The Truth of Selling to Brands vs Agencies

One of the constant questions that I see startups wrestle with is how to think about the selling process of brand marketers vs their agency partners. Frankly it is a question that does not have clean cut answer. But, it is a question that I think I am well positioned to at least help with since over my career I have spent two-thirds of my time on the brand side (P&G) and one-third on the agency side (Rockfish). So how should startups handle the brand vs agency debate? In my eyes, there is not a single answer but instead several questions that a startup should consider as they build their selling strategy:

Question #1: Brand Tech? Ad Tech? Retail Tech? Which budget would your service come out of?

Not all marketing budgets are created equal and not everyone on a brand has equal control on those budgets. It is vital that a startup realize the type of spend that their company would fall under. For instance, if you are a media buy or asking people to purchase based on CPMs than you are most likely AdTech. And as such, you are not going to have much luck pitching to a Brand Manager. In most cases, especially with the rise of programmatic buying, brands have empowered their media agency or internal media group to own all AdTech decisions. For all but the largest strategic discussions, marketers turn over the decision on which sites to buy and do not even begin to get into the details of things like real-time bidding. If you are a shopper marketing play (ie Retail Tech), then you need to be talking to the marketer (and their agency) that owns the relationships with their retail partners and customer teams. Or if you are Brand Tech / Digital Marketing, then you are probably talking to the Brand Manager and their digital agency. Startups can waste a lot of time and energy having meetings with people on the brand that really do not have a say on making the buy. Figure out which budget you fit into and then map the right relationships based on that.

Question #2: Who is impacted by your product? What work would take place to implement it?

While there is often a single decision maker that gives the go / no go decision on working with your startup, there is a good chance that decision will impact a multitude of folks on the brand and agency side. Those people can become champions of your solution or there is an equal chance they can become a poison pill that kills the deal. It is important to try and gain a 360 degree view of the landscape and how your solution might fit. For instance, many brands are currently working on global templates to bring a common architecture to their websites globally. If you are attempting to sell a social media content hub to the brand team in North America, you will have to realize the impact that would make on the global template work that another team might have been working on for over a year. As the worlds of the CMO and CIO continue to blend together, the need to understand the impact of your solution is more important than ever.

Question #3: Are you selling a “test & learn” to start or a broader implementation?

When a startup first sells to a brand marketer, they quickly learn the term “test & learn”. Think of it essentially as a trial or foot in the door with the brand that lasts a set amount of time (and usually is under $50K at max). Done right, it can lead to a bigger long term relationship. Done poorly, it can mean you have shot yourself in the foot and ruined any opportunities in the future. Some startups try to inherently avoid test & learns but that is a dangerous path. Instead, you should focus on clearly defining the success metrics of the test & learn and what next steps would look like if those metrics are met. Excuse the bad analogy, but you want to think of the test & learn as the engagement period that will hopefully lead to a marriage. Even in those situations where you are pitching a much broader engagement (for instance switching to an entirely new Content Marketing Platform), the startup should look for a way to get a brand to dip their toe in the water. If you have a great product that truly solves a problem that a brand faces, this trial can be what ultimately leads to you winning the business.

Question #4: Have other brands or clients at the company / agency worked with you before?

Most startups learn about the concept of social signaling when first dealing with investors. Well the same holds true with brand marketers and agencies as well. If your startup has worked with another client at an agency, they are going to do the due diligence of finding out what worked and what did not. And they will do the same if you have worked with another brand within a company. You can use this to your advantage as well because marketers like to know that someone else has taken that first risk on your startup and worked out all of the kinks. And frankly even more importantly, they know that someone else has the scars on their back from doing the hard work of getting your startup through legal and set up in their purchasing / payment system. That seems like a small thing but it is actually a very big thing for most folks. On the flip side, if this is the first time your startup has worked with a certain company, realize that you are asking that person on the other side of the table to not only say yes, but to also be a champion for you internally. You need to reward and recognize them for the extra work that in many times they will be doing on your behalf (this holds true if its on the brand or agency side).

Question #5: What is the role and authority of the person you are talking to?

One of the biggest mistakes that a startup makes is not understanding the person they are selling to. In general, they make two types of mistakes in this regard. The first is they assume the more senior the person is, the better for them to sell to. For instance, just last week a startup sent a LinkedIn message to the President of a large CPG that I know. This President has overall Profit & Loss responsibility for his division yet this startup was trying to get him to meet to talk about a small digital activation of less than $100K (a rounding error in his budget). The second mistake is that they don’t understand the role the person has within the organization. There is a big difference between a Brand Manager that has budget responsibility and an Innovation Manager that is responsibility for exploring new areas. Its not that one is better than the other but instead their internal reward structures are different. For instance, the Brand Manager is going to be measured on growing their top and bottom line of the business — not on creating a new innovative marketing campaign necessarily. Likewise on the agency side, the Account Director might not “own” the budget for the client, but they likely have one of the closest relationships and ability to convince them why it is worth taking a risk on a new idea.

If a startup goes in understanding these questions about their business and the company they are talking with, it will help them figure out the right path to explore. There are amazing opportunities for brands and startups to more closely collaborate but it will take both sides working to make the most of the relationship.

Originally published at www.hardknoxlife.com on October 14, 2014.