What if agencies abandoned proposals and posted transparent pricing?

Could jumping through fewer hoops in the sales process improve outcomes for agencies and clients alike?
Agency Leadership Podcast

SUBSCRIBE:   Apple Podcasts    |    Google Podcasts    |    Stitcher    |    Spotify    |    RSS

What agency owner hasn’t dreamed about telling prospects: here’s what I do, here’s what it costs, take it or leave it?

That’s pretty much what Chip and Gini tackle in this episode of the Agency Leadership Podcast. It all started with a provocative question posted by Gini in the Spin Sucks Community on Slack:

What would happen if we all banded together and stopped sending proposals? We put our pricing on our websites. We became clear about what we do (and who we do it for). And they either buy or they don’t.

What does that life look like?

Gini believes passionately that this is the right path, while Chip frames it in more idealistic terms. Wherever you fall in the debate, there’s lots of good insight shared in this discussion.

Resources

Transcript

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

CHIP: Hello, and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

GINI: I’m Gini Dietrich.

CHIP: And today we’re, we’re going to light a match well, more appropriately, Gini already lit a match in the Spin Sucks community recently. And so now we’re going to talk about the results of that match lighting.

GINI: And it really light a match. There’s just something I’m very passionate about. And I think that things are done a little backwards, but we continue to do them because it’s the way things are done. And I would like to see us change that.

CHIP: And I think this is going to be a productive discussion because I think I’m gonna fall into the camp of it’s nice to live in that world, Gini, hey, it works. But the rest of us live in the real world.

GINI: No, it works. I’m telling you, it works. It doesn’t work just for me. It works. I have I do this with all of our clients. It works.

CHIP: I’m not saying that you Well, let’s we should probably instead of speaking in hypothetical terms here, we should we should lay out the topic because i think i think It works in part because everybody is not doing it. But the the conversation centered around what if everybody did it? And I think if everybody did it then actually that would be bad for your acolytes.

GINI: Hmm. Okay,

CHIP: but so explain to the audience what the hell we’re talking about here so that they don’t just Well,

GINI: I’m sure this is not the first time if you’ve been listening for almost the last year it’s been almost a year which is crazy.

CHIP: You know, it really bothers me. It’s actually been over a year but has

GINI: it? Yeah, well, we’re 49 so I figured we had two more three more episodes to go before we

CHIP: missed. We missed a few in there but thanks for reminding me audience that we’ve been inconsistent. But but at least this show didn’t take a whole summer holiday so

GINI: summer and all fall pretty much IPR.

CHIP: Sorry, sorry, sorry.

