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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.

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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.

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Business Entrepreneur

Why CloudApp needs to be in your business toolkit

(EDITORIAL) CloudApp is simple yet powerful for any sized business, keeping your productivity at an all-time high.

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Are you fed up of screenshotting something and taking the time to drag it into a Slack window to share with an employee for them to ask you what you meant by this. Well, so was I. Working remotely occasionally has its blunders when it comes to communication, the struggles of explaining what you meant without the need to meet via a video call or jump over to another person’s desk can sometimes be a tricky situation to be in.

This is the same for in-office situations too. There’s been plenty of times in an office where I’ve had to break my own workflow or someone else’s to head over to their desk to visually explain something. A potentially useful period of time.

A few weeks ago, this pretty much came to a stop. After receiving two emails during a week in October with two types of link attachments, I was curious what they were. Clicking into these links, I got a visual demonstration of what the person was speaking about. I was so impressed. From a screen demo of a website to how something worked and what buttons to click to get a desired outcome. I was blown off my feet.

Simple as it was, the app is called CloudApp. Both available on Windows and Mac, CloudApp’s primary goal was allowing users to capture these moments like a screenshot or a screen record to help explain the thing in front of you, with little worries. The magic didn’t stop there, once I started playing with CloudApp, I recorded a short demo of a site bug/issue that we had and instantly I heard a “ping”. The recording was captured and ready in a paste-able link.

Within seconds, I sent over the visual demonstration. Dead simple, hugely effective.

By the end of the working day, I had visually explained 98% of things in Slack conversations, emails, mobile texts and even to those I was sitting near. It was a crazy addition to my Mac and productivity across my day and it didn’t stop there.

CloudApp also did a host of beneficial things like allow you to annotate images or screenshots, create GIFs, upload files and even record webcam videos too to support your screenshots.

I would recommend CloudApp to everyone. I was so impressed with their toolkit.

The freemium account is great too. You get unlimited screenshots and annotation with 15s of GIF and screen record creation, which was so reasonable for someone getting started. There are additional pricing options too. CloudApp is available for Mac and Windows and is well worth installing to take full advantage of visually explaining things to friends, colleagues, and those struggling to get a drift of what you are trying to talk about.

Download CloudApp for Mac and Windows.

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Business Entrepreneur

How to determine your freelance rates based on data, not your gut

(ENTREPRENEUR NEWS) Setting freelancer rates can be quite the tricky business. This tool does arms you with the data you need to grow your business

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The bulk of my professional career has been spent as a freelancer. The designation of “freelancer” has taken me on an interesting path that allowed for projects and opportunities I didn’t even know existed.

While I’m grateful for each and every opportunity, I now look back on some of these experiences and realize that I was vastly underpaid. For the most part, this is my fault as someone paying for a service is looking for the lowest possible rate and I never bothered to bargain out of fear of losing the role.

It was even at a point where I dreaded being asked my hourly rate because I didn’t know what the norm was. There was always a fear of charging too much and getting dropped for someone cheaper, or charging too little and looking inexperienced.

We recently talked about knowing your worth and how we freelancers often under charge for our services. Luckily, as this career path becomes more and more popular, there are now more resources devoted to helping us know what to charge.

Such a resource comes in the form of Freelance Rates Explorer. Created by Bonsai, this online tool gives users the ability explore rates from 40,000 freelancers worldwide.

“There are many sites like Glassdoor that offer salary data comparisons for full time employees,” said the tool’s developers. “However, there isn’t a site like this dedicated to provide insights on freelancers rates. We had this data, so we built the Rate Explorer to make it easy for freelancers to compare their rates in the largest publicly available rates database on the Internet.”

In order to find the standard rate for their field, users will input their role (either development or design), their skills (full stack, front-end, back-end, DevOps, iOS, and Android), experience (in years), and location. The Rate Explorer then generates a bar graph based on the answers and will show the most common hourly rates based on the number of freelancers and the rates range.

Bonsai also offers proposals, contracts, time tracking, invoicing and payments, and reporting. All of this is designed for freelancers.

