How to sell your marketing service for a tech startup
This article will be helpful if you are a digital marketing freelancer or a digital marketing agency owner and you want to find high-paying customers from the tech world that will pay you 2-5-10K per month and more.
I’ve divided this topic into four subtopics.
The first one is
‘Why Tech Startups are the perfect customers for your digital marketing agency?’
because most agency owners don't realize why making services for tech startups is beneficial.
The second one is
‘How to sell to startups that just raised money?’
There are a lot of tech startups in the world, and you need to focus on startups that have money.
But the question is, how do you find the startups that just raised money?
The third thing I’ll tell you is
‘How to target startup owners on Facebook and Instagram?’
Spoiler it’s not by targeting the interest of ‘Startup’ in Facebook ads.
I’ll show you a better way to reach out to startup founders.
The fourth thing is
‘How to show your expertise?’
Because if you come to the startup owner and say ‘Hey, I can run Facebook ads!’, or ‘I can do SEO!’, or my favorite ‘Hello Sir, I want to provide you high-quality backlinks!’
You won’t probably get an answer.
As an Apiway founder, I get these messages every fucking day.
So let's get started, and the first topic we’ll cover is
Why tech startups are the perfect customers for your digital marketing agency?
If you provide digital marketing services, you have probably faced a problem where the customer pays you for 2-5 months and then churns.
You may think something is wrong with you or that you don’t have enough experience, but that's not the case.
They churned because the businesses you serve don't have a scalable business model.
Let me tell you a story about my father.
He is a painter and he decided to launch an art studio where he would teach kids painting.
This is a local business because kids visit art studios around their house, not on the other side of the city.
The seats in the studio are also limited because it's a studio, not a stadium.
I helped him with the Facebook marketing campaign, and guess what happened?
After a one-month campaign, we sold out all seats in the art studio, and now my father doesn't need my marketing services anymore 😂
Because all the seats in this teeny studio are already taken.
It means that his business is not scalable.
As an agency owner, you can earn more from one customer if they grow.
They can increase their marketing budgets, add new campaigns, and pay you more to manage these new campaigns and increased budgets.
You grow with them.
How can you earn more by providing a service for non-scalable companies?
It's impossible. You will stay in one place.
That’s why I recommend you pay attention to the tech startup niche because tech startups are good for scaling.
But in the beginning, let’s figure out how tech startups perform because the startup's growth model is completely different from common businesses.
When you figure it out, you will understand why it's cool.
Basically, the main business goal of a startup is to increase the valuation of the company.
You can increase valuation only by showing revenue growth.
In the startup world, it's named ‘Traction’.
Mind you, I said revenue growth, not net income.
This is extremely important to understand.
Tech startups sell digital products, not human's time.
That's why they scale by getting new customers, not by adding new employees who will do the job or adding new seats and barbers in a barbershop.
For example, in my startup Apiway, to scale, I need more digital marketers as customers who will use the product, and to provide this, I just need to boost marketing and server infrastructure. Not add new people.
That's why paid marketing is the most important thing in the tech startup business.
Another important thing about startup scaling is that startups live from one round of investments to the next round.
In most cases, it takes 12-18 months. In that period of time, the startup has to make 2x-10x in revenue.
If they don’t, they can't raise money in the next round.
On average, startups invest 40-60% of a new round of investments in growth. These are sales and marketing.
Let's do a bit of calculation. A startup raised $1.5M. In the next, let’s say, 15 months, they’ll spend around 800K for marketing from the last investment round.
So every month, they’ll spend 50K+ on digital marketing and you can get a piece of cake from this cash flow.
Don’t forget that startups start to get revenue from sales, not just from investments. That's why budgets for marketing in this case can be around 100K per month.
If you charge 10% of the marketing budget, you can get 10K per month in the next 15 months.
Try to guess what will be next if you provide real growth. Actually, it is your job.
The startup will raise the next round of 5M-10M in the investment round because you have provided them growth using paid ads.
And the most important thing: they will continue working with you.
Because if you were working well, why do they need to change workhorses?
They'll just say, ‘Ben, you know, you did a great job. Let's repeat the same in the next 15 months with a 10x budget’.
This is how it works.
So, you can work with this startup for a few years.
Okay, we figured out why selling to startups is fucking cool.
Now let's jump into details.
How to find startups that have just raised money?
The first rule in B2B sales is to be at the right place at the right time.
The right time to reach out to startups is when they have just raised money because they have a ton of it, and you have two options:
either the piece of cake goes into your pocket or your competitor's.
So, the main question in this situation is ‘How to know when a startup raises money?’
You can figure it out using a tool named CrunchBase PRO. This is a ‘Startup Investments Wikipedia’.
All startups add investment rounds to their profiles on Crunchbase. They do it to generate hype and grab the attention of other venture capital funds that might be interested in investing in them in the next round.
You can also take advantage of this situation.
Customize a filter like ‘Send me alerts when companies in Industry X raise seed funding, for example’.
You’ll get a list of these companies.
Choose the company, click on the people tab, see the founders, select the CEO, and follow the LinkedIn profile link.
And Voilà! You have the perfect lead!
After that, you can reach out to the founder.
For example, if I were reaching out to myself, I would say:
‘Hey Anton, I see that you just raised a new round. Congratulations!
My agency has experience in promoting B2B SaaS platforms that are focused on marketing agencies.
If you are interested, let's jump into a discovery call, and I will show our last case study in the B2B SaaS industry.’
This is a good way to get new high-paying customers, however, there is one huge problem.
When startups raise money, it's like a red flag for bulls, and all good sales teams use this approach.
So, you start competing with other agencies that use the same technique. And these agencies often lose out to the ones that play the long game.
