We Have a Meeting With Costco!

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Hans shy and Sarah seagull talk about what it takes to break into Costco how do you get on their shelves if you do get there how do you make sure your product will fly off of those shelves and if you succeed will you have the financing you'll need to ramp up production along the way Sarah offers some tips on enlisting Costco influencers and Hans explains the inner workings of wonder crowdfunding campaign where you can invest as little as $150 and where the company hopes to raise $1 million you can find a link to their investor pitch in the show notes plus Sarah responds to a Smart listener suggestion of how to avoid getting ghosted by potential clients after preparing elaborate and expensive proposals even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which Inc magazine recently named the best newsletter for business owners and which you can subscribe to at 21h hats.com where you can also find transcripts of our podcast episodes and lotss of other articles and interviews joining me this week on the podcast are regulars Hans sh who is co-founder of Windex and e-commerce Bakery based in Austin Texas and Sarah seagull who is founder and CEO of seagull communication a public relations firm based in San Francisco and please take a listen to my quick chat with Rob Levan co-founder of our sponsor work better now the episode is titled we have a meeting with Costco welcome Hans and Sarah it's great to have you here Hans we haven't spoken to you in uh in a while now it sounds as if you guys have had a lot going on tell us about it what's happening yeah I think it's been a while we are on our way in our fundraising probably was the worst possible time to do fundraising but actually like we took it ins St I think I'm very I'm very happy that we managed so we kept going the best way that we could even if the fundraising hasn't really come through just yet so our way to retail is underway and we got uh actually Costco reached out to us so we have a meeting soon and we're preparing for that and it's a very exciting time to be because I know if you ever had to look for a buyer in retail they don't want to be found yeah I was going to say they reached out to you yeah they did it was funny actually we got reached out by two different people at Costco with a day or two of difference I guess that all of the pr efforts have been paying off it's very exciting a very exciting place to be because it's like playing wor Waldo all the time they will not get back to you like finding who the right person to talk is requires a lot of detective work and to have it fall into our lap like that is very exciting so we're really hoping that we'll do a good job but I think that we know the C so well because we're always on top of it and mostly because we're always complaining about it so I think that we have a very clear understanding on how to win in that channel I think I don't want to blow it but that's where we are and Hans is this a Costco local or Regional or national actually from their headquarters in California most like they're going to want to play with it locally first happy to do that because we're definitely not in the position just yet to go into a national account all of this year has been about that is that you keep going like yes one of the key PES if you want to go to retail is to actually have the retail invested in it but you also have to do a ton of things on your side and it's not the smartest thing to just wait until the moment comes because it's not going to be like a fairy good mother with a one and all of a sudden you're retail brand it requires a ton of things and a ton of conversations because you know your product very well but there are so many unknowns we've been really trying to do the work and to be the most um optimistic if you will about okay these things are going to come true so we need to be prepared for them and I think that's really benefited us because we come to this places very well prepared do you have to go to California to the headquarters for this meeting with Costco no no this is going to be a zo meeting I would hope that we can do it in person soon I really I'm not a fan of Zoom meetings I don't know if anyone is but no we're going to start with a zoom meeting the thing about us is that people really like you when you give cookies to them it makes a lot of our job very easy like I have never been into a room where they don't welcome me with open arms because I have cookies that that could be a a good tip for anybody you don't have to make them to yourself absolutely in our case it really aligns with the whole thing that we're doing so I it's probably not the same if you selling I don't know olive oil oh here's a bottle of olive oil doesn't have the same thing so we're just lucky that we're in a theory where people really get to enjoy the thing and we really talk about it so there's so much we are doing now some form of cookie lollipop whenever we have events and people love taking pictures with that so it's a whole different game and then they remember you everything that have something to do with the census you remember so you will remember you say how people will remember will forget your name but they will remember how you make they make you feel that is absolutely true in a positive way they will remember how the cookies made them feel aside from sending cookies what do you have to do to prepare for this meeting with Costco have you researched strategies yeah the first thing we did was go to Costco and look at the category we've been look like we do this all the time we've been looking at the category constantly and one of the risks that you're run when you're doing that oh I know the category like the palm of my hand and that is probably a mistake so we are always going to the supermarket and looking okay so what's changing what's new what's out what's in that type of thing the first thing is to understand the category and say okay where do we have an opening here because the approach that we're taking we're looking at different versions of the same product so one is the fresh cookies