As for the Rates Explorer, seeing the numbers calculated right in front of you may make you realize that you’re vastly underselling yourself. This tool can be especially beneficial to use now as we go into a new year and may be updating contracts.

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Entrepreneurs: You’re unemployable in your own company, must define your role

(ENTREPRENEURS) Once you’ve built a successful business, it’s time to reexamine your role and determine where you fit in best.

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In my experience, most entrepreneurs are “accidental entrepreneurs.” They happened to be good at something, or they had a unique one-time opportunity to provide a product or service to the market. Then years later, they wake up one day and realize that they’re running a big business.

As an entrepreneur, one of the unintended consequences of building a business is that you become essentially unemployable within your own organization. After living the life of freedom, flexibility and responsibility of being a business owner, it’s difficult to go back to a “nine-to-five” job. This is why many entrepreneurs don’t enjoy staying with their businesses after they’ve sold to other organizations. Within months, they are frustrated that they’re no longer in control and the new owners are (in their opinion) making poor choices.

I see many situations where entrepreneurs are bad employees in their own organization. In fact, they may be the worst team members in the organization by having inconsistent schedules or poor communication skills and/or by inserting themselves into areas that aren’t useful. They can also have too much freedom and flexibility. And while most entrepreneurs insist on clearly defined roles, expectations and goals for all of their employees, they don’t always take the time to define their own roles, expectations and goals.

So why do entrepreneurs become bad employees?

I believe that it’s because they don’t have someone holding them accountable. Think about it: Who do they report to? They’re the owners. Part of the definition of “owner” is being accountable for everything but not accountable to anyone. Having a board of directors, a peer group or a business coach can provide some accountability for them, but another solution is to clarify their roles in the company and then abide by those definitions.

If you find yourself “unemployable” in your business, it’s time to define your role. It starts with outlining your main focus. Do you concentrate more on day-to-day execution or strategic, long-term decisions? Do you consider yourself an owner-operator or an investor?

Most entrepreneurs start as an owner-operator and put in countless hours of sweat equity doing whatever needs to be done to build the business. But over time they reinvest earnings in the business and hire a management team so they can step back and take on a more strategic role. Sometimes it’s not clear when the entrepreneur makes that transition, which can lead to challenges for the entire team.

Focus: Strategic Overview

If your main role is in dealing with long-term, strategic decisions, then it’s important for you to communicate that to the team. Clearly delegate tactical roles and responsibilities to the leadership team.

I’ve seen many instances where owners do more harm than good by haphazardly injecting themselves into tactical decisions that should be handled by the leadership team. Instead of jumping in when they see something they disagree with, I encourage owners to actively “coach” their leadership team to be better leaders. The approach of micromanaging every decision of others will frustrate everyone and lead to an underperforming organization.

I have one client that decided his role was to build strategic relationships and work on a new service offering. He was confident that his leadership team could handle the day-to-day operations of the business. Over time he discovered that being in the office every day was actually a distraction for him and his team. So, he moved his office out of the building.

To maintain his ownership responsibilities to the company, he scheduled one afternoon a week to physically be in the office. Team members knew they could schedule time with him during that weekly window when he temporarily set up office space in a conference room. Not having a permanent office in the building also sent a message to the team that he was not responsible for day-to-day decisions. Sometimes not having an office in the building is better than the team seeing the owner’s office empty on a regular basis.

Focus: Day-to-Day Execution

If you decide that your role is in the day-to-day execution of the business, then clearly define your role in the same way you would define any other team member role. Are you in charge of marketing? Sales? Finance? Operations? Technology? R&D? Or, some combination of multiple roles? Take the time to outline your responsibilities and communicate them to the team.

Just as you define your role, also define what you are NOT going to do and who is responsible for those areas. After all, sectioning off some tactical work does not abdicate you from long-term decision-making. You must set aside time to make the long-term, strategic decisions of the company.

Being an entrepreneur sounds glamorous to those that haven’t done it, but ultimately, the owner is accountable for everything that happens in their organization. It can be quite sobering. And while some entrepreneurs have a delusional belief that they can do everything in a company, it’s not a path to long-term success.

All entrepreneurs have to decide what their role should be in their organization – even if it means that they’re contributing to their “unemployable” status.

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