Starting your own social media business doesn’t seem that hard. What could there possibly be to it? All you have to do is know how to navigate Facebook, maybe post on Instagram and create cool stories. Right?
Our First Lesson Starting Our Own Social Media Business
In 2012, when we started Jo(e) Social Media, a well meaning person in the industry messaged us and said “you’re way under priced.” A new business, in a new industry, in an area where social media for business wasn’t necessarily embraced, we were wary of increasing our price. We were offering full marketing packages, including Facebook and Twitter, for $800 a month. I know. Ouch.
We quickly found the volume of work required to sustain our client’s accounts meant we couldn’t bring on more clients, and we couldn’t afford to hire help, because we were charging too little. We offered a diverse product line and did whatever someone was willing to pay us to do in order to bring in money. Websites, graphic design, small video production.
Joe and I decided to focus in on a single product. Social Media. It’s all we do, and by focusing, we became exceptional. We left web design up to professional web designers. We left graphic design up to professional graphic designers. We became professional social media professionals.
If your time commitment is excessive and your bottom line isn’t growing, you need to consider how you’re using your time. Find the most valuable product, and do that.
Selling Social Media
One of the things we were most proud of in our first year was our 100% close rate. If we got a prospect in the room, they always signed a contract. Always. Every single time. It was great for our ego! We eventually realized a high close rate wasn’t an indicator of the value of our product. It meant people valued what we were offering, and we were too cheap.
So how did we change this? We decided we wanted a 40% close rate. Everyone shouldn’t be able to afford us. We upped our value proposition, and reconsidered our prices. We chose a “fair to us, and fair to you” model. Today our close rate is around 15%, but the business we bring in is exactly in our ideal customer range. We’ve also started developing products to reach back to those who couldn’t work with us in a full capacity.
If you’re closing every sale, you’re not priced fairly for yourself.
There were no competitors to compare pricing to, so we decided to compare to traditional advertising elements. A 1/4 page ad in the paper was $250 per insert. A radio campaign started at around $1200. What we were offering was audience building, the ability to change messages multiple times, and ownership of the medium, plus public relations, ad creation and management, and customer service. So we upped our prices.
What happened? We immediately started landing larger clients for longer terms. Our business grew by 55%. Over five years, we would see a growth of 212%. We could afford to add staff, and reduced our work load significantly. And we won Business of the Year.
Price your product according to value, and others will value you.
Dealing With Competition
In our 5th year, more social media companies entered the market, priced below us. So we upped our value proposition. We offered more customer service. Training. Three people on every account. Weekly visits, local writers, more detailed reports. We’d spent the last five years learning exclusively about social media. We focus on learning more every day. Because we’d built a solid base, and brought on a well trained team, we were able to manage the influx of competition, and continue to grow.
Don’t skip your own social media
If you can’t manage your own social media, you shouldn’t be managing others. As you bring on more clients, time management will become even more essential just to maintain their accounts. Get in the habit now, with your own. It’s actually easy for Jo(e) Social Media to stand out in a crowd, because we publish consistently, on more than one platform. We’re not only louder, but we prove our product more often than our competitors. It also helps that we started earlier than them, and worked the kinks out faster.
A business that doesn’t focus on sales, doesn’t stay in business long. Sell yourself, always. You know the exponential reach of social. Use it to create fans from strangers, and then generate referrals. Your friends and family will only last so long and your growth will be stifled.
Remember to Grow, Yourself
Be great at what you do.
Always be learning. Constantly up your game. Raise the profile of a social media professional. Help others. Mentor those a few steps behind you. And reach out if you need advice. We’d love to help you avoid some of the bumps we’ve hit.
I’ve started 5 businesses. 3 gradually faded away. One failed in spectacular, world devastating fashion, and one has been successful to date. Starting your own social media company is a risk, and congrats on taking the leap. Refer back to the first sentence in my post. Someone told us to value our product at the very beginning. It took us a while to listen. And they were right. – Jo