GINI: Sorry, Martin, Martin, and Joe and me. One of the things that really bothers me is that and I started to do this in my own agency, because I would sit down with the prospects, they would be really excited, we’d have a great fruitful conversation. You know, I would say, so what, you know, I think we can help you, what is your budget? And they would say things like, Well, you know, I don’t really have anything budgeted, but tell me what you think it’s going to cost. And we can go from there. And over the years, I got smart and would say, well, we have a minimum of and then whatever our minimum was, you know, it continues to increase every year, but whatever our minimum is, at the time, I would say, let’s just use $5,000 a month, our minimum is $5,000 a month. Is that something that you can afford? And they would say? Yes, absolutely. Okay, great. So then I’d come back to the office, I’d go back to the office, I sit with my team, we would talk about, you know, what happened in the meeting what we talked about, we discuss what their goals are. We do some research, we do some competitive research, and we pulled together and this is a very big agency kind of thing, but that’s where I came from. So we would put together this beautiful proposal that had all these great ideas in it and one of two things would happen. Either we would close the client or we would get ghosted because it was far more expensive than $5,000 a month and, you know, doing everything they wanted to do. And you know, throughout the years, and I’m sure everybody listening to this can relate to this, you would try to figure out, Okay, well, should we tear it out? Or can we give them prices for everything that they want, and they can pick and choose? And you know, none of those things worked. But what was worse was the client would agree to it. And then you’d get into the business and you had this for lack of a better term scope of work in a proposal that you get into the business and be like, I can’t do any of this yet. Because all this stuff they said they had done isn’t done. They don’t have key messaging. They don’t have, you know, they don’t have all the things that we need to be able to achieve our goals. And so then you weren’t from the client’s perspective, you weren’t doing what you said you were going to do. And from our perspective, we couldn’t accomplish the things that we did because the client either wasn’t fully true. Full, we didn’t ask the right questions or you know, whatever happens to be. And I got tired of that I was like, I can’t keep spending this kind of time and not getting not getting the results that we want. So what we switched to was we no longer write proposals. And what we do is we’ll go into a new business meeting, and we’ll have a conversation and will diagnose the problem and will say to the prospect, what are your biggest challenges? What are you working on now? What are your goals for next year, you know, and work through it from a business perspective to understand what they truly needed to achieve. And then at that end of the conversation, one of two things happens, either we go, you know, I don’t think we’re the right fit for you. But let me refer you to somebody who might be in that happens sometimes, or you know what I can help you and here’s our process, and then you talk them through the process and how much it costs. So I call it the first date package that you don’t, you don’t work with a client on a full year retainer. immediately because you don’t know you don’t know what you don’t know yet, you don’t know if they’re going to be you know if the other people inside the organization are going to be great to work with or terrible that you just don’t know. So that’s our entry level, you have to do this before we can do all this other stuff you want to do. And either they say yes or no in that meeting, and I will tell you that 95% of the time we get a yes in that meeting. I do have a template that I customized based on the conversation that talks about, you know, what it is and what they get and what the deliverable is at the end. I can send that off within an hour after the meeting. I sent it with an agreement and a an invoice. We get paid up front we we schedule everything and we get it done. And there’s an immediate result that allows us to start working with a client very quickly, and we don’t have to go through the proposal rigmarole and being ghosted and waiting to hear back and all that crap.

CHIP: Thank God you don’t drink coffee.

GINI: order that I don’t believe.

CHIP: I don’t know what would have happened if we had that on caffeine. I bet I think that is the longest single stretch you’ve had on our full year on this podcast.

GINI: I really believe this. Yes.

CHIP: Yes and look and and i agree with the approach generally as well with a caveat or two and and I think it’s to me it’s helpful to break it into some component parts here because the and I jokingly refer to it as your crusade is kind of a crusade but I mean, you know, you believe passionately about it and you believe not just that it’s what you should be doing but you believe that it’s what others should be doing and so you are helping them go through that process with the the coaching advising that you do so, but I think it breaks into a couple of different bands and certainly, you know, in the the conversation that took place in the spin sucks community. There were a few different bands of this and so You know, at the top and i think i think you and I are not going to disagree here much at all, which is, you know, do you participate in RFP? No, right. Most of most of you listeners should not be participating in RFP, with the exception of if you happen to be in a niche, like travel and tourism, for example, where that’s basically the only way that you can often get the work. You know, like you’ve got to play by the rules to some degree that exists, but, but even then, find ways to to not just participate blindly, because blind our fees are always a waste of time. You need to have some sort of an inn or a conversation, or as blends likes to say get them to make some concession for you so that you can see that there that it’s a legit process, you know, ask questions, as as you’ve heard from some of the guests on my chats with Chip podcast, who have done some RFP research, you know, there’s a lot of different ways you can do it. But generally speaking, RFP is bad and so we so let’s set that as the foundation so then then we move into to two other questions, which is, do you do proposals? Or do you do essentially paid discovery, which I think it’s effectively what you’re describing. And, and also, you know, pricing transparency was one of the things that you had specifically mentioned in, in this lighting the fire message. And I think people jumped on that as well. So, and paid discovery. Huge fan of that, I think. And and the reason why I’m a fan of it is because too often I see in proposals, and I saw this in when I was in big agencies, I’ve seen it on the receiving end of agency proposals. There’s so much just stabbing in the dark, and saying, I know what the solution is, but you have no information,

GINI: you have no information correct.

