How does your pricing strategy perform? Do employees, clients and prospects actually like it? The right pricing strategy makes it easier for agencies to scope work, grow accounts, improve productivity, and drive performance. PR 20/20 introduced point pricing to the industry in 2012. In this session, we’ll share why we transitioned to a value-based pricing model, how we pulled it off, and lessons learned along the way.

1. Point Pricing
Drive Agency Performance, Productivity & Profit
with a Value-Based Model
#pointpricing

2. Jessica Miller
PR 20/20
jessica@pr2020.com
@jessica_joellen
#pointpricing

3. “Yoga is
Simon Says
for adults
who have
lotsa free
time.”
Ali Wong
#pointpricing

4. How does your pricing strategy perform?
#pointpricing

5. Do employees, prospects and clients
mention how much they actually like it?
#pointpricing

6. ● Origins of Point Pricing
● Top 5 Lessons Learned
● Performance, Productivity, Profit
#inbound18
#pointpricing

7. Point Pricing Origins
#pointpricing

8. “Strive for 5.”
#pointpricing

9. Billable time.
Many agency professionals strive
to meet daily or client quotas.
You’re chasing hours instead of results.
#pointpricing

10. #pointpricing

11. A
B
Math.
Blog Post: Employee A
Hourly rate: $150
Hours to complete: 3
Total Cost: $450
Same Blog Post: Employee B
Original draft ($150/hour,5 hours): $750
Senior review ($250/hour, 1 hour): $250
Edits ($150/hour, .5 hours): $75
Final senior edit ($250/hour, .5 hours) $125
Total Cost: $1,200
#pointpricing

12. “... productize a
service business
The billable-hour model was a flawed, archaic,
agency-centric system that wrongly tied agency
performance to outputs, not outcomes.
…
The problem was that the billable-hour model was the only
one I had ever known. How would we build an entirely
new financial model and productize a service business?
Paul Roetzer
CEO, PR 20/20
“
#pointpricing

13. PR 20/20’s Pricing Story
2006 2008 2010
#pointpricing

14. PR 20/20’s Pricing Story
2012
#pointpricing

15. value metric: a pricing unit that aligns with the
value you create for customers
#pointpricing

16. #pointpricing
What’s our value metric?
2010

17. #pointpricing
2014

18. point: a fixed unit of value; an investment
that represents the incremental
progression toward a goal
#pointpricing

19. #pointpricingtoday

20. Lessons Learned
#pointpricing
^the many

21. Humans are not good
at forecasting.1
#pointpricing

22. Agencies can’t accurately predict hours
due to variables such as professional competency,
focus, efficiency and forecaster bias.
The higher the number, the more uncertain
the forecast.
#pointpricing
1, 2, 3, 5, 8, 13, 21, 34, 55 . . .

23. Standard
Estimated hours,
value variable,
Fibonacci sequence.
#pointpricing

24. Even with value-based pricing,
businesses operate on hours.2
#pointpricing

25. #pointpricing
Forecasts
Each team submits
monthly forecasts based on
point per hour (PPH)
data and estimates.

26. #pointpricing
Internal
Weekly updates
recap client forecasts,
points, performance,
and other notes.

27. Strategic anticipation,
agile implementation.3
#pointpricing

28. #pointpricing
Internal
Pre-debrief.
Consider all audiences,
questions and responses.

29. #pointpricing
Resources
Change = crazy.
Make your team feel
comfortable transitioning
to a new model.

30. #pointpricing
Clients
Anticipate on a per-client
basis the questions teams
will encounter;
draft approved,
consistent responses.

31. Transparency promotes
client trust, loyalty & growth.4
#pointpricing

32. Apples
to apples.
Flex other variables
(in this case cost per point)
for existing clients
during transition.
#pointpricing

33. Goals.
Align points
to client goals.
Start with the proposal.
#pointpricing

34. Progress.
Show in real-time
what you’re up to.
#pointpricing

35. Easy to scope = easy to sell.
5
#pointpricing

36. Sample 100-Point Campaign
#pointpricing
Project Points
Ebook with Design 55
Landing Page 2
Email Nurturing (x4) 8
Case study 8
Blog Post (x3) 12
Social Shares 2
Social Ads 13
TOTAL 100