as they exist with Frozen the other one is uh the cookie though so you can make them home and the last one is the cookies but shelf stable made sh shelf stable I think that's first thing that you need to do is understand where there's a gap in the category and in our case the category is cookies so you would say oh cookies is super saturated but that will be true of every single thing that you want to put in a supermarket I find it really hard that you're going to invent any your category I would say the first step is to go and understand the pricing because the last thing that you want to do is go oh I have these cookies and they will retail for $24 for a pound of cookies and probably they will like them very much but it doesn't really make sense for the channel so if you're going to I don't know a one maybe you have a little more leeway with the priz or you can work with a different type of presentation so the first thing is that like go and see what's out there and what are you going to be inevitably compared to because I have some experience with cpg I have dealt with Buyers before and the way that it works is when you're putting out a menu you have a set of offerings and you're trying to maximize your returns so you want to have in your shelf the things that will really make the Shopper think oh I can find everything that I could possibly want here and that is a balancing act because yeah I'm pretty sure there's a hundred different brands of cookies that would love to be in Costco or would love to be in Walmart but you need to figure out where do you fit and also I think it's good to be able to see Say Hey I want to understand I want to be helpful for you because this is the reality of buyers they are in a business and as much as my business is being measured like my business success is measured theirs is too I mean they have a boss who is probably the national buyer or the regional buyer of the I'm not sure the the structure VAR but they want their aisle to perform so what they need and this is true I think of every business what you need to bring to people who are The Gatekeepers is Sol is hey I'm here to make your life better I'm here to make your life easier how can I do that as opposed to hey I have this product and you cannot live with without this you need to have it why they're going to ask because we're the best cookies ever and they're going to say I'm not interested and frankly with good reason most of the time Sarah if I'm not mistaken I believe you've helped some clients through the process of uh trying to sell to Costco is that right yes we weren't involved in the whole um deal making aspect of it but we were um deeply involved and continue to be involved with that client in terms of when they do um get uh featured in in the stores across the US so um we've done everything from um just Regional distribution where they're like okay we're going to have our product only in the northwest or Southeast or um whatever re the Midwest region to um now we're actually currently working on a distribution of their pumpkin cream pie oh my God which will be in stores in mid September so um there's a lot of little weird nuances to it um that you might mon Loop your uh PR agency into um specifically that when they say that it's going to be on shelf uh it usually takes about a week for them to actually be on shelf so if your agency's working with influencers or with members of the media who want to go Discover it it takes a little while and it's super super super important to work with influencers who are willing to do that kind of Discovery post where they can tell people where your product is located because I'm sure you know Costco is like distracting and just filled with so many different things so sometimes your product you mean where it's loc where your product is located not meaning Costco you mean where inside Costco AB absolutely yeah it's it's hard and if you're doing a frozen good I mean there's usually like three four aisles of Frozen Goods if you're in the the stable shelf I mean you have several aisles to to work with there and then um if you're doing um you the refrigerator section those are usually the end caps of the of the fresh section in the open freezers where you have like all of these dessert products so um you really have to be able to tell people specifically where to go does that vary by by store Sarah or are they consistent across the board generally they're consistent um but there are still nuances to everything but um what we've done is we've been able to work with influencers really early because it sells out right and that's the other problem it's getting your influencers to go to the store to discover the product when you know the product is actually on the Shelf um is just a it's you got to be really careful with your timing the first time we launched in Costco for a brand was in the middle of the pandemic like literally lockdown right and so we do a lot of trade relationships with influencers so people are willing to take a product and in exchange for post as opposed to paying for them we do do paying stuff too um and I can give you some tips on that one the the trade ones though what we did was we pitched people and they said well I don't have a membership to Costco and we said oh well we can fix that and so we would buy them me we would say all right we're going to send you a $60 gift card for Costco but you got to go promise to buy the product so we're paying for your membership plus some and you get the product and people were ecstatic about that they love Costco and that idea of having a quote unquote free membership was fantastic I love that did they live up to the deal do they go buy the product Oh 100% I mean like and people like want to work with that another trick and the people that you should be reaching out to is there are specific Costco influencers there are influencers who literally only write about Costco products yeah they usually pay for play but it's a worthy investment because some of them um not all of them actually get picked up by traditional PR as well we worked with one influencer over a season who every time they highlighted