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.

You need to learn the rules of the playground first-hand

A few weeks ago, I was invited to give a talk to a large financial services firm that was having an off-site for one of their divisions.  The audience was a group of 60+ marketers that had gathered for a three-day meeting on a variety of topics.  I was there to talk about innovation and how a company could leverage digital as a key driver.  During the Q&A that followed, one of the marketers in the audience asked about keeping up with all the new digital platforms that are launching.  In particular, she wanted to know how important it is for marketers to have first-hand experience with things like Snapchat, ApplePay, etc.  Do marketers really need to try out everything new thing that comes on the market?

Well, the short answer is yes.

The thing is that marketing has changed quite a bit over the last decade.  If you think about the traditional marketing toolbox of a few years ago, just about everyone watched TV, read magazines, and drove by billboards.  So when we were making choices in the marketing mix, we were deciding between tools that we had first-hand experience with.  We knew the rules of the medium and could focus on the creative.

But today marketers are faced with more choices than ever before.  And for the first time ever, we are being forced to decide if a channel is right for our brand when we might not know what the channel is.  That is why marketers need to be prolific when it comes to experimenting with new platforms.  You need to download the new app that people are talking about.  You need to write a post on Medium or LinkedIn Pulse.  You need to support the latest project on Kickstarter.  And you need to buy that new FitBit, Nest, or Gear.  The goal is learning the rules of the playground first-hand.  You have to push yourself to experiment with everything that is new so you know what the boundaries are.  How do people behave on the platform?  What is appropriate and what is seen as shilling?

Before you can ever make that decision as a marketer, you have to be able to make the decision as a consumer.  And that means putting yourself out there and learn first-hand what all these new shiny objects are about.

Should your brand be focused on Social Currency?


Vivaldi Partners recently released a study entitled “Social Currency” that looks at why brands need to build and nurture social currency.  Social Currency is one of those sayings your hear tossed around, but no one ever really defines it.  That is one of things that makes the Vivaldi study so interesting.  In the words of Vivaldi’s founder, Erich Joachimsthaler,  Social Currency is:

“the extent to which people share the brand or information about the brand with others as part of their everyday social lives… Social currency is not  just about conversation, buzz or community.  It is all this and much more. It does not impact every brand equally and certain levers of social currency are more important than others in driving value for companies.”

The report is a great read but there are a couple of key takeaways and snippets that I have captured from the report below:

Social Currency consists of six core levers

  • Affiliation: What share of your users has a sense of community?
  • Conversation: What share of your brand users recognizes and stirs buzz?
  • Utility: How many of your users derive value from interacting with other users?
  • Advocacy: How many users act as disciples and stand up for your brand?
  • Information: How many of your users feel they exchange fruitful information with others?
  • Identity: How many of your users can identify other users?

Social currency represents a shared asset of consumers and company-owned brands

It originates from interaction between customers and consumers.  Companies can stimulate the creation of social currency through means that cultivate a sense of community, strengthen consumer interaction and provide value to the community.  When done credibly brands earn trust  and can grow into an integral, almost symbiotic role in customers’ lives.

What matters is “meaningful” social currency.

Social media efforts should be evaluated in terms of the extent to which it contributes to a brand’s equity, the extent to which it drives category or industry attributes or connects with consumers. Example: successful viral efforts like Burger King’s subservient chicken digital efforts created a lot of buzz but did not really contribute to the strengthening of key components of its brand equity nor did the effort deliver on factors that drive purchase and consumption in the category.

Social Currency must be built and nurtured

Today’s digital technologies open up new and enormously exciting opportunities for building social currency. While there has been a plethora of experimentation over the years, it is clear that we have merely scratched the tip of the iceberg. As technologies evolve, new ways will emerge of how social currency can be built over time.  The big conundrum for marketers is that in an online world, brands are far more broadlyand proactively discussed than ever imagined.  As these conversations are often beyond the direct influence or control of a company, marketers must find innovative and creative ways to thoughtfully leverage these independent brand conversation and act credibly in the digital arena.

The full report does a great job of pulling out examples of Social Currency across different product categories.  Also, for more perspective on the topic, the May 2010 issue of Fast Company used the study for the article  “Five Steps for Consumer Brands to Earn Social Currency

A Dozen Books that should be on every Brand Manager’s Bookshelf

Anyone close to me will tell you that I am a huge reader of everything from books to magazines to blogs.  So it is no surprise that a question I often get is:

“What should a Marketer be reading?”

To answer that, I added the Amazon widget to my blog sidebar a few months ago.  But since a good number of RSS Readers never even make it to the site, I thought it would be helpful to write them up in a post as well.  With that, here are:

My Dozen Books for a Brand Manager’s Bookshelf

1.) A New Brand World: Eight Principles for Achieving Brand Leadership in the Twenty-First Century by Scott Bedbury

This is one book on branding that I turn to time and time again.  Scott was a senior marketer at both Starbucks and Nike during the days when their brands were truly shaped.  His thoughts on “Brand Mantra” alone are worth the cover price.

