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Advertising on social media is uncharted territory for many small business owners, and building the most effective strategy is even more so. Helping navigate this great unknown is Michael Koral and his co-founders. Their company cleverly creates, targets and optimizes advertising campaigns for small businesses across Facebook, Twitter and Instagram.
We chatted with Michael recently to hear the story of how they came up for the idea for their business, his key strategies for hiring and the biggest lesson he's learned about pricing.
Name: Michael Koral
Business: Needls
Started: March 2014
How did you create your awesome job?
I worked at a large corporation after college and hated it. I quit after a couple of years, traveled around Europe for six weeks and tried to figure out my next move.
I’ve always had an entrepreneurial spirit and I wanted to be my own boss. Two of my friends from childhood, Jeremy Koven and Justin Hartzman, had started a web design company called All You Can Eat Internet and a website brokerage firm, WeSellYourSite.com. Around 2009, I knew they were having some challenges and I talked with them about working together. We make a good fit!
We stumbled on the idea for Needls while trying to drum up more business for those first two companies. We were browsing social media sites looking for people who said they needed to build a website and then we reached out to them. That’s when we thought about writing a script to monitor social media for us.
Turns out, we gained a ton more business from doing just that. We knew that if it worked for us, it could work for others as well.
We’re a medium that’s overlaid onto Facebook, Instagram and Twitter using their own advertising platforms. Let’s say we have a real estate agent as a client and someone posts they are looking to "sell their house." We advertise the real estate agent’s business to that person and anyone else in a similar situation.
When did you know your business was going to work?
When we used our own platform to find ourselves more customers and it worked! That’s when we knew we had something.
That was a year and a half ago and it’s been working ever since.
What has been the biggest surprise so far after starting your own business?
The biggest surprise has been managing the human resources aspect of growing a company. We’d never done it before and it was challenging to do it the right way and hire the right people. We’ve improved by implementing an interview process, because initially we simply grabbed a Q&A template from the web.
Now, we hire more slowly and we have a process that qualifies new staff. We interview as many people as we need to until we find the right person.
If they don’t work out, we let them go them quickly because we don’t want dead weight on our team. We understand it will take even longer to replace them, but having the wrong person can make for a cancerous environment.
We have a great, motivated team with a similar culture, mindset and attitude toward work.
How do you price your services?
We’re an open book. It costs $100 per month to access our platform. Small businesses then need a budget of $50 per week to advertise on the social media platforms. So, that’s a cost of $300 a month, plus up to 10% of their ad spend or profit made on advertising.
Our average clients pay $175 per week or $600 per month, plus the $100 platform fee. It’s all month-to-month. Clients can sign up for one month and cancel the next month with no harm, no foul. We wanted to make sure we weren’t a huge expense because the advertising budget is the first item to go when business is down.
The biggest lesson we learned was to make our pricing transparent. Initially, we noted that customers also paid us 10% of their ad spend only in our legal terms. It wasn’t on the front page of our pricing information the way it is now, and someone questioned if there were any other fees. When we said yes, we realized they shouldn’t have to ask.
It’s important for people to know we’re genuine because they’ll trust us a heck of a lot more and we'll start the relationship off on the right foot.
Do you have a marketing trick you swear by that is 10x more effective than anything else?
People who visit our website will see a live chat box and they receive $50 in free advertising for simply saying hello. It prompts a dialog between us *and* gives them more advertising budget to work this. That tactic has helped us quite a bit.
If you could go back in time, what’s the one thing you would do differently when starting your business?
We didn’t necessarily plan a full road map for the next five years when we started. We worked month-to-month.
Looking back, we should have made a long-term strategy. All of us had experience building businesses before, so we figured we’d be able to roll with the punches. We’re a growing company that has customers and investors, but it would’ve been helpful to have a more detailed outline of what our long-term goals are.
What would you like to learn today from a community of other small business owners and self-employed professionals?
I want to know why other entrepreneurs and small business owners don't currently advertise on social media. What’s stopping you from advertising on Facebook or Twitter? What's holding you back from trying it out?
Tell us! If you aren't yet advertising on social media, is there a specific reason? What's holding you back?
Share with us in the comments below how you feel about advertising on social media, and if it's something your business has tried in the past.
We can't wait to hear your stories!