a new flavor of the product we were working with which is called pots and Co it's a very decadent dessert their articles would be picked up by MSN um eater um like all sorts of other Publications because they were followed by those Publications and they were literally write a story like oh our favorite influencer just found this so it was like extra PR that is brilliant like this whole idea about the influencers I hear that and those horror stories about you need to thread the line very carefully with them and I love to hear more about that because yeah if your product sells out you're wasting your investment which is great yeah our prod sell out but you don't want that either because you're spending a ton of resources into getting people there and ask them you know things like you know are you going to be able to do the sampling cuz for literally for like two years they stopped sampling because of covid but sampling is back now yep and people love sampling yeah we are Costco people like Lois and I we love Costco and since we we buy some stuff for the cookies there so we go all the time I think a lot of it comes down and this is true of all retailers when you're starting you want like the Fantastic numbers they know and you know that having the founder there looking is it everything okay getting a relationship with the manager getting to see hey can I get an end capap all of those things they really build relationship so they know that they know that you're are accelerating yourselves if you will by doing all of those things but those first numbers are super important and I think that the most important lesson that we've taken out of all of this is that as a Founder there's some things that you don't get to delegate at the end of the day it says to these people the say the Costco store manager you are important to us like we're very aware of the power that this our success in these story holds for for a company so you need to be I think very humble in your approach and not say hey here we are here we come but really treat it as the opportunity that it is because they know they are very aware that is an opportunity for you yeah and definitely you know if you have PR dollars that you have been reserving for a special project I would 100% put those behind this um and that way you know that it's going to be like it flies off the shelves then Costco is going to come back to you and go oh well let's put you in the Northwest and see what happens absolutely yeah we're super scared because you need to Trad the needle in so many different things and I guess also be willing to learn because this is the most complicated part one of the things that we can leverage for a company for instance is that hey we have a significant uh database of people who know us we can segment that by regions or whatever we also have a significant investment in social media so is very easy to add to our Facebook ads hey we're launching in the Southeast so instead of spending in the whole country we're going to make sure that we only spend five 10 miles away from this and this and this and this SI codes which are the right one you can be that granular and I would say that it's very attractive as well to really talk about what you can do and it's very easy to just add to our hey find us on wonder.com you can also say find us at Cusco now and be very intentional about that so that's attractive because it's not it's not direct spent on samples on discounts or what have you but it's also something that is beneficial to what you're doing so we think that there's a big opportunity there but to your point about PR I would say that that is the one thing that is the mistake that a lot of Brands make when they go there and because you think that every you go to ccool and the first thing that you do as a consumer is oh my God everything here sells out is insane I I was here last week and I saw this uh I don't know vacuum cleaner and I I came back and they're out a lot of people have the idea that just by virtue of being in the store things are going to sell themselves and I don't think that anything can be further from the truth it's a lot of effort like the first part is getting there and then there's a lot of work to staying there that I think a lot of people don't really appreciate would this be your first like kind of step into National Distribution in a brick and mortar yes oh okay yeah this is you don't mess this some one up I know you've talked previously on this podcast about how in many ways you think the story behind your brand is more important than actually the the taste of the cookies uh in terms of developing an audience and and and selling the cookies do you think that's true in your approach with Costco as well do you think they care about your story more than they do about the cookie I've been talking to a lot of retailers and people in the industry about this and the play say you are in your teres you are an Oreo person you're going to keep buying Oreo you're not going to change probably you're going to test something else new sure but you are on your way like if you are a a better example of this is Coke or Pepsi if you're a Pepsi person and you're in your teries you're locked it's very unlikely they're going to change so the people that we need to talk to and this is what retailers are interesting are the younger consumers who are in the middle of a transition who are just graduating from college they just getting married they used to have like whatever Brands they got in college but now they have a little bit more money they're man doing their own groceries they're actually going Costco is a good example now they go to Costco instead of just the whatever Bodega or whatever you call the store near you and these are the people that you can convert so the problem with Legacy Brands is not that they is not that Legacy brands are not appealing and they're not good the thing is that Legacy Brands by Design were made to appeal to a certain audience and that audience grows so at some point there saturation so the people they are interested in the people who are starting to get their fooing in and they want to say hey you can