on certain projects. From there, you can properly divide your time and give your new business the attention it requires.

    Next, you’ll have to conduct research. Is there a market for your product nearby? Can your business realistically take off in your location? How much needs to be e-commerce? Market research can help you determine who’s interested in buying and what you’ll need to get your business off the ground.

  2. Know Your Finances: Your finances are one of the biggest factors when starting a business. Too often, people rush into things without planning their expenses and resources first. Be sure to ground your plan with actionable steps. For instance, If you’ll be working from home, you can save on renting costs. However, some businesses require a storefront, so keep that in mind.You can also look into financial planning software or budgeting tools. Research relevant tips for budgeting when starting a small business. One pro-tip to keep in mind, if renting, is that you’ll want to save around six months’ worth of rent beforehand. That way, when you get started, you won’t rely on revenue to pay this expense.

    Additionally, don’t forget about taxes. You’ll likely need to pay estimated quarterly ones and potential sales taxes, too. There are multiple tools to help calculate these expenses online. Don’t be surprised by the costs, a hobby can be inexpensive but ramping up to a business can be costly, but worth it.

  3. Take the First Steps: As you form your plans and goals, you can start to take the first steps toward a sale. This phase consists of setting up space in your home or a store and developing your products or services.You’ll also want to set up a digital platform where you can access information at any time. In this central base, you can refer to all the details about your plans, finances and marketing strategies. With tools like Google Docs and Spreadsheets, creating accounting documents and client lists become easy.
  4. Create Marketing Strategies: Your first sale will likely be to someone you know. That’s an important step. No matter who it is, though, marketing and advertising can take your business to the next level. Make sure you have a strong online presence. With social media and Google’s resources, you can increase your reach.Having social media pages on multiple platforms can help spread awareness of your business. You can use hashtags and locations to establish yourself so others can find you. Most of these platforms have analytic tracking, too, so you can see who engages with your pages and when.

    From there, you can work with Google Analytics. It connects to your website and tracks activity and sales. It shows you which visitors come from social media, referrals and search engines. Then, you can focus your marketing strategies on strengthening those areas.

    Additionally, it’s vital to focus on search engine optimization (SEO). SEO works with search engines like Google to push your listing to the top with keywords and links. As you cover your bases with SEO and social media, your online presence can grow along with your sales.

  5. Network: Outside of the online world, you have options for growing your business, too. Local companies can work together to help each other succeed — you can look into other small businesses in your area for new opportunities. People often overlook the power of collaboration, but it can bring about significant results.If you can provide a service or product to local businesses, they may be able to advertise for you at their locations. For instance, if you’re a florist and provide arrangements for a local coffee shop, it could put your business cards next to your display. Customers will see your information and know they have a local option should they need flowers.

    You can also bring this connection to the digital realm. When you interact with other businesses on social media, people will see that engagement and click on your pages. That dynamic could translate to more traffic and sales. Check online to find the communities of your chosen hobby, the people there can fill you in on vital info that may be missing, or be a customer base you can connect w

  6. Keep the Growth Going: The last step is to perpetually keep your business growing. In this phase, you can quit your full-time job or reduce your hours to be a part-time employee. You can then focus on your new enterprise.You should expand your outreach through email newsletters, deals and coupons. You can give rewards to loyal or returning customers if you’d like, too. You can also add a blog or a section for customer service and inquiries to your website. Once your business grows enough, you may need to hire help.
    As you progress, adjust your goals. You’ll see that your trajectory differs from your original ideas, but you can keep building to take it to the next step. Set new milestones and watch your business thrive.

When a Hobby Becomes a Business

You should be aware that this a long-term process. Building a brand won’t happen overnight, but the small changes will add up until your company is a force in the market. It’s also an ongoing activity. The more you grow your enterprise, the more possibilities open up. It all starts with your hobby and your entrepreneurial spirit, which can take you anywhere.

Continue Reading
Advertisement

Our Great Partners

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Emerging Stories

Get The American Genius
neatly in your inbox

Subscribe to get business and tech updates, breaking stories, and more!