Win-Win Point-Pricing How To – The INBOUND Series

jessica

Jessica Miller, Vice President of Services for PR 20/20, explains how her company, HubSpot’s first agency partner, builds and implements services around HubSpot’s marketing automation software. Focused on B2B clientele, the PR 20/20 team often serves as a full extension of a client’s marketing team . . . and helps its clients “think through more than just marketing.”

 

Jessica spoke at HubSpot’s Inbound 2018 and covered the details of point pricing, where PR 20/20s clients are billed for services based on the assigned point value of that service rather than paying for the time it takes PR 2020 to deliver that service. This provides value for customers and ensures that customers do not pay for PR 2020’s inefficiencies or learning. More complex, higher cost services are broken into smaller pieces, and the pricing structure is locked onto a Fibonacci sequence (1, 2, 3, 5, 8, 13 . . .) to minimize quibbling over point values.

 

Originally the company based the cost per point on the volume of services a company purchased . . . the more services purchased, the lower the cost per point The purpose was to incentivize buying a “better” package, but the reality was that it priced the “little guys” out of the market. Today, the company has a flat rate of $150 per point, regardless of whether a client purchases a Basic, a Moderate, or an Enterprise package. The “incentives” now come in the form of free enhanced services and more “hand holding” for the higher point cost service plans.

 

PR runs a number of interesting websites which may be helpful to companies and agencies.

 

Jessica can be reached on Twitter @jessica_joellen or on LinkedIn at jessicajoellenmiller/.

ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk. I am live here at HubSpot’s Inbound Conference with Jessica Miller. She’s the Vice President of Services for PR 2020 based out of Cleveland, Ohio. Welcome, Jessica.

 

JESSICA: Good morning. Thanks for having me.

 

ROB: Great to have you here. Why don’t you start off by telling us a little bit about PR 2020 and what makes PR 2020 great?

 

JESSICA: Sure, I would love to. PR 2020 is a marketing agency out of Cleveland, Ohio, like you said. We were HubSpot’s first partner, so we’ve built a lot of our services around marketing automation software and actually implementing those services.

 

What makes the agency great? I actually asked our team about this because I wanted to crowdsource it a little bit, and we got so much good feedback. It was a fun question to talk about. A lot of our team had a few themes.

 

One was the consultative nature of our business, so really getting good at listening to clients, to their competitors, to what their audience are saying, and to the industry overall – kind of synthesizing for them, thinking critically through what they might want to do with their marketing programs and then implementing it. So everything from strategy to implementation and performance.

 

Building relationships was another thing that came out of it. We’ve had some clients, some industry partners like HubSpot that we’ve been working with for 10+ years. That’s probably our favorite part of the business.

 

ROB: Interesting. HubSpot’s first agency partner. That’s a grand accolade. How did that emerge? Who became aware of HubSpot, who was passionate about it, and is that really the only platform you work with on the marketing automation side of the world?

 

JESSICA: Good question. No, that was Paul, our CEO. Our tagline is “Look beyond.” I think that’s kind of perfect. He spotted this cool software, started learning about it, and said, “Hey, this is only as good as how much and how well you use it, so let’s build services around it.”

 

With that relationship building, too, I would say the leadership at HubSpot was super important. He had I think a dinner with some of the founders from HubSpot, and from their beautiful relationship, a friendship has happened over the past 10 years. So I would say the partnership is definitely why and how it happened.

 

I’d say his visionary does lead us to work with a lot of different technologies. Right now we have a thought leadership thing on marketing AI, so artificial intelligence and what’s coming next. It feels like that same wave. First it was automation and now there’s intelligence and a lot of different techs there. So that’s what we’re looking at next.

 

ROB: I feel like I need to pull on that thread a little bit, marketing AI. If you were the first HubSpot partner, who are we partnering with on AI that everyone else should be looking at in 8-10 years from now? We’ll all be at a 20,000 person conference about it.

