John Jantsch: For national companies trying to infiltrate the local market the community organizations may be the best and last frontier. On this episode of the Duct Tape Marketing podcast, I speak with Megan Hannay. She is the co-founder and CEO of ZipSprout dot com that is doing a very innovative take on helping organizations wherever they are matched with local nonprofit and community organizations as a way to create marketing partnerships, a very, very innovative approach, check it out. Hello and welcome to another episode of the Duct Tape Marketing podcast. This is John Jantsch and my guest today is Megan Hannay. She is the co-founder and CEO of ZipSprout dot com. Megan, thanks for joining us.
Megan Hannay: Yeah, thank you for having me. You got my last name right on the first try, which not everyone does. That’s many points for you.
John: Years of doing this, this was an easy one.
John: Right off the bat, tell us what ZipSprout is.
Megan: Sure, we are an agency although we have some tech components as well. We work to match our clients who are businesses, sometimes they’re local regional businesses and sometimes they’re national brands or international brands. We connect them with local sponsorship opportunities in cities across the US and Canada. We help match them with nonprofits, events and associations that they can sponsor and reap marketing benefits on the local end.
John: I want to get into the process, you know exactly how that works because I think it’s a pretty innovative approach to marketing or calling yourself an agency. I’m curious, what was the genesis of the idea? Were you sitting around one day saying what’s kind of a cool new innovative way we can actually go to market? Was there a nonprofit that you did this for and went, hey this is an idea?
Megan: Yeah, actually the impetus for ZipSprout came from the agency side. I was working for ZipSprout’s parent company which is a company called Citation Labs. We were doing local sponsorships as a marketing effort for a client. Basically we just had this idea for a client like hey, what if you did local sponsorships in some cities that you’re trying to get attention in. I took on that project. It was so interesting. We started in San Diego and just speaking to all the local organizations in San Diego and how eager so many people were, I felt like yeah, I’ll take a business sponsor, hey I’ll work with you.
People were very eager, they were very flexible and they were just fun to work with. I worked with [Garret French 00:03:04] who is the CEO of Citation Labs and we were like this could be a lot bigger. That was December of 2015, November, December and around March of 2016 we hired a few people to help build out ZipSprout to do more cities so it would available for more clients and it’s just been growth since then. Yeah, it started as a project that we realized once we got into it, there was so much more in that space and no one was really doing quite what we were doing that we could find. We just got excited about it.
John: I have actually written about this as a marketing tactic in my first two books. Not obviously the platform that you built but just this idea of the implied referral of getting involved with a community organization and the fact that you run a special and promote that nonprofit, they have a real, great motivation to promote you and your products to their boards and volunteers and donors. Not in a way that’s taking advantage of look at me, I’m doing good work, it’s just such a great kind of win win.
Megan: Yeah, actually the thing is like you said I don’t think the idea of doing sponsorships is a new idea at all. I can’t take credit for that. I think a lot of times when especially larger companies try to do local sponsorships it just becomes difficult when they’re trying to scale it. There’s so many organizations to get in touch with and so many details to worry about that I think sometimes even the companies that are doing it don’t always do it the best way or don’t really find great ways to work with local organizations. I agree, I think it can be a way that’s a win win for both the local organization and the business as well. It’s definitely not a way of trying to take advantage of local organizations. We talked to a lot of organizations that are actually very eager for business sponsors especially because for them it’s just another way to earn revenue, to help do local good.
John: I always found because I used to do this with all of my clients, I always found that the best sponsorships were really partnerships. That it wasn’t just like here’s somebody we can give some money to and put our name on. It was like how can we help their mission, how can we get involved in their events, how can we create volunteer opportunities. Are you able in a sort of platform approach if you will, are you able to kind of really go deep enough to know who the two players are that you’re partnering?
Megan: Yeah, it really depends on the client. We’ve done things that are more big picture with some clients. Then we have some clients that really want to go more detailed like you’re talking about. We’re working with one client, it hasn’t launched yet so I can’t mention the client but they’re opening, they’re doing some grand opening of stores in a couple of towns, it’s actually reopening. The store closed and it’s now reopening. They wanted to build a lot of buzz around it. In their grand reopenings they wanted to give some of the profit from this event, the grand reopening event to a local nonprofit. In our work to find them local sponsorships we also looked for a particular local nonprofit in the very close area of some of these stores that really matched with their target demographics and really would be just a great recipient of these funds.
We’re kind of building that relationship for them in addition to finding some regular sponsorship opportunities. It’s worked out really well. For them, it’s like a lot of these stores, they’re brick and mortar stores so they do get people coming in a lot saying hey, will you sponsor our organization. It’s not like they don’t have anyone to sponsor. For them it’s often because they’re getting people coming to them, they don’t see the whole big picture of the community. There might be some great organizations who just aren’t thinking of coming to them, who might be right down the street who they may never have heard of and not know to donate to. We’re kind of able to get that big picture look and say hey, these guys over here are actually just a perfect match for you.