find this amazing brand here you have can find all the Innovation that you want here all of these new brands and the reality is that for JY who are what all under 30 like roughly under 30 and are just getting all of these customs in place like what dishwasher detergent do I use do I buy the private label do I or do I splur for tithe they are getting into that and these are the people you're talking to and these people are interested in this does Costco will they provide you with their demographics because um I I have a specific vision of what the demographics are for the traditional Costco customer and it's definitely going to lean older established people with lots of the schoolage children so people that are already set so that also might play into your what product you decide I would also make sure that you ask about their flyer that they send to every member oh absolutely with the Costco member savings so if you can get featured in there that's only going to help you as well no yeah absolutely what I'm thinking is this if you are in your 40s and you never got a Costco membership it's very unlikely that you will for many reasons you just don't shop there so the people the new the funnel is younger people and of course the demographic ke older but the ones they are interested in attracting that the ones that make sense for their own acquisition strategy are younger which is the same for younger Brands y it's not that the older people are not going to try your stuff it's just that they are a harder sell because they have their cookie brand that they have been enjoying for 20 years so they will try it once but it's very unlikely that you will convert them where the new ones who are still excited because we all did it like oh my God the 50 hot dog there's a time when it's new to you and it's exciting and you cannot go to Costco and get one when you are new to Costco in the sense that you used to go with your parents when you were a kid but now you have your own membership and you're going to Costco and don't you know you buy all the stuff and you get super excited that oh my God look at this it's like $40 for 150 pots of detergent that is the people that are being drawn in by the new brands the older customers they don't need Innovation they need their Staples to be there for them right so Hans when you meet with them do you pitch the story first or the flavor first uh they're kind of aware of the product itself we are sending samples to them they're aware that they're cookies I really hope I'm right but I think it's a lot a lot about not only the story but the many ways that we have been able to leverage the story because I would say for a retailer is it's interesting oh this product got on the Today Show this product got on the Oscars gift bags and got a lot of press out of that they're doing celebrity collaborations they have this uh thing going on for South by Southwest so that's also interesting for them because at the end of the day any PR thing that you do will benefit you and the retailer if you do right i' like to see you on airplanes you know how STP waffle and biscoffs have taken over every airplane we are on that we have a meeting next week actually about I'm not going to say which airline are going to CH it but they love the cookies now that's a Discovery Space I mean my family has become um Aid fans of the STP waffle because of that absolutely and I think that that that is super important I mean we haven't gotten to priz discussions but I'm pretty sure that that is not going to be profitable in any meaningful way no but the amount of people that will have nothing to do for a couple hours and we'll take the time of reading your packaging from top to bottom is priceless so yeah that is a gigantic a gigantic opportunity how about the pricing with Costco Hans are you concerned that they're going to squeeze your margins um more than you'll be comfortable with nope actually the margins with Costco the interesting thing about Costco is like the the margins are probably a little bit lower because the price is a bit lower but most of what they do is they they don't squeeze you on the margin and keep it for themselves they squeeze you on the margin and transfer it to Consumers well you're still getting squeezed on the margin though yeah but at a bigger volume right and another thing that is super important for Costco compared to say um Walmart is that their cash cycle is way shorter the terms are way more favorable so the volumes are good like the the volumes are significant which in turns allow me to go to my co- Packer and negotiate better better terms but also the cash cycle is in weeks not in months so that's really that's really a factor to consider like Walmart can very easily give you 180 days terms and you're probably going to take them but the amount of Financial Muscle you need to do that is a lot compared to a three four five six week cash cycle are you concerned about what happens if you're successful and they want to do something are you ready to supply them in the quantities that they would want I'm getting ready I'm not ready yet and I don't realistically like this is exciting that we're talking to them and that we're really building a strategy around this but realistically we're looking at a Mother's Day maybe Easter launch if we get there so we are preparing for that and we're having all of the conversations in all the other places as well because yeah they are excited about what we're doing but we don't have anything in the bag just yet so we're actually betting Partners right now for Co manufacturing let's take a quick break to hear from our sponsor I'm here with Rob Levan co-founder of work better now which provides top remote Talent from Latin America and the Caribbean Rob I gather you found that businesses are using your remote workers in ways you weren't expecting can you tell us about that yeah it's a great Point Lauren uh initially wbn was providing personal and executive assistance for business owners who understand that their time is better spent on impactful items like increasing Revenue improving the customer experience and improving company culture they