Points: A Different Approach to Agency Pricing [Podcast]

By | June 19, 2018
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While at the Intelligent Content Conference, our CEO Paul Roetzer (@paulroetzer) had the chance to sit down with Jeff Julian (@jjulian), CEO of Squared Digital, co-founder of EnterpriseMarketer.com, and author of Agile Marketing: Building Endurance for your Content Marketing Teams. The two talked about PR 20/20’s point pricing model in depth.

Need a refresher on point pricing?

For readers unfamiliar with our pricing model, here’s the 101:

A point is a fixed unit of value. It’s PR 20/20’s value metric.

Point pricing ensures clients get the full value of every dollar spent, regardless of how much time it takes to deliver. Points provide total transparency into pricing, progress, performance and resource allocation.

Each project within a campaign is assigned a fixed-point total (e.g. blog post = 3 points) based on value creation rather than hourly estimates. The point totals are standard across all clients and are determined using the Fibonacci sequence.

>> For more information on the Origins of the Point Pricing Model, check out that post from Paul.

So what happens when you talk about pricing in depth?

We’ve done our best to share some of the basics around the Point Pricing model, and have seen a lot of interest from other agencies. In fact, dozens of agencies have signed up for the Point Pricing for Agencies on-demand course—presented by HubSpot. Each session explores the concepts and processes behind the point pricing system and gives agencies the knowledge and guidance needed to shift to a value-based pricing model that is designed to drive productivity, profits, and performance. 

The Intelligent Content Conference podcast below also dives into details. (See more resource links at the end of this post.) So if you’re interested in the motivations behind Point Pricing, or measuring how effective your pricing plan is for clients and the agency, this discussion goes into those details. You can listen to the full podcast below. 

 

Don’t have time to watch the full video? Here are some of my personal favorite timestamps:

08:10: Point Per Hour (PPH)

  • How do you track agency profitability?
  • Do you still measure hours?
  • How do you even out junior/senior time to drive internal efficiencies and scale?
  • How do you approach marketing services from a business perspective?

10:10: Two-Way Value, A Win-Win for Clients and Agencies

  • How do you clarify value?
  • How do you avoid the bait and switch (from sales promises to actual services delivered)?
  • How do you update an agency’s entire foundational pricing model? Is it worth it?
  • How do you know it’s working for clients?
  • How do you motivate a team to complete points promised?

18:25: Efficiency

  • How do you think about efficiencies? What’ the consistent control?
  • How do you account for seasonality, distractions, and more, without making a client pay for inefficiencies?
  • How many hours per day is your team truly effective?
  • What KPIs are most important to track, including KPIs, the ability to zoom in to troubleshoot.
  • How does the overall pricing model account for anomalies (operational cost, sales/marketing, etc.)?
  • How do you motivate and get efficiencies out of the team?
  • Can noise-canceling headphones, busy lights, or dual monitors make your agency more profitable?

 

PR 20/20 Point Pricing Resources

Interested in learning more? Here’s a quick list of links to additional information. Enjoy!