Point Pricing: Q&A on Integrating and Managing Point Pricing at Your Agency [Session 2]

By | August 27, 2018
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Presented by HubSpot, Point Pricing for Agencies is a three-course, on-demand series featuring more than a dozen exclusive resources, including pricing strategy documents, tools and templates that your agency can use to establish, launch and evolve its own point pricing model.  

point pricingAt this point, you have a basic understanding of point pricing for agencies. Congratulations! You’re well on your way toward implementing a value-based pricing model. 

Before making any drastic changes to your current pricing, let’s jump back into Session 2: Integration and Management of Point Pricing. This session takes agencies through the tactical implementation of point pricing. 

While we don’t have all the answers, we do have 5+ years of lessons learned. In session two, members learn how to integrate point pricing into time tracking, project management and reporting systems to ensure a successful rollout for all involved. In this post, we give you a taste of some of the top Q&A from the topic!

Stay tuned to Marketing Agency Insider for more insight into the final series session.

Missed Session 1? Find the recap here.

Q: As you forecast GamePlans (GPs), how do you control revenue per type of service?

A: At PR 20/20, we don’t aim to control revenue per service type. Instead, our services are designed around goals. When a client comes in, they often have a goal in mind. We work with them to define that goal, and outline ways in which our team can achieve it. From there, we find a service package that fits their defined needs. 

Internally, we measure service efficiencies to inform pricing at the macro level. This helps to ensure we aren’t over or under forecasting projects.

Q: How do you forecast employee capacity? 

A: At the start of each month, look at how many hours each employee has. At PR 20/20, the average employee completes around 120 hours of client work per month. If you have 10,000 points to deliver next month, you need to figure out how many points per hour your team can produce.

Ask your team: “How many points are we currently generating?” Once you know that number, you can predict how many producers are needed to deliver 10,000 points.

Q: What happens if a project is extremely under forecasted? Do you usually address that with the client during the project, or hold and alter when a future project comes up?

A: Honor the initial quote, unless the client changes the scope of the project.

Tip: Find ways to break down larger projects into smaller segments, and assign point values accordingly. This makes it easier to forecast the scope of a project early on — and it makes conversations easier should multiple revision rounds, delays, or other outside aspects push a project out of scope.

Q: Are contracts yearly? Do you ever do monthly or quarterly projects?

A: Our agency standard is an annual client contract, but we’re willing to take on high-level project work for shorter stints of time. If our teams work well together during this trial period, we do our best to continue the relationship with an ongoing client contact. 

Keep in mind, project work impacts staffing. If you’re willing to take on additional project work, it’s smart to staff above capacity.

Q: Do you prorate services for a yearly contract point-wise?

A: With loyal clients, always look for unique ways to ensure they feel there’s a fair value exchange. For instance, if an existing client is garnering new business for the agency, you may consider reassessing their overall price per point.

Q: What happens if a client has remaining points at the end of the month? 

A: When implementing the point pricing model, keep an eye on point balances. If your client is contracted at 50 points per month, but your team only delivers 35 total points, an imbalance remains. These things happen, but do your best to be as proactive as possible.

Ask your team to explain the reason for the imbalance. Client delays, perhaps? Whatever it may be, take time to reengage on the contract status.

On the contrary, if the client exceeds their balance month-over-month, use this opportunity to bump up their package (with their approval of course).

Q: Do unused/rollover points ever expire? What if a client leaves and they have a point balance? 

A: For PR 20/20, if a client is unresponsive for 45 or more days, they forfeit their points. If a client should cancel the contract before their 12-month service package expires, they too forfeit all unused points. On the other hand, if a client decides to part ways on terms within a contract, we suggest honoring those points within a given timeframe.

Tip: Talk to your legal team about incorporating this language into your Terms of Agreement.

Q: How do you track percentage complete?

A: Percentage complete is relatively subjective to the account manager. If you have a 3-point blog post ready for the client to review, mark the project as 90% complete in the GamePlan. This should serve as a standard for all ready-to-review projects.

Q: Do you assign a point value to training?

A: Assign a point value to everything, including training. The only services we don’t assign a point value to are campaign management (client calls and emails) and strategy and performance (monthly GamePlans, Scorecards, weekly review sessions, etc.).

Q: What percentage of projects has a point value pre-determined versus new projects where you have to determine a quote? 

A: Because PR 20/20 has such a robust service guide, 80-90% of the time our projects already have a pre-determined point value, which clients can access. If there’s a project we’re trying to scope for the first time, we work collaboratively to estimate the overall value for the client. Some questions we consider:

  • Is this project innovative?
  • Could other clients benefit from this project?
  • How much time, money and resources will this project take to complete?
  • Is outsourcing necessary?

Additionally, we access TimeFox for historical data to help us determine the scope of a project.

Q: What are contingency points?

A: If a client comes to us for lead generation, we can project at the beginning of the relationship how we think points will be allocated each month. The truth is, though, we just don’t know. Over time, priorities shift. The client may request points be allocated to a different project that they didn’t think to ask for in the first place. Or, they may not realize the breadth of our services upfront. 

The idea of contingency points is to leave an allotment of points (roughly 10% of the total budget) for clients to draw from for immediate needs. That way, a client can rely on us for quick wins without having to tack on an additional project.

Register for Point Pricing for Agencies Today

Here at PR 20/20, we’re committed to helping agencies establish, launch and evolve value-based pricing models for continued success.

Paul and the team at PR2020 boiled down everything they've learned through years of pricing experimentation into three short, well-constructed sessions, and supplemented the webinars with invaluable tools to help with implementation. This series was worth the price of admission 10 times over. If you're an agency owner or project manager, I can think of very few things I'd recommend you do with your time before immersing yourself in this series.” - Joe Sullivan from Gorilla 76 

If you haven’t had a chance to watch the on-demand educational series, click here to register. You’ll get access to all webinar recordings and materials, plus downloadable slide decks, templates, worksheets and more.

Are you a HubSpot partner agency? Get access to your unique discount code here.