were drowning an admin and we initially were focused on saving them time we're still doing a lot of that but then we saw that some of our clients were hiring four five six people from work better now wow what are they having them do you know they're putting him in a very wide range of roles things like project management bookkeeping marketing and customer service stuff like that and we're actually helping them build out their departments with our talent now we're recruiting and attracting top talent for those roles as well what does using wbn cost for $1900 a month you get a dedicated full full time work better now assistant you can have a matched assistant who is perfect for your needs within 2 weeks and there are no contracts and if you mention 21 hats when you are having your free consult you get $150 off your first 3 months and that is for each assistant that you hire where can we learn more workb better now.com thanks Rob and we're back is that why you're simultaneously working on uh fundraising is that what needs to happen in order for you to Service Costco the way you would like to absolutely because probably we're going to start with a few stores that is very likely let's do the five stores in the four I think we have in Austin that is manageable sure we can do that we can even go to every single one and check on them every single day we need to the problem comes if you are successful they're going to say we love this we want it in the whole Southwest we want it in the whole country and if it is a success story as we hope it will and I think we have really prepared for it to be a success story then you need to move very fast and that is like the volumes are insane like we're talking millions of dollars that someone needs to finance so we're that's why we're doing fundraising because the amount of working capital no matter how favorable this cycle is it is an insane amount of money so we do need that and your approach to fundraising you have some kind of crowd fund fing raise going can you tell us about that yeah um we're raising a million dollars in Republic It's called Equity craft funding is regulated by SEC and basically what you do is you file with your financials uh through Republic they keep a commission on how much you race and what you issue are called crowd saves so there's an unlimited number of people that can have the crowd safe but they set it up not as exctly as a trust but basically Republic itself becomes a representative so the cap table has just one name and whenever they need to vote for instance if it came to that because they converted they vote as a single entity so you don't have to deal with because you can you can Inver 100 $150 so you don't have to deal with a thousand investors directly we just need to have one line in the cap table and the beauty of that particularly for Consumer products is that we already have a ton of people in engag with what we're doing and we're actually owning proper ownership in our company one and two we really think that this is gonna blow up we're trying to make this into a fullblown unicorn so the fact that you can share that with people who are actually outside of Angel Investing and that type of thing is very exciting I think for both sides of the question because these are the people who are then going to become your ambassadors if you will so if somebody wants to invest in this where do they go they go to the Republic website is republic.com look for wonder you can even pay with a credit card do you ever pinch yourself about this like that you're like I have a cookie that could be you know this incredibly large business that blows up nationally because of whatever opportunities you have in the Horizon it's it's so funny because you say it's a saturated Market but I think part of it is that it's stale you know we've been seeing the same brands of cookies on shelves for so long abely you know what I'm amazed that we've built it into what it is and to be completely honest with you like last year we turned down $3 million three you turned down $3 million from an investor uh an individual or a firm it was a private Equity Firm it was not the right partner and we said no because at that point we didn't need the money we didn't have anything to do with the money we can take $3 million but what are we going to do with that and he was not the right partner for many reasons and we said no and for a long it was like oh my God we should have taken that money that would have made our life so much easier but you know what Sarah to your question I think that now when we everything is kind of coming together and we're building it and we're so excited about where we're building it and The credibility that we bu to our business we have gone through a lot and for a long time for say from October to March of this year we were not sure that our business was viable like we really cons we really had to consider is this a viable business and the answer was not in the way that it exists so you need to shift but I think that the fact that well the fact that we didn't take that money and the fact that we had to go through that period where things were very shaky where we didn't know if we were going to make it it's made us better people and more appreciative of the opportunities that come around where would you see yourself in 5 years I'm just curious about your the trajectory that you're you're hoping for I would like for wund to be spoken of in the same sentences as orio that is a long game but I definitely see myself operating a company still it's a very different product you're talking about absolutely it's interesting that you would pick that one out because that is that when you think of cookie Oreo is the cookie sure that is the dominant brand going back to your uh crowdfunding you you mentioned you're going after smaller investors with this is this more about raising capital for you to invest or is it about is it really a marketing strategy to get customers invested quote unquote in your product uh no definitely it's more about a capital we do need a capital in order to grow is this one of those plans where you have to hit a certain threshold