The Swyft team has written extensively about early stage startups and their relationship to B2B tech startup PR agencies. From how to maximize the results of PR to tips on measuring the digital impact of PR, we have covered a lot of topics related to the beneficial impact of PR on business outcomes. Yet there still seems to be a lack of understanding around what constitutes value for PR in the eyes of startup founders, startup marketing professionals, and, yes, even VC investors.
So what exactly does value mean, and how should we think about it in terms of a startup seeking and receiving value from its PR investment?
Merriam-Webster defines value as “a fair return or equivalent in goods, services, or money for something exchanged.” In terms of PR value, the definition of value equates to beneficial results provided by a PR resource.
More often than not the provider of PR value comes in the form of a B2B tech PR agency as opposed to an inside PR resource. That’s because most startups operate with a lean staff, preferring to wait until they have enough market traction and revenue before hiring someone to handle PR.
With that in mind, let’s review what value for tech PR agency services rendered looks like in more detail. First, take a quick peek at the PR Agency Value Matrix that Swyft came up with a few years ago. It will provide additional context to the sections that follow.
Price Value:
One way to define value is to consider the price of retaining a B2B tech PR agency. Depending on the size and geographic location(s) of an agency, price can vary widely. Consider the cost of doing business in NYC or San Francisco compared to Austin or Denver. While there are tiers of agencies that may vary within each market, on average the fee structure in the Big Apple or the Bay Area will typically run 25-30% more based on the cost of living differential.
Why this matters is that when fees for PR support go up, the dollar increase results in more risk relative to the overall investment in a B2B tech PR agency. The more money something costs, the more of a return you will need in order to feel like the investment was worthwhile.
If the scope of services and capabilities are more or less on par no matter whether a tech PR agency resides in San Antonio or San Francisco, then it stands to reason that the risk is greater where the amount of money invested is the greatest.
Perceived Value:
Let’s take the same example from above and invert it. Say a B2B tech agency is based in the Bay Area and has a large team of PR professionals working in a well-appointed office close to Palo Alto or San Jose. If the agency comes highly recommended by a Sand Hill VC firm in Silicon Valley, and those VC investors are occupying seats on the startup’s board, then there is a good chance that the agency will have higher perceived value than an unknown agency in a smaller market outside the Bay Area. For some startup founders and startup marketing professionals, this perceived value is seen as a ‘safe bet,’ even if it comes at a significantly higher price point.
Startups are likely to downplay the higher risk with a belief that by paying a premium the results will yield an even better outcome, which implies a higher ROI. Whether that optimistic disposition is warranted, let alone actually pays off, will bear itself out over time. But, in a situation where a board member made the recommendation, it’s possible that empirical results could matter less than the comfort that comes from making a board member happy.
Proximity Value:
Another form of value is driven by a B2B tech PR agency’s proximity to a startup. Proximity can come in the form of geography or industry, or both. Take, for example, a startup based in Houston operating in the oil and gas industry. If that startup is on the verge of closing a $10 million seed round and has the presence of mind to hire a tech PR agency before the funding closes (not always a given), then it’s likely that PR firms who are in the Houston area will get a serious look. It’s also possible that the startup will expand its search to include Austin, which is only a few hours away and better known for its startup vendor ecosystem than Houston. Neither option will necessarily translate into greater risk from a pricing perspective as both markets are known for offering more price value than firms from the Bay Area or NYC.
As for industry proximity, some startups may feel that by hiring a PR agency focused on a niche industry, they will get mainlined into the media outlets covering the industry. If that ‘insider access’ doesn’t come at a premium price level, it’s entirely possible that this approach will deliver the promised value. On the other hand, most industry publications respond not to a previously developed relationship with a PR agency. Rather, they respond to the quality and relevance of the startup’s story, making it more about how an agency can discover and articulate compelling startup’s stories and less about the PR agency’s rolodex.
A final note on proximity value: There is even a case to be made that using an agency outside of a niche industry can bring a new perspective to a startup. A PR agency that burrows deeply into a single vertical can also develop a form of media myopia, meaning that they think of their client only in terms of how it will play in certain industry publications. An agency with an outsider’s perspective can potentially shake up the status quo by finding new ways to develop story pitches that resonate with a whole new media landscape.
Results Value:
This version of value, as its name implies, is tied to actual results an agency delivers. Exactly how results can be measured and deemed of value can vary, but it comes from an approach to measuring success that is agreed upon by the startup and the B2B tech PR agency. This value is also at least partially historic in nature as it can take between 3 to 6 months to properly measure how much media coverage a PR agency can deliver, not to mention the quality of said media coverage.
The question really comes down to how can a startup identify results value before actually engaging an agency to find out. There’s no easy answer, but with a little sleuthing and some pointed questions for the B2B tech PR agency, it’s not hard to determine that rare gemstone: an agency ready to deliver results that are good for the brand and budget.
And while there is an element of uncertainty to the start of any new relationship, what ultimately helps a startup mitigate the risk and provide a clearer path to success is not exactly rocket science. For instance, a thorough onboarding process where the PR team can connect with a startup’s key internal stakeholders (founder team, key execs, product marketing team, etc.) will allow the agency to quickly see and develop campaign opportunities that might otherwise take months. Defining success and setting up ambitious yet realistic expectations will also go a long way toward driving results value.
[Photo by Annie Spratt on Unsplash]