John: Do you have, I’m going to call them local scouts in some fashion in those cities? Nonprofit landscape is sort of a political landmine and you kind of have to know who’s who and what’s what. How do you kind of figure out the lay of the land in a local community?
Megan: Sure, yeah well we’re getting there. I would definitely say that’s true. We found that every city has its own personality when it comes to organizations. We’re all based out of one area. The team is all based out of Raleigh Durham, North Carolina where I am. We have match makers. The team of match makers, basically their job every month or every few months, a match maker takes on a new location and does just kind of outreach to as many local organizations as we can find in that location.
We do emails. We do phone calls. With all of our matches we establish a relationship ourselves before we match them with a client. We’re getting in touch with organizations. We’re talking to them about sponsorships and what kind of sponsorships they have and would they be interested in working with this particular client, if all is good then we match them. We don’t have on the ground people yet. It’s something that Garrett and I have talked about and we’re like it would be so cool to have a person in each city. I also as a manager of a team, as a head of a company I love having all of my team members where I can meet with them frequently. I think that’s just a really important part of being co workers and on a team is that you’re getting some face time with each other. That’s the direction that we went in.
John: Maybe explain the whole process in a kind of a succinct way then. Let’s say I come to you and I say I’m opening three stores in these towns. We think that partnering with some folks locally would be a good thing to do, help us out.
Megan: Sure, so yeah first of all we would kind of spend a lot of time talking to you. What are the people that you want to get into your store? What is your target group that you’re trying to reach? What are some of your interests as a company? Do you already have, some companies already have passion areas where they do a lot of giving already for certain causes. If a company has those we’re like hey, let’s build that up, let’s pursue that, let’s make that bigger but locally and find some organizations that are tied to that cause. Once we know exactly what you’re looking for and also the benefits of sponsorship that you’re looking for, some companies want a lot of in person things. Some companies want just more digital sponsorships.
Once we know all that information, that’s when we do our research. We go into a city. We look for as many local organizations as we can find, we often just use Google saying okay, who’s here. Then we outreach to like I said, everyone that we can find in that local city. We will place a phone call, we’ll send an email, getting in touch with these local organizations and then talk to a lot of people. The match makers talk to dozens of people a day, just finding out who the local organizations are in a particular city.
Then based on what our particular client is looking for in that area, they put some of them in a list that we present to the client and say hey, these are the organizations of all the ones that we talked to that we really think are the best fit for you. This is the sponsorship that we really think that you should do. Then the client looks it over, they say yeah, this one looks good, this one looks good, maybe not this one so much. Then we go back and facilitate the sponsorship and tell the organization hey, this company wants to sponsor you and make sure it happens from there.
John: Where do you find that this type of tactic fits into the marketing mix? Do you have agencies coming to you? Do you have the PR department of an organization coming to you? Where do people kind of put this?
Megan: Yeah so we started out in the local search space. I think a lot of times it will be at the beginning especially it’s people that are in the [SEO 00:11:13] space that are coming to us that are like you can help us really get recognition in the local area for our search traffic.
John: That might lead to local back links or something.
Megan: Yeah, exactly. I think also as we’ve grown, we’re getting people like I said in franchises or we work with start ups that are launching in a particular area, people who are kind of wanting to build attention for their product or service or store in a particular area that they kind of want to make splash at one particular time. I think that can be a good thing for us. You’re coming into this city brand new, we can help you build these relationships that you can then sustain year over year over year. Yeah, I would say that those would be the big ones. Then we also do have some agencies that come to us as well. We always tell people we don’t exactly white label but we can definitely work with agencies and try to allow agencies to manage their own clients as much as they want to and we can just work with them however they see fit.
John: I recall that you were a finalist in the street fighter local [inaudible 00:12:22] and I have a confession, do you know what that confession is?
John: I was a judge.
Megan: No way, wow, okay.
John: I remember reading the application, I must admit there were lots of them. I remember being impressed with the fact that it was a very innovative approach. At that time you really were positioning it more as a kind of local SEO play I think almost.
Megan: Yeah and that’s what we grew out of. I appreciate just being nominated honestly I was so excited to be just to get the nomination, so thank you.
John: Tell me, do you have a couple favorite examples where this has just really been a home run for somebody?
Megan: Yeah of ZipSprout in particular or just local sponsorships in general?
John: Yeah, one of your clients where this has really made an impact.