So, if you want a perfect result, you have to filter startups that raised money 10-15 months ago, which means that they are raising the next round right now, and you can start building relationships with them
At that moment, startups won’t buy your service because they only care about fundraising for the next round.
But when they have done it, you’ll be much closer than other agencies because you have already built a relationship with them.
You can use this method when making cold sales. Now, let's figure out another tactic that you can use with paid ads.
I won’t teach you how to use paid ads because I think you are already familiar with them.
The main question is
How to target startup owners right?
I had a lot of conversations with media buyers and asked the question,
‘How do you target startup owners?’
and In most cases, the answer was, ‘I use target interests on Facebook such as Startups’.
Anyways, this is actually a bad idea because it is a very broad audience.
Every small business owner thinks that they have a startup.
Furthermore, in most cases, marketing agency owners also think that their agency is a startup, which is actually not.
I hope I didn’t upset you, but the ugly truth is better than a beautiful lie.
If you want to target startup owners, you should use very specific target interests that can only be interested in tech startup founders.
The first interest that exists in Facebook's target options is ‘Y Combinator’.
Y Combinator, also known as YC, is the most famous startup accelerator in the world.
People who are interested in YC are 100% involved in the startup niche because if you are building a startup and you don’t know what YC is, you are doing something wrong.
The second interest is ‘Paul Graham’.
He is a founder of YC and the most influential person in the tech startup world.
The good thing is that common entrepreneurs don't engage with Paul's content, so you won’t spend your budget on them.
However, all startup founders have read Paul Graham's essays.
The third target option is ‘Dave McClure’ and ‘500 startups’. Dave is the founder of the ‘500 Startups’ accelerator, which is YC's main competitor.
These few target options allow you to cover 1 million people and 80% of startup founders all over the world.
Also, you can try to use different target audiences using startup slang.
I also did it in my marketing agency.
One of our major customers was a tech startup, and during our provision of marketing services for them, we found that they are struggling with API integration. That's why we launched Apiway.
By the way, many people have asked me to provide more details about it,
and that’s why I created a map with a step-by-step guide on how to open a marketing agency, how to scale it, what sales and management techniques you have to use, and finally, how to transform the agency into a tech startup to get subscription revenue.
So, if you are interested in scaling your marketing agency, you can download this map and watch the video where my team and I show you our step-by-step path that you can replicate much faster than we did.
Follow the link and start scaling your marketing agency - 5-Level Digital marketing career path
Okay, you already know the best way to reach our startup founders, but now let's discuss our fourth and final topic:
How to show your marketing expertise to a tech startup founder?
Well, the problem is that startup owners only listen to investors and other startup owners.
They don't listen to common marketers. These guys are real bastards. I know that because I'm one of them. :)
Tech startup owners that have raised $1m aren’t stupid.
Moreover, they are more experienced than you because they have a background.
What background do you have in your 20s?
It means if you come to them and just say ‘Hi, I can run Facebook ads or SEO for your startup, let's start work,'
it’s not going to work.
As a startup founder, I get this kind of offer every day.
So, to get a good result, you have to use the golden rule of sales:
‘Before selling something, you should get the key to the customer's ears’
Basically, you have to explain why they should listen to you as soon as possible.
When you already reach out to a lead, there are three things that you have to do:
First, show that you are a responsible person.
I need to see that you have a business email, website, LinkedIn, Instagram, and some content. I need to be confident that you are an adequate person. You need to have social proof.
Second, you have to show that you do stuff that I'm looking for. You need to show me that you understand my business, my marketing strategy, and my sales strategy.
I'll give you an example.
Every day on my Instagram, I get 2-3 offers from lead generation agencies. They try to sell me their LinkedIn outreach service.
On Apiway, our plans start from $9 per month.
It means that if we build a sales strategy via a sales team, our unit economy will never work.
Direct sales work in service-based businesses and only if you sell enterprise, not SMB software, that's why these guys will never sell me their lead generation service.
But now when I started my YouTube channel, it is actually possible to sell me a YouTube promotion service.
Finally, the third thing is that you need to understand the client's niche.
I'll tell you a quick story about how we hired an SEO agency for our startup.
I was looking for people in this field, asking other startup founders and CMOs about their experience in SEO.
They recommended me to an agency.
The founder of this agency made a 20-minute pitch talking about B2B SaaS case studies.
We had just raised money and invested in SEO.
This guy showed me his expertise at the right time. Do you think he showed me some kind of magic on this pitch?
Of course not. He just was adequate.
There are other examples:
I had an offer from media buyers, and it was like ‘Hey, Anton! We run Facebook ads. Are you interested?’
Do you really think that people who are building a tech startup don't know how to launch Facebook ads?
Maybe they don't have deep knowledge, but they are familiar with how to run a simple campaign.
But if this person comes to me and says:
‘Hi, Anton, I see you created an interesting sales strategy for your startup.
You're not running ads directly to your product.
Instead of this, you created an online course ‘How to scale a digital marketing agency because your software customers are the marketing agencies’.
You're selling this course and reinvesting the money in paid ads again which can get more marketing agency owners' attention.
That's interesting, and I can help you with scaling Facebook ads’.
So It means that this person knows what I'm doing, and I don't need to waste my time explaining my strategy.
After these words, I quickly figured out that this person has a higher marketing mindset than other media buyers who send me offers like 'Hello Sir, I want to provide you high-quality backlinks for your website.
It is already a marketing meme among my friends. 😄
Let me give you another example.
You come to me and say:
‘Anton, I see that you perform in (my competitor's niche name), and they are doing this, this, and this, and you don't do this, this, and this.
We know how to do this, this, and this, and we can help you’.
So, let’s sum up.
If you reach out to a startup at the right time, show that you are an adequate person, show that you provide the service that the startup needs exactly at that time, and show that you have the expertise, you’ll increase your conversion by ten times.