 

JESSICA: That’s the question we’re diving into. We have this website called The Marketing AI Institute. We’ve done interviews with a lot of those companies, finding out exactly what they do, what solutions are out there, how it works – looking at a lot of products – and then just giving them the platform to share that information with our audience there.

 

ROB: What’s a typical client look like for PR 2020? Is it folks who are selling in the business, is it consumer, is it not typical? Tell me a little bit about that.

 

JESSICA: I would say it’s not that we’re looking at just one industry or one type of client, but most of our clients do fall into the B-to-B category. Our team is the full extension of their marketing team, doing everything from strategy to marketing automation and performance all the way through for bigger enterprises where we’re just doing one thing really well for a company and serving to fill the gap.

 

ROB: I feel like I see, in this environment, at this conference, a little more of the agencies that are taking on the full outsourced CMO role. Why do you think that is? Do you think that’s something specific to the kind of work you do, or do you think there’s a lesson in there for people who are in other sorts of agencies as well?

 

JESSICA: Good question. I think agencies are positioned right now to be on top of all of the trends that are happening in marketing, sales, service. For a lot of companies that have more siloed structures, an outside consultant or outside agency can come in and help align where they might need it.

 

I think also with software, especially like HubSpot that include the marketing, sales, and service suite of products, if you have someone who’s an expert in that, it’s almost a tech-led type of change for an organization. If you can find an agency that really can master people, process, technology, and come in to do that high level CMO type of strategy shift and implementation, it’s really helpful for a lot of companies.

 

I would say that’s one reason to have an agency, but it’s always nice to have that internal champion within your client who knows the business, knows the industry, knows the culture like the back of their hand. You definitely need someone within the company, too.

 

ROB: Right. With that specialization and focus and depth that you have, where do you draw the line? What are services that you say ‘no’ to?

 

JESSICA: We are a small team. We’re about 20 people. A lot of strategic consultants is, I would say, our core, and then we outsource two partners for dev, design, a lot of those video special services.

 

But I think what our team is really good at is thinking about situations as a problem, a solution, a challenge, an opportunity. We do have different methodologies where we’ll approach a business challenge and help our clients think through more than just marketing.

 

ROB: You have been with PR 2020 for a little bit now. Tell me a little bit about how you came to join the company, how the company started, and how your role has changed over time.

 

JESSICA: How the company started, I’ll start there since that’s chronologically where it began. Paul Roetzer, our CEO, was in a traditional agency and said “Hey, I’ve got this idea for a different way.” He called it PR 2020. Had a paper, showed his boss. It was something that he believed in really passionately and fully enough to take the chance by himself and start. That was November 2005.

 

I came to the agency – I’ve been there 7 years, so it was 2011. But I actually had a colleague at my previous agency who met Paul and said, “This isn’t a fit for me, but I really think you need to just meet this guy and talk to him.” So we had coffee one Saturday and it turned into a 3-hour conversation.

 

The next thing I knew, I was really excited about the agency. He said, “Send me your resume. Send me a few writing samples,” and that was it. He was like, “Okay, we want to work with you.” It was cool how it happened.

 

Where the agency is going – standard inbound marketing agency. When I started, I had to learn what HubSpot is, what inbound is. I would say now our breadth of services is just always looking ahead and looking at a lot of tech/people/process type of challenges and doing that for clients.

 

ROB: Dare I ask, what employee number were you when you joined?

 

JESSICA: I don’t know.

 

ROB: Were there 20 people still, or was it 10 or 5 people?

 

JESSICA: It was smaller. We have employees who’ve been there for 12 years, 9 years. I’ve been there 7, but I’m not the longest tenured. So yeah, it’s a nice culture when you can be there 7 years and you’re not the oldest.

 

ROB: But your role has grown in that time, right?

 

JESSICA: Sure.

 

ROB: There’s one partner in the agency?

 

JESSICA: No, we have a CEO and then we have a couple VPs, and then Director level and a lot of consultants. I started as a consultant. I was on a couple of our bigger tech accounts.