2.) Outliers: The Story of Success by Malcolm Gladwell

Personally I don’t think Gladwell has ever written a bad book.  His latest is yet another example of why that holds true.

3.) Groundswell: Winning in a World Transformed by Social Technologies by Charlene Li and Josh Bernoff

Lots of marketers can fall into the trap of chasing “shiny objects” in the digital space.  Groundswell puts an end to that practice by giving Brand Managers a structured way to approach Social Media.

4.) Reality Check – The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition by Guy Kawasaki

It might be a book written for entrepreneurs initially, but it is really the perfect read for “Embedded Entrepreneurs” in companies everywhere.

5.) Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000: Running a Business in Today’s Consumer-Driven World by Pete Blackshaw

I am fortunate enough to list Pete as a friend and mentor so this might be a biased endorsement.  But all the same, Pete gives a wake-up call to the industry to start really paying attention to what consumers are saying in this new world.

6.) What Would Google Do? by Jeff Jarvis

It’s not a book just about Google, but instead a look at the mindset that has driven Google to become one of the most dominant companies in today’s digital landscape.  That is something any Brand Manager can learn from.

7.) Secrets of Social Media Marketing: How to Use Online Conversations and Customer Communities to Turbo-Charge Your Business! by Paul Gillin

A follow-up to his first book, The New Influencers, Gillin writes a book that is probably hated by anyone calling themselves a “Social Media Consultant.”  This simple, easy to use guide about navigating online conversations and communities makes the space sound dramatically simpler than the “experts” make it out to be.

8.) Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business by Jeff Howe

If you haven’t thought about the dramatic impact that Crowdsourcing and Wisdom of the Crowds is going to have on your business, you need to pick up this book right now.  Simple as that.

9.) Accidental Branding: How Ordinary People Build Extraordinary Brands by David Vinjamuri

I consider this inspiration for how to be extraordinary in business.  This book outlines the amazing stories of brands like Clif Bar, Columbia Sportswear and Burt’s Bees.

10.) The Open Brand: When Push Comes to Pull in a Web-Made World by Kelly Mooney

The President of Columbus, Ohio based Resource Interactive, Kelly is a thought-leader in the brand and agency space when it comes to new models of marketing.  It is a great look at how “to open up to consumer involvement in a brand’s messages and offerings.”

11.) Tribes: We Need You to Lead Us by Seth Godin

I’d be surprised to find a marketer who hasn’t read Seth Godin before.  If not, Tribes is his latest and Purple Cow is one of his all-time classics.  All his works are short, quick reads…a welcome change of pace compared to most other business books.

12.) The End of Marketing as We Know It by Sergio Zyman

Zyman is literally one of the first marketing authors I ever read so his books have a special place on this list.  As the former CMO of Coca-Cola, his writings are what taught me that “Marketing is not an art, it’s a business.”

One Year Later: A Recap of Hard Knox Life

Today marks 1 year and ~200 posts since I started writing Hard Knox Life.  A lot has happened in that short time.  On the personal side, I moved back to Cincinnati and got engaged to a special woman.  And on the business front, I started an amazing new role at P&G and met tons of interesting people thanks to this blog and Twitter.

So in honor of the one year anniversary, I wanted to recap the posts that I’m most proud of here on Hard Knox Life.

  1. Lessons of the Square Watermelon:  Hands down, my most successful post ever…yet one I wasn’t even the original author of!  Thanks to a plug from Guy Kawasaki and Marketing Profs, it’s had over 20K views.
  2. What I Believe In: My Personal Leadership Philosophy:  The other post that search engines seem to love, this talks to how I approach my personal leadership philosophy in the business world.
  3. Congratulations Motrin, You Just Proved Why Every Brand Needs to Understand Social Media:  Motrin was the latest in a line of brands to get in trouble by not appreciating the force of Social Media.  It is a cautionary tale for any Brand Manager.
  4. Even a Brand Manager Needs Their 10,000 Hours of Practice:  My most recent post on the list, inspired by Bob Lefsetz and Malcolm Gladwell.
  5. How should Brand Managers approach the Social Graphs of Facebook Connect and OpenID?:  The debate on this one is just getting started and doesn’t show signs of slowing down in 2009.
  6. Networking Isn’t a Dirty Word:  There are tons of interesting people doing interesting things out there.  Are you the type of Brand Manager that sits in conference rooms all day or are you making it a point to get out there and find out what’s next in the world of marketing?
  7. If It Looks Like a Brand Manager and Talks Like a Brand Manager That Doesn’t Mean Its a Marketer:  My riff on a common issue in Brand Management and marketing.
  8. Mashable Says Brands Don’t Belong on Twitter:  Lots of great debate on this one.  As Twitter looks for a revenue model, I personally see brands being a potential way for them to get there.
  9. Did Mitch Joel Miss the Mark on His 10 Twitter Users that Marketers Should Follow?:   If you are a Brand Manager looking for real inspiration in how digital can change your business, then this is my take on 10 people you should follow on Twitter.
  10. The 10 Bloggers Who Inspire Hard Knox Life:  Fitting to end my list with the people who I personally love reading.

Did I leave any out?

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