before you actually get the capital do you get it in trenches um but the threshold is $25,000 something like that so yeah there is a threshold but it's a very small one and you said you're hoping to raise a total of a million dollars this way yes how are you getting a word out about that opportunity to invest uh we're talking to a lot of places like this we're doing PR a PR Outreach we're getting ourselves in a few newsletters that are relevant to that we are using our own database because we have 250,000 people in there there's many different places or actually when I'm done here I'm heading to a meeting exactly about that so a lot of it has to do with presenting yourself as capable that you know what you're doing what your plan is and because most of the people who are in these are people who are excited and actually a BC once recommended this to me if you want to understand how BC and Angels work go into Republic and invest a little in something and the thing is this Republic is built I think they have like a million plus investors that are on the platform looking for deals and this is people who may not have the capital to make a $100,000 Angel check but they are very invested in the process because they're hoping that one day they will get to the point where they can actually do the angel checks so it is a lot about selling the vision to these people who are already sold on the idea of crowd funding so what does a small investor get if somebody pulls out a credit card and invests $150 or more in Wonder kcks uh what do they own we're using a valuation cap of $20 million so they will get $150 divided by $20 million and that is the percentage of the company they will own when they convert it is a safe note so it is not technically stock it will convert into stock the moment that we have a price round so when we raise a series a then it converts I see how either you ever invested in one of these type of Republic opportunities yourselves no I haven't because they they don't allow me before because I am not American Lauren how's your portfolio uh I'm a kind of an index fun guy Sarah so no I've done some I mean i' I've definitely researched it um not just for investing in making money out of it but also finding cool companies you know cuz we we we work with you know established brand Brands but there is always someone with a great idea like you who just getting started um in terms of their growth phase and that's a great place for us to find those innovators and and people that we can reach out to and say all right we see that you're doing crowdfunding but yeah we see no press about you so let's talk that's very clever yeah so once in a while I look through them um I wish I had more time to do it but uh Republic is not one I've heard of but I've heard there's a whole bunch of other ones that I follow we're running a little short on time I want to ask Sarah about a reader comment we got but before I do that just one last thing Hans could you give us a sense of what are you hoping to get out of that initial meeting with Costco I'm sure we'll be asking you about this after it happens what would be uh a success for that meeting well an Loi will be amazing because I have a few investors who are bring me an Loi from a retailer Eminem So that would be great but I don't think that's going to happen in the first meeting but I would love to get from them is like their perspective on the industry that what's happening in the industry and ideally because we are very malleable in what we can do we can do a lot of different products like cookies is where we've been and what we're known from we can manage the sizes we can do the cookie we can do a ton of things so what I would like to do is to say hey how can I help you round out your portfolio hopefully that will be the spirit of this meeting all right Sarah I want to ask you were on I guess a couple of weeks ago and you you talked about the frustration of preparing elaborate pitches for potential clients and occasionally uh or sometimes more than occasionally having those clients just ghost you not have the courtesy to even tell you that they're going somewhere else we got an interesting response from a listener Buzz Park of Lightyear Management Group uh he wrote in I could directly relate to Sarah's dilemma with companies ghosting her after a pitch as Sarah mentioned preparing a proposal for uh a prospect is fairly costly and the post pitch ghosting can be quite frustrating I was a marketing consultant for over 10 years and a few years ago at the recommendation of some peers I started charging for my proposals if a company wanted me to look at their marketing plan and come up with a strategy or ad campaign I would charge a minimum of $1,500 for the proposal and that amount would be credited towards my services if I won the contract my reasoning was that if a company was serious about evaluating my services they would understand the value of the proposal and would be willing to pay one or more agencies Consultants to pitch them uh this worked very well for me what do you think of that Sarah I think it's a fantastic idea and my response is I don't know that an agency of my size is the right agency to start that right to start that in the sense that this is not something that happens a lot in your industry oh never PR agencies don't charge for U proposals but like if some of the the Goliath agencies that are out there started putting that in into their how they do things it would be a lot easier for the smaller agencies to do the same but I don't know that it's something that a small agency it would be in my best interest to start that that said um you know never say never it may be a all right I can give you I can see this I can see I will give you a standard proposal which will talk through all the things that we you know generally do for our clients and our capabilities and tell you all about our our favorite colors or option b we will put together um campaign ideas with specifics as well as you know recommended influencers in media and timing and all that kind of stuff but that will cost you $1,500 or whatever it is um so I could see it as kind of giving