 

About a year in, we had a conversation asking, “Hey, here are what I think my strengths are, here are what I think the needs of the agency are. Do these match?” It was a service and operations type of interest that I had in that role, and that’s what I’m doing today. So that’s pretty cool.

 

ROB: That’s very cool. You presented yesterday, and you presented on point pricing. Tell us what we need to know about point pricing – kind of the shorter version. I’m making you compress a full session into a quick conversation.

 

JESSICA: Oh, I compressed a lot of information into an hour yesterday. Anyone who was there, they were with us, but it was a lot.

 

Point pricing in essence is our value-based pricing model. Our clients don’t pay for time. It could take me 20 hours to do something, it could take someone else 10, and we don’t want to charge our client for that talent type of difference. So we agree ahead of time on a set standard of points for a specific service or a specific program.

 

It’s kind of like gamifying your pricing. All of your points have a purpose; they all can align to a goal. How many points are you putting toward brand? How many are you putting toward sales? We’ve really just tried to eliminate hours, time – any variable that’s not fair to the client to pay for, we take that on ourselves so our clients aren’t paying for our inefficiencies or our learning.

 

ROB: I like that. I think that makes sense, but break that down – give us an example of how a client proposal would break down into points.

 

JESSICA: We would talk to the client. We have a couple surveys, an audit. We would get into a good place with them where we have a feel of what they need. We’ve validated it with their marketing performance data, and we’re in that proposal stage.

 

It would typically break down into foundational services. What types of strategies, competitive audits, or content planning you need, or tech stack evaluation. Each of those has a point value. Maybe it’s a 34-point project, 55-point project. Then implementation. We do content production, promotion, a lot of your HubSpot setup. Those all have a point value. And then performance, that has a point value, too.

 

So that’s how we group the proposal. At the end of the day you have a Gantt chart that has your 1-year plan of what we think we’ll do. There’s flexibility there, but it sums up to a monthly point budget. Do you need 80 points per month, do you need 200 points a month? We decide on that together, and then we go from there.

 

ROB: Got it. We’re not getting any high scores with a million points. That would be overwhelming.

 

JESSICA: That would be overwhelming, yeah. [laughs]

 

ROB: If you do some content revisions – everything has a point value. This feels a lot like in software development. There’s the Scrum Methodology. Is it kind of drawn from there?

 

JESSICA: It is.

 

ROB: Do you have a software gearhead somewhere in the business?

 

JESSICA: We actually went through this yesterday at the talk. Every 2 years, our pricing model has evolved. It was in 2012 where that 2-year evolution wasn’t a pricing change; it was a software product. It was our first – we call it Marketing Score. It’s a survey where marketers go through and rate their marketing and they get a report spit back out.

 

That’s when we learned the ins and outs of Scrum and Agile and more of that developer side. Then you see that directly impact our pricing.

 

ROB: I saw that Marketing Score in your email signature. Where do people go for that?

 

JESSICA: That is www.themarketingscore.com. It’s basically just a survey that helps us have good conversations with leads or people who we want to work with. It’s a subjective view of your marketing, and then we layer on the performance aspect. You can have multiple people within your company take it, and it’s a really great conversation starter to say, “Hey, here’s the range between CEO and CMO or leadership and marketing team, sales and service. Where are those gaps? Let’s talk through it.”

 

ROB: Do you have pretty much any prospect go through that?

 

JESSICA: Yeah, it’s part of our biz dev process. But other people can find it and take it as well, and we have a version for agencies. If agencies want to send their leads to it, they can just register them. We won’t talk to them. We have a lot of data, too, so it’s cool because we can do a report and see where marketers from different companies and different marketing budgets are ranking their package or their program.

 

ROB: It seems like a nice way to get the customer to help you a little bit with discovery, because you can get absolutely buried in discovery.

 

JESSICA: Yeah.

 

ROB: That’s really interesting. What’s something that is a lot of points? What’s a job, a task, an item?

 

JESSICA: Your content strategy is a lot of points, but we break it down. Anything that is a lot of points, we’ll break down into smaller pieces. We just helped a company launch a new website, introduce a new brand, open a new office. That was a 6-week, real tight turnaround. That was like 300-400 points, so that was a bigger one.

