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.
Here’s why you shouldn’t start a startup
(BUSINESS ENTREPRENEUR) Building your own startup and being your own boss sounds tempting, but be sure you make these considerations before starting out.
2020, a year for our generation that will most likely be marked in infamy for decades to come. At least I hope that this is the bottom of the barrel, because if there’s even further to go… Those fallout shelters are starting to look homey.
A lot of people, myself included, are looking for different options for new careers. Maybe it’s time to place some faith in those back-burner dreams that no one ever really thought would come to fruition. But there are some things about starting up a new business that we should all really keep in mind.
While you can find any number of lists to help you to get things going, here’s a short list that makes beginning a new business venture a monumental effort:
- You need to have a unique idea with an impeccable execution. Ideas are a dime a dozen. But even the goods ones need the right business-minded person behind it to get things going for them.
- Time, time, and more time. To get a startup to a point where it is sustainable and giving you back something that is worthwhile, takes years. Each of those years will take many decisions that you can only hope will pan out. There is no quick cash except for a lottery and you have to be extra lucky for those to get you anything. This whole idea will take years of your life away and it may end in failure no matter what you do.
- You have to have the stamina. Most data will show you that startups fail 90% of the time. The majority of those are because people gave up on the idea. You have to push and keep pushing or you’ll never get there yourself. Losing determination is the death of any business venture.
- Risk is a lifestyle. To get anywhere in life you have to risk something. Starting a business is all about risking your time and maybe your money to get a new life set up. If you can’t take risks for the future then you can’t move up in the business world.
- Bad timing and/or a bad market. If you don’t have a sense for the market around you, which takes time and experience (or a lot of luck), you won’t make it. A keen business sense is absolutely necessary for you to succeed in a startup. Take some time and truly analyze yourself and your idea before trying something.
- Adaptability is also a necessity. The business world can be changed at the drop of a hat, with absolutely no warning. Rolling with the punches is something you have to do or every little change is going to emotionally take a toll on you.
- Lastly, not all of this depends upon your actions. If you start something that relies on investors, you’re likely going to get told “no” so many times that you’ll feel like it’s on repeat. Not everything is dependent upon your beliefs and whims. You need to be able to adjust to this and get people to see things from your point of view as well. But ultimately, it’s not all about you, it’s also about them.
These are just a few ways that starting a startup could stress you out. So, while the future could be bright, stay cautious and think twice before making any life changing decisions.
Restaurants: Going digital is simple with these tools
(BUSINESS ENTREPRENEUR) In 2020, restaurants going digital is critical. Luckily, it’s also easy, safe, and may even save you money.
So, you own or manage a restaurant and you have yet to “digitize” your menu for COVID-era safe ordering? No problem! Transitioning your menu and service to the virtual realm has never been easier. There are a ton of options for restaurants to choose from to keep your customers feeling at-ease, your front-of-house staff happy, and the whole service experience streamlined for all parties involved.
A free app with over 500 restaurant partners and 5k+ active users, AAHI is a user-friendly platform that uses QR codes to share menus and NFC for contactless payments. AAHI boasts a 25% order increase for participating restaurants and who can say no to that, especially during these tough times. Additionally, you’ll be cutting down on operational costs by around 30% (better tech equals less need for servers!), and your laid-off staff will be able to collect unemployment if they need to.
Another free (up to 200 views a month) app with an emphasis on curbside pick-up is Orderlina. Customers scan a QR code, which takes them to the same menu they would see if they were going to eat in, making it an integrated experience. A bonus is that the app links your menu to your social channels. I always say, free marketing is never a bad thing! Plus, you’ll be more likely to gain followers and receive micro-content from satisfied customers. Win-win!
Especially with winter right around the corner and outdoor seating becoming an increasingly limited option (especially depending on where you live), everyone in the industry is eventually going to have to make the shift to digital – the question is when. Physical menus have become a thing of the past. Not only are they potential vessels for spreading COVID-19, but if you are using disposable paper ones, you’re undoubtedly creating unneeded waste. Same goes for the exchange of cash, or card payments that require contact. Good riddance!
The common goal across the entire industry right now is to stay open and bring in capital in whatever capacity possible, while also maintaining a healthy staff and a pleasurable, safe experience for patrons. That’s going to require some adjustment and creativity compared to service pre-COVID. By converting to digital, you are putting your best foot forward into the uncertain future for the restaurant industry.
Scientifically check your risk for burnout with this free quiz
(BUSINESS ENTREPRENEUR) This new tool lets you take a free self-assessed, science-based burnout test to give you an idea of how much self-care you need.
Concerns of keeping self-care and mental health in a positive spot – specifically in relation to burnout – have been a hot topic of discussion. While COVID-19 has exacerbated these concerns and stress levels, the issue of burnout has been around for quite some time.
Work burnout is often discussed within terms of work-life balance. Simple ways to avoid that crash are enforcing a hard stop on reading or responding to emails at a certain time of evening, or to continuously clean your workspace. Easier said than done, but it is critical.
But sometimes you have to look at the nitty gritty. Sometimes you have to ask difficult questions about your job and your personality in order to understand how burnout is impacting you. This can now be done with Global IT Burnout Index, a free, science-based assessment to tackle your stressors before it’s too late.
This is geared towards people working in tech (as the website reads, “burnout in tech is high and real”), but is useful for any industry.
To begin, you simply start the quiz and answer a few questions about yourself and your job (e.g. “I find it difficult to relax after a day of work” and then you answer based on how strongly you agree or disagree).
There are 10 total questions, and no personal information is asked (no name or email). It is open data, meaning it will help people on the other side better understand burnout; but, it’s totally anonymous.
The quiz takes no longer than 2 minutes. At the end, it will give you a number out of 6 measuring your burnout rate. The higher the number, the more likely you are to experience burnout.
Burnout has the ability to manifest physically and mentally, and can take a toll on your body and mind. Knowing if you’re experiencing high amounts of activity that can lead to burnout can help you know if you need to take precautions to change things in your life or job.
For those of us working from home, the situation is a Catch-22. You aren’t currently forced into a stressful commute. But it’s harder to pull yourself away when 5pm (or whatever your end time is) rolls around.
For people in the office or on site, it’s the same thing. You get to socialize (safely, obvi) with your coworkers, but there’s those on-site pressures.
No situation is perfect, but understanding if you’re in a situation where you could use a change or some help is incredibly important – especially these days.
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