37. #pointpricing
Campaigns Points Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Foundation 162 71 57 34 0 0 0 0 0 0 0 0 0
Lead Gen Strategy (Audience #1) 21 21
Brand Analysis 21 21
Marketing Budget Analysis 8 8
HubSpot Demo & Strategy 5 5
Contact Database Analysis 3 3
Blog Editorial Calendar 13 13
Lead Conversion Strategy 21 21
HubSpot Integration & Onboarding 13 13
Website Conversion Optimization
Strategy
5 5
Agency Matrix Management Strategy 5 5
Google Analytics Dashboard Setup 8 8
Social Strategy Review 5 5
Brand Awareness Strategy 34 34
Lead Gen (Audience #1) 375 0 50 25 15 60 25 15 60 25 15 60 25
Lead Gen Campaign #1 100 50 25 15 10
Lead Gen Campaign #2 100 50 25 15 10
Lead Gen Campaign #3 100 50 25 15 10
Lead Gen Campaign #4 75 50 25
Lead Conversion 300 0 0 50 25 15 60 25 15 60 25 15 10
Lead Conversion Campaign #1 100 50 25 15 10
Lead Conversion Campaign #2 100 50 25 15 10
Lead Conversion Campaign #3 100 50 25 15 10
Brand Building 327 16 16 16 31 31 31 31 31 31 16 16 16
Blog Posts (4 per month) 192 16 16 16 16 16 16 16 16 16 16 16 16
Brand Building Campaign #1 45 15 15 15
Brand Building Campaign #2 45 15 15 15
Brand Building Campaign #3 45 15 15 15
Management 120 10 10 10 10 10 10 10 10 10 10 10 10
Monthly Campaign Scorecard Report 60 5 5 5 5 5 5 5 5 5 5 5 5
Monthly GamePlan Review Session 24 2 2 2 2 2 2 2 2 2 2 2 2
Weekly Activity Reports 36 3 3 3 3 3 3 3 3 3 3 3 3
Client Calls and Emails (Included) — — — — — — — — — — — — —
12-Month TOTAL Estimated Points 1,284 97 133 135 81 116 126 81 116 126 66 101 61
MONTHLY Budget @ $140/point $14,980
Proposals
Guide the client for
ongoing partnership.

38. #pointpricing
Campaigns
Starting points
and sales drives.

39. 1. Humans are not good at forecasting.
2. Event with value-based pricing, businesses operate on hours.
3. Strategic anticipation, agile implementation.
4. Transparency promotes client trust, loyalty, and growth.
5. Easy to scope = easy to sell.
Recap
#pointpricing

40. Performance
Productivity
Profit
#pointpricing

41. Performance.
Every point has a purpose.
#pointpricing

42. #pointpricing
GamePlan
Always tie the overall
goal to each campaign
or tactic.

43. #pointpricing
Campaign Center

44. #pointpricing
Campaign Center

45. #pointpricing
Biz Dev Actual

46. Productivity.
What gets measured, improves.
#pointpricing

47. Account Team Productivity Metrics
● point balance
● points per hour (overall, project, individual)
● forecast accuracy
● add-on growth
#pointpricing

48. Agency Productivity Metrics
● overall point balance
● overall points per hour (overall, project levels)
● service category efficiency
● client category performance
● utilization rate
● services revenue
#pointpricing

49. Profit.
Drive value, drive profits.
#pointpricing

50. Agency Pricing KPIs
● services revenue
● monthly recurring revenue (MRR)
● project revenue
● points contracted
● points delivered
● points balance
● client hours
● points per hour (PPH)
● revenue per hour (RPH)
● price per point (PPP)
● revenue per point (RPP)
#pointpricing

51. Agency Pricing KPIs
● services revenue
● monthly recurring revenue (MRR)
● project revenue
● points contracted
● points delivered
● points balance
● client hours
● points per hour (PPH)
● revenue per hour (RPH)
● price per point (PPP)
● revenue per point (RPP)
#pointpricing

52. #pointpricing

53. Point Pricing for Agencies
#pointpricing

54. #pointpricing

55. Point Pricing
for Agencies
PR 20/20 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 10x 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
Gorilla 76
#pointpricing

56. Jessica Miller
PR 20/20
jessica@pr2020.com
@jessica_joellen
#pointpricing