 

But everything breaks down into – we use the Fibonacci series, so a 1, 2, 3, 5, 8. Smaller pieces is the only way to maintain your sanity when you’re trying to scope a big project.

 

ROB: That’s straight out of the Scrum/Agile.

 

JESSICA: Exactly.

 

ROB: But it’s smart because it keeps you from arguing whether something’s a 7, an 8, or a 9. Is it an 8, a 5, or a 13? Pick one.

 

JESSICA: Yep.

 

ROB: So if someone’s thinking about doing this – I feel like this can apply to so many different businesses. Obviously it applies to software development, but even within marketing agencies – you could have a branding agency that could follow this process. How did you arrive at your first point system, and what did you learn in the ensuing 6 months?

 

JESSICA: We’re on Version 3 right now. It might change next year. The whole process is documented on our other blog for agencies. It’s themarketingagencyinsider.com. We’ve packaged it up into an online course that takes you through everything we’ve learned along the way.

 

I would say the biggest difference now and then is that variable price per point. When we first introduced it, we thought it’d be cool to incentivize people to spend more. We had a Basic, a Moderate, and an Enterprise package, and v1 of pricing had the Basic package at $8k and $175 per point or something like that. Medium was $160 and Enterprise might’ve been $140. So you’re incentivized to spend more by getting more points.

 

We found that people who needed the most help, the smaller packages who really didn’t have the budget and needed the most results from that, didn’t have enough points to get there. So v3, we’ve stripped that out and every point costs $150 regardless of your package size.

 

With the agency you do have more of the developer type of incentives added in for free. There’s a chart underneath, and you get checkmarks of what’s included. The Enterprise size package now has free performance reporting, free campaign management, weekly or biweekly calls. So you’re doing more with the points, you need to prove the value more.

 

But we don’t want the clients to pay for that, so we’re trying to include it. It’s more feature add-on instead of a pricing increase.

 

ROB: Interesting. We’ll try to get that in the show notes. I think that’s worth everyone checking out. I really hadn’t thought about that very much as a pricing model. Very, very cool.

 

You said you have been to seven or eight of these Inbound conferences?

 

JESSICA: Yeah. It’s been fun.

 

ROB: What keeps bringing you back, and what are you learning so far this year?

 

JESSICA: The people, for sure, keep bringing us back. I love seeing our HubSpot friends at least once a year. The agency community for sure has grown so much. Even yesterday in the talk, I saw a lot of familiar faces. It made me a little nervous to present in front of some of the people I’ve seen speak so many times.

 

But yeah, it’s just the people that keep bringing us back, and then the way the product has developed. This year I’m really excited that everything we talked about last year is actually live, functioning, ready to go.

 

And I’m excited that service is a big part of it, because I think those kind of conversations with your customers on your website are some of the most important that you have. The fact that you can have conversations now integrated with the marketing and the sales part of HubSpot’s product is something I’m excited to bring to all of our clients.

 

ROB: It makes you wonder what we’re going to hear today, right?

 

JESSICA: Yeah.

 

ROB: They really are building this comprehensive cloud of things you need. It makes a lot of sense. What kind of sessions do you learn the most from when you’re here?

 

JESSICA: I love to disconnect this week as much as I can and really sit in on all the keynotes. People from the entertainment industry, magazine, fashion – I don’t hear a lot of that in my everyday, so I do like to take those nuggets from different sessions.

 

Brian and Dharmesh and Chris O’Donnell, their sessions are usually the most helpful for what we do on the day-to-day with implementing HubSpot’s program and their product. That’s always one that we’ll attend and take a lot of good notes through, and recap in some sort of format for our audience, too.

 

But I think the off-the-wall ones that I’m like, “Oh, Shonda Rimes, what am I going to learn here?”, I always come away with the most from those.

 

ROB: Very cool. If you were starting your role over at PR 2020, you were rewinding, what are some things that you would do differently along this journey? Some lessons you’ve learned?

