The startup stage was defined by selling single-episode ads to individual sponsors. My goal during that stage was to acquire data, not make money. With data in hand, I felt confident to move to the next stage of ad sales: revenue growth.
I hired Sachit Gupta, a business development consultant, who helped me realize that my reputation was strong enough for companies to invest in long-term relationships with my audience. Before I started working with Sachit, my sponsors were companies with relatively low-cost products. They needed to acquire a lot of new customers to make the ads worthwhile.
To increase my ad rates, Sachit suggested going after businesses with high customer lifetime values (LTV). That meant they only needed a few new customers to be profitable, and they’d be willing to spend more to acquire them.
A good example of a high LTV sponsor is Toptal, which helps businesses hire top developers and other professionals. Though prices start low, it’s not uncommon for a Toptal client to spend tens of thousands of dollars per year on developers. Customers don’t make that kind of decision after just one ad. It took time and repeated exposure to Toptal ads. Sachit realized that based on my reputation, Toptal would be willing to invest in a long relationship and multiple ads.
He was right. His insight took our sponsorship revenue from under $50K annually to over $200K within a year. He doubled it the following year and kept growing it by working with sponsors that earned more from their customers by establishing longer relationships with them.