a menu of options for potential clients but right now the current space is if they go out to five agencies and say Hey can I have a proposal of working for us and only one of them says my agency says oh well we charge for that they're probably not going to ask us to do the proposal or they might have more respect for you you know I I'm sure you're right in many if not most situations but I I'm also sure a few would understand and respect it Hans how about you as a consumer Hans of uh PR Services would you consider paying somebody to prepare a proposal for you yeah I guess that you have you have to have like a very strong reputation but absolutely at the end of the day I think that speaks of conf confidence to what you're doing I know so I don't know it's a it's a tricky one I was reminded when I was doing wedding case because they wanted a tasting so I was going to I I would charge for the tasting and discounted if they actually hired us but it's the same principle yep I would say that if you have a strong enough pipeline of people who are coming to you absolutely if you have so many people getting to your wanting your services and you cannot do you know that is a good of a good way of filtering who is actually interested because a lot of times what you will get and I hate it but it happens and it's part of the game is that they send their assistant or whatever and it happens more big companies we need three pitches so I want to work with this company but I'm going to get two more pitches and two more proposals because I need to present three that will happen a lot yeah so that yeah that's what I'm one way to filter that and P I'm thinking that is less technical than in other categories so the pitch is more about you than about the product itself so I would say that I would take that into account like how specific does this pitch need to be well when we do our pitches what we'll do is usually we'll do a competitive analysis to give the give the potential client an understanding of where they fit in the current environment in ecosystem and basically kind of give them a sense of what other compal companies are like we would if we were pitching uans we would put together a proposal that had reviewed or I compared to you reviewed Biscoff compared to you and generally what I'll do is when I talk do my initial call with any potential client is I say okay tell me your three to five top competitors and or uh companies that you aspire to be similar to and we include that in our proposal and kind of walk them through and say all right this is where you are this is where PR will take you if done correctly so if you're already offering something that valuable because it is valuable then you should charge because I'll share you I'll share with you an an email a pitch that I got from a supposedly top of the top agency and I looked at it and they like they spend five minutes doing this they just type cookies where they were tomatoes used to be it happens it happens and it's more about them but if you're doing this then you say hey we're going to do we're going to charge you for this analysis on your category what it look like because that is something valuable you could very easily take the proposal and use it you say decide okay I'm not going to go with them but this is very valuable to me which seems to be the case the problem is a t of people will say oh I'm going to charge you and then they give you a copy and paste proposal which is I mean we all have to deal with our industry being full of idiots I personally also love being able to get on those calls and talk to people and say have a very firm understanding of of what their challenges and opportunities are and I can't do that if I do cookie cutter maybe having that kind of tiered approach of like yeah we'll give you kind of the Baseline but we'll also give you we also have this awesome tool um that lets us look at the Twitter accounts of all of your competitors and tell you all the reporters that are following those competitors cuz Twitter as you know is like the the main form of communications for a lot of journalists so if they follow you on Twitter they're relatively interested in in invested in your brand so we'll we will do that generally when we pull out when we start building media list for our clients that's like step one who's following their competitors and um get them to start following you oh I love that from my perspective as someone who is going to be looking for one a an agency soon we should talk talk by the way is that a lot of them want to lock you in and this think very fair to say hey the first thing that we do is here's our proposal and the first thing that we'll do is going to be this doing this competitive analysis and that will cost $1,000 if you want to keep working with us for 6 months this is a retainer but you can also say hey yeah this is useful not thank you or whatever so it's a so you can offer a little tid bit of it because it also allows I guess to say people who are not ready to take the plunge but want like in my case I'm not ready to hire a PR agency but I would love to get the Insight from a PR agency you see that's the thing is that and that's what some people do is they say oh yeah we're going to hire a PR agency they go out all these agencies and get proposals and then theyd have no intention of of hiring a PR agency uh the stories that um I could tell you from other people that have experienced that where then they've had their ideas stolen and repurposed it's it's a problem in the industry that I think that we're all trying to to to solve I don't know Sarah sounds to me like you might have found your first test case I know I might do it all right my thanks to Sarah seagull and Hans sh and to our sponsor work better now and Hans best of luck in that meeting with Costco we'll be eager to hear about it thank you I'll keep you post to knock it out of the park wait wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's L ren21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think he can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess Theron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]