CHIP: So it’s, it’s utterly crazy to think that you actually have the answer. So at best, you’re putting together a typical scenario, which may or may not be right. And there you always want to give detail But you can’t, because you don’t have the information yet. So. So, you know, I think paid discovery is an excellent solution to it. And I, I guess the caveat that I have, and I think that the both paid discovery and pricing transparency tend to work better. With well paid discovery Can I guess I can work more across the board. But I guess the pricing transparency is one that I think doesn’t work as well with really large clients. So if you’re, you know, if you’re an agency that’s getting, you know, 50 or $100,000 a month from a client, that’s a lot harder to do pricing transparency on that. So they so it tends to work better with the SME marketplace, where, you know, because I mean, who’s going to list on their website? Yes, well, our typical project is $100,000 a month.

GINI: Right?

CHIP: Right. But there there certainly are agencies out there that are doing that kind of business and kudos to them for doing it. So you know, that’s, that is the one caveat if you are one of them, I’m not necessarily suggesting go put on your website $100,000 without Common, they’re probably not the most effective. But if you are in the SME marketplace, look, I think there’s there are there are benefits to this pricing transparency because, frankly, a lot of your prospective clients may think that you charge even more than you do. So if you can show them that this discovery process is going to cost this much. And if you’re able to even give an indication then of what other typical projects might cost or, you know, maybe you’ve product eyes that as well. If you’re able to give that to people, it will help weed out the people who just don’t have that budget at all right? So that’s helpful, so you don’t waste time with them. But the second thing that it does is it opens the door to people are like, Oh, well, she’s not you know, I didn’t know that, you know, I could, you know, at least get some initial work for just this, this amount. And, you know, I could I could swing that. Sorry. So it can it can actually play to your advantage because people have, as we’ve talked about before, people will always fill a vacuum with whatever they Our own assumptions are and if they’ve only dealt with, you know, large holding company owned agencies that have, you know, 10 or $25,000 a month minimums, you know, and they find out, oh, you’ll you’ll do something for, you know, four or 5000 a month. Well, that’s, you know, all of a sudden that’s within their budget, they didn’t realize it. So it can be helpful to set expectations in that way as well.

GINI: Yeah, and I don’t see. I mean, I will be honest, it took me a long time to get here. Because I, I was like, I, this was, this was the defining moment for me. I was at blog world in in 2009. And I was at dinner with Danny Brown and Marcus Sheridan and john paul Caddo, and a couple of other people. And john at Marcus was talking about, you know, and this was before he became a gigantic keynote speaker, he was still the pool guy. And he was very, you know, focused on, you should be transparent about pricing, and you should be transparent about what you do versus your competition and all that kind of stuff when we were talking about content and that kind of stuff. And he said to me You want Why don’t you have pricing on your website? And I said, Every, I gave the same excuse that every agency owner does, which is, you know, it’s customized to the client. It depends on what their goals are like we don’t. And I went through that. And he said, but you have a minimum, right? And I said, Well, yeah, he goes, and what is it? And I think at the time, it was $5,000 a month, and he said, so put that on the website. And I was kind of like, so I almost did it to prove him wrong. And so I did I put it on there. And it was this weird situation where all the meetings that I was having and the pick your brains and the coffees and the lunches and all of that dropped drastically. I mean, drastically. And all of the the meetings that I was having, were really qualified people and I was converting the crap out of them. But I also had this weird ego thing where I was like, Why doesn’t anybody call me anymore and so even You know, I mean, I would I think I went from 15 or 20 hours a week of meetings that never resulted anything to maybe five, but those actually resulted in something so, and it was because I had put this on the website and all of the, you know, 15 hours worth of people went away, because they knew they couldn’t afford us.