 

JESSICA: I’ve been soaking up so much knowledge from people I’ve met along the way. I think I would just probably speak up more in those conversations. We have a really great network of people, and I’m just now actually building my own relationships with them and getting to know them a little better. I do think it took me a few years to realize, hey, you have a seat here. [laughs] It’s okay to speak up, to send an email, to connect on your own. So I would say I’d probably do that earlier.

 

ROB: That’s so valuable. I can say as a business owner, I really value when people speak up because it helps you – the things that are always pulling in the back of your mind, you kind of know them. I was talking to an agency owner yesterday who you may’ve heard speak who talked about somebody embezzling $300,000 from his agency.

 

JESSICA: No, I didn’t hear that.

 

ROB: And the lessons he learned from it. That was a catalyst for him to make some of the other changes that he knew they needed to make in the agency. He kind of knew them, but it’s when you’re trying to recoup this loss of $300,000 that you actually turn the dial on profitability.

 

This isn’t a core value proposition to your clients, but I would imagine pricing on points helps profitability. Is that fair?

 

JESSICA: That’s the goal. There are certain projects we know we’re not going to profit on, but that needs to be done for the next project to be successful. So yeah, it’s hopefully a win-win. Definitely pricing is one of those things, or money – or embezzling $300,000 – finance is such a topic that you need to talk about and need to make easy for people and transparent for people to really trust.

 

ROB: Profitability – you’re probably in one of those processes. Is that fair to say? You’re one of the ones saying, “This is this many points; here’s how we’re going to do this, whether we have an experienced person, a less experienced person.” You’ve got to break in the less-experienced people, and you’re trying to deliver value to the client, but there are processes that drive profitability on those things. Is that pretty true?

 

JESSICA: Yeah, for sure. If we cannot start at ground zero and start from what we’ve learned last time, that’s really helpful for a new employee that’s learning it. Having that coaching from a senior employee takes time, and we don’t want our clients to pay for that.

 

But, yeah, that’s really helpful for their career and for the betterment of our agency services too, because we’re teaching them. We’re investing a lot in our people there. So yeah, I would say that process is a critical part of what we do.

 

ROB: Very cool. You mentioned that over the past year, the service offering has been a pretty cool addition. That’s something you rolled out pretty broadly with clients? Were people using something like a Drift or tinkering around with other chat solutions, and was this a natural extension to bring in?

 

JESSICA: Yeah, and we’ve recommended Drift to a lot of clients, too. We’ve actually worked with a huge enterprise provider of live chat contextual implementation and predictive conversations. That was a client for 3 or 4 years. We were waiting for more chat to roll out and marketing software for our clients who couldn’t afford that more enterprise level solution.

 

But conversations and engaging with people one-on-one on the channel that they prefer to interact with, just making it as seamless as possible and making those moments really matter and count, and delivering a solution, actually – I think that’s super important for how brands engage with people. So yeah, excited to roll that out.

 

ROB: You’re taking me back in time a little bit with the enterprise chat bit. I spent some time in a company that was acquired by LivePerson out of New York, so I know a lot about predictive enterprise chat – more than I probably want to know.

 

JESSICA: They do cool stuff, though. If I’m traveling and I’m on the app for my plane and I want to just chat right there in the app, I want to be able to do that. If you can offer that, that’s what your customers want, usually.

 

ROB: With the stuff in the past, that’s cool, but what is coming up – we don’t know what the future holds for HubSpot – what’s coming up for PR 2020 or the broader world of marketing and what you can do for clients? You mentioned AI; what else is coming up, or maybe even applications of AI, that you’re excited about?

 

JESSICA: That’s definitely what it is. I think for the agency, that’s what we’re dipping our toes into. We have The Marketing AI Institute. Paul has a talk on that today. We have a cool announcement coming today, too.

 

That’s what we’re looking ahead into. We’re trying to connect people to what techs are out there, how to get ready, how to prepare your data, how to think about your tech stack a little differently with getting it ready for what’s next.