Megan: Sure, yeah we’re working actually on a case study. We haven’t completely released it yet. We’re working with a company called closet box dot com in Chicago. I’m so excited about everything we’ve been able to do. This has kind of been our perfect, like we’re building it ourselves sponsorship program. We’ve been able to, they were launching their services in Chicago. They have a particular demographic that they’re looking for which is people who are homeowners between certain age ranges. We’re able to find about ten local sponsorship opportunities that really fit for them. Then we did a lot with just kind of maximizing every benefit of sponsorship possible.
We worked with organizations who were giving out social media shout outs, email newsletter mentions, giving out coupons at events, that kind of thing. We made sure that every single time that closet box was being mentioned as a sponsor, we weren’t just having the brand be mentioned but we were including a coupon code, we were including a link to an article that was about moving within Chicago. It was specifically addressed to people who live in Chicago. We are making sure in every way that when closet box is mentioned as a sponsor, we’re really maximizing their marketing potential as well. It’s been awesome so far. Seeing the emails come in and seeing the coupon codes go out and all of that happen in Chicago has been pretty exciting.
John: Do you play a role in defining that or do clients sometimes come to you with hey, here’s our performance metrics for this sponsorship?
Megan: Yeah, it can depend. I’ve done a lot in terms of trying to help clients see the maximum potential of every sponsorship and saying hey, can you send me coupon codes, is that a possibility. Can your team write a blog post for this city? I think a lot of times clients come to us and they’re like we know local sponsorships are cool and maybe they can help our search presence and we’re not quite sure what else is in there. I’m like okay, here’s the idea. Here is what you can really do. I try to set goals for us so that our clients can see the value of what we’re doing and so they continue hiring us.
John: Okay, so let’s get down to the really hard part. How do they pay for ZipSprout?
Megan: Yeah, so our clients pay us fees over and above the cost of sponsorships. That’s something that I really like about ZipSprout as well. I think there are a lot of companies out there that work for the nonprofits but then they charge nonprofits to find them sponsors. We charge our clients. We really push it, it is a marketing effort on behalf of the clients so they pay us additional amounts on top of the sponsorships. That way, when we’re coming to these local organizations it’s a really easy connection for them. It’s like hey this is free for you and we’re finding you a sponsor.
John: We found you some money, do you want it?
Megan: Yeah, exactly. That way it really lessens the friction. I think if we were charging local organizations, first of all I would just kind of feel weird about it. Also, I think it would just be a lot harder to get the right matches because a lot of people would be like no, I don’t really want to pay you. It really works the best for us when we’re charging our clients.
John: Is that sort of an engagement fee or a percent fee, how do you factor that?
Megan: Sure, it’s per opportunity a lot of the times. We have a flat rate per local opportunity that we find for a particular client. Sometimes if they’re working at a certain scale, we’ll just charge a flat fee for if you want local sponsorships in Philadelphia and you want a bunch of them, you can pay us this flat rate and we’ll do all the research for you. We’ll come up with a list for you and then from that list you can choose. It kind of depends on, we’ve varied it a lot with different clients for what works for particular clients, what works for us. It’s definitely still a lot of times working on our pricing model but yeah we are always paid over and above the cost of sponsorship.
John: What’s the hardest thing about being a co founder and CEO of a start up?
Megan: Goodness, I would say the hardest thing is knowing where to focus your attention when you still have a small team. For me, I do a lot of the management of the team, the day to day, which is probably more of the COO role technically. I kind of am a CEO and a COO because I do also things like this, like being on your podcast. In any given day it’s like well I could write that blog post that could probably generate us traffic or I could spend some time digging into the numbers to figure out how to make us more efficient, which would save us money. It’s like this constant pull of where to draw my attention, where to push myself. It feels like there’s always something else you could be doing I would say is the hardest part.
John: With a small company you got to take the trash out too.
John: Speaking of focus, what’s the future hold? Are you going to try to get a bigger footprint in a number of cities? Do you feel like maybe you can take this concept and start saying okay, what else can we do with the partnerships that we’ve developed?
Megan: Yeah so as far as cities, we actually have found that pretty much anywhere in the US and Canada a client wants us to go, we’re able to go. We have a lot of flexibility there. I would say the future really is kind of the latter we’re building up what it means to be a local sponsor. I think like I said, we started off on a local search space. I think a lot of our initial clients were like you can help our rankings. I think that’s big but I really want to infiltrate other market places. I want to get ZipSprout in front of people who are in charge of branding, who are in charge of PR and really show what local sponsorships can do for those area. I think they have just as much power even if you don’t really care about your rankings or if that’s not a primary concern for you.
John: Well Megan, I appreciate you taking the time to stop by and tell us about ZipSprout. Hopefully we’ll run into you out there in one of those local cities soon.
Megan: Yeah, John thank you so much for having me. I really appreciate it.
John: Thanks for listening to this episode of the Duct Tape Marketing podcast. I wonder if you could do me a favor. Could you leave an honest review on iTunes? Your ratings and reviews really help and I promise, I read each and every one. Thanks.