CHIP: Yeah. Yeah. And I think that can be incredibly helpful, I guess, you know, my, my concern, and one of the things you would suggest was, what if we all banded together and stopped sending proposals and we put our pricing out there? I think while it is still the right decision, I think that it becomes I think right now, it It remains a real differentiator for you and for agencies who are doing it like that, because because most agencies are not. And so so it allows you to stand out and and at such a point as everybody, or a lot of people start doing the same thing, if you then have to find a new way to stand out in that crowd. So it’s an argument for not doing it, it’s it’s simply saying that, you know, first movers tend to receive a certain advantage, but then keeping that advantage, you have to continue to innovate,

GINI: like a best practice once everybody starts doing the best practices no longer best practice.

CHIP: Exactly. I mean, you know, in the old days, if you understood what the hell Twitter was, you were able to win business, simply because you knew what it was today, you have to be able to go beyond that and offer something real and meaningful. And so, you know, I think that it’s more of a caution to folks to realize that this is the right thing to do. And you will you still would be, I think, a first mover today, I think it’s fair to say that most agencies are not taking this approach. But But to the extent that this becomes a true movement, you then going to find

GINI: and I’ll be on to something else, I love that and then I will be on to the next thing.

CHIP: I have no doubt and, and that’s why I do this podcast with you Jenny so that I can I can get a little bit of early Worrying about where things are headed so that I can jump on the Jimmy train and make a boatload of money because as we’ve said before on this show, I am indeed motivated by money. As Am I

GINI: I am very motivated by money has made as much as I hate to admit it I am.

CHIP: There’s there is nothing wrong with that capitalist that let’s let’s not go down that path but in this nickel season, we Boyd labels, no labels anyway. So if someone is thinking about going down this path, I mean, you know what, or is this one of those ones where you say just sort of like you did 10 years ago, just dive right in and start doing it. Do you need to plan it out or you just throw it up on your website and see what happens?

GINI: I think I’m a big fan and just I’m a big fan of testing. I’m also extraordinarily entrepreneurial, and so risk doesn’t bother me but Throw it up there and see what happens and and be aware, be cognizant of the fact that you may not get as many phone calls or emails, you may not have as many inbound leads. But compare that to, am I getting, you know, three quarters less, but they’re the ones I am getting are highly qualified, or am I getting three quote quarters less and they’re not. So you have to you have to test it and see. So don’t just throw it up there in and say, Okay, well, let’s see what happens. You have to actually be thoughtful about how that works.

CHIP: Right? Well, and I think it’s, you know, I think that that is, it’s all about making sure that you’re putting out the right offer to the right audience and that you’re also providing the information as you do with spin sucks. And as I do with All Things I put on agency leadership to help people understand what it is that I can do and how I do it. And so so that means that the conversations you have are much higher value, but I can tell you, that if I’m talking to prospective agency owner who is already listening to this podcast, The close rate is astronomically high, because they already have heard me and how I give advice and right they’ve got a sense of my personality. And so, you know, it then becomes a much easier conversion as opposed to someone that you know, maybe is referral who’s never heard of me. And so you know, you want to be putting out that that good, solid material. And then if you have your paid discovery option and your transparency around the pricing of it, then all of a sudden you’re cooking with gas.

GINI: Yep, totally agree. I have a client who says to me all the time, you’ve been our Director of Training for years, and I thought maybe it was time to step up and pay you. I love that. I love that I put that on my LinkedIn profile, because I love that.

CHIP: Absolutely. And we both share that that mission of trying to help the agency community generally and we know that not everybody is going to pay us for that help. And we just need have a percentage of the people pay us and the rest can go the DIY route with a lot of the content that we put out on our websites, on podcasts, videos, etc. So so keep on coming. keep on listening, and YouTube will be cooking with gas. Unfortunately, our gas has run out the end of the time that we have available today is upon us. And so we will have to draw to an end this episode of the agency leadership podcast. So I’m Chip Griffin,

GINI: and I’m Gini Dietrich

CHIP: and it depends

Like this episode?