 

Also, as we get more intelligent, I think brands are needing to get more human. You can’t automate everything. This is my mission right now, I would say. How do we identify those moments that matter the most to people and make it as convenient as possible with personalized – whatever they need. If they need a portal for their past purchases, make that happen on the tech side, but also have that human support and that element of engagement that makes you a Patagonia, an REI.

 

Have a mission that your customers can connect to, that your brand can connect to, and that you can involve your customers in. Have that human element. It’s just so important as we get more techy and crazy.

 

ROB: I think this is actually a very interesting and present question. With technology, you can automate an awful lot of things. How do we as marketers, as content or inbound marketing, how do we sift which things are helpful to automate and which things are annoying to automate?

 

JESSICA: That’s a really good question. [laughs] I would go through everything through the lens of the customer. “Solve for the customer” is HubSpot’s big thing. Think about the customer’s experience, not only with your brand, but think about their life – how many brands they’re engaging with, what they actually have time to read.

 

I don’t want to get an email from a brand every day. I just don’t. I want to get an email when I log in. I want to know everything that I need to know at that time when I sign up. If I make a purchase, I want documentation of that. I might also want a personal connection. If I have a question, I want a human, usually, to answer.

 

So I would say think about your customers’ experience with your brand, but also with the brands that they connect with on that deeper level, and try to bridge the gap. I don’t know the short answer for your question. That’s such a good question.

 

ROB: And it changes. That’s what makes it so interesting, and sometimes – I’m just shooting from the hip – sometimes it changes because the process of asking a human is so unpleasant sometimes. The phone tree and the 30-minute wait, and “we’re always super busy, always.”

 

JESSICA: I would say that’s hopefully the premise of the tech. If you cannot be on a phone tree for 30 minutes because a robot is directing you to the right information quicker or helping the humans – [laughs] “the humans” – helping the humans resource information up quicker so they can answer your question a little more conveniently. If you can take these computers that read a lot faster than humans do and have them help the actual agent, that can save time and trouble.

 

And that’s just one scenario. My phone knows when I’m going to the grocery store. I don’t know how. I have a grocery list app, so maybe it just picks up, “Hey, she was using the grocery list app, she’s going to the store. Take this different route. There’s traffic, there’s construction on the way you usually go.” That’s helpful to me, and that saves me time.

 

Those little types of applications make a difference, and hopefully that’ll give humans more time to be nice and not be rude to customers.

 

ROB: There’s a lot of making people superhuman. AI can help you – I don’t, mostly, right now want to talk to an AI. Maybe sometimes I do. But you can certainly imagine if AI can help somebody who’s trying to serve a customer – here’s three things you could say to them, and add a human personality.

 

JESSICA: Yeah, add that layer over it for sure. And I think what you mentioned at first – we always ask, or we recommend asking, “Hey, do you want to talk to a human to start? Do you want to talk to someone? You might have a 2-minute wait. Or do you want us to try to help you based on what you tell us in this chat conversation?” We always try to give the option as well.

 

ROB: That’s super interesting. It’s going to change. You can see with what Google has been showing with booking restaurant appointments – do I really want to book a reservation with a person or not? I don’t know if I know right now. And that could change in 5 years.

 

JESSICA: Do you trust the tech to do it, or is it going to mess it up and when you get there, you’re not going to have a reservation? Yeah, it needs to be a little more quality before I think we can trust it.

 

I think that part of it, you need to get the confirmation email, you need to see a picture of “here’s the restaurant you booked at, here’s their menu, start looking.” If it was that experience, yeah, I would do it every time. But that’s not where we’re at right now.

 

ROB: Very cool. Jessica, thank you so much for your time. It’s a pleasure to meet you. It’s a pleasure to learn from you.

 

JESSICA: Oh my gosh, same with you.

 

ROB: Thank you for sharing your experience.

 

JESSICA: Thank you.

ROB: Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

Leave a Reply

Your email address will not be published. Required fields are marked *