Proposals vs Statements of Work

Episode 86 August 18, 2023 00:45:53
Proposals vs Statements of Work
The Agency Hour
Proposals vs Statements of Work

Aug 18 2023 | 00:45:53


Hosted By

Troy Dean Johnny Flash

Show Notes

Welcome to the Agency Hour Podcast, your backstage pass to the agency world.

In this episode, we're joined by Joe Ardeeser.

Joe the Founder of and an expert at creating proposals for agencies. Wait a minute, what, writing proposals? We've been recommending our agency clients to stop writing proposals completely so things may get a little heated.

Plus, we're tackling the not-so-great parts of agency life and dishing out fixes. Ever wondered how those super successful agencies do their thing? We're spilling the beans. Oh, and we're sneaking in some AI chatter for the future buffs.

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Episode Transcript

Speaker 0 00:00:00 I hated that as an agency because I want to grow intellectual capital. I want to get momentum. And in order to do that, sometimes you have to really establish what you do and what you don't. Speaker 2 00:00:13 Welcome to the agency, our podcast, where we help web design and digital agency owners create abundance for themselves, their teams, and their communities. And this week we are joined by Joe Ardi. Sir Joe is the founder of smart pricing, and an expert at creating proposals for agencies. Wait a minute, what writing proposals? We've been recommending our agency clients to stop writing proposals completely. So this should be a very interesting conversation. In this episode, we discuss proposals versus statement of work, why agency life can stink sometimes, and how to fix it, how successful agencies productize their services, how the market defines your roadmap, the plan for AI moving forward. And of course, my midlife crisis Mohawk. I'm Troy Dean. Stay with us, ladies and gentlemen. Without further ado, please welcome to the podcast, Joe Arter from smart pricing How are you, Joe? Speaker 0 00:01:09 I'm doing really good. Troy. I'm, I'm a little jealous of your haircut, <laugh>. Doing great. Listen, Speaker 2 00:01:14 Listen, I'll be 50 in a few weeks. I know. It's hard to believe. Speaker 0 00:01:17 No way. Speaker 2 00:01:18 And <laugh>, it's a true story. And so you, you know, when you turn, when you're 50 in Australia, you have a choice. You can buy Harley Davidson, you can get a weird haircut, or you run off with a 23 year old. I figured the weird haircut was probably the cheapest, the easiest, and had the least tears involved. Yeah. So this is my choice for, uh, for now, no motorbike. So now this is gonna be a very interesting conversation. 'cause here I am telling everyone to stop writing proposals and you are from smart pricing, which is basically a proposal writing software, right? That's true. Speaker 0 00:01:44 That's correct. Come on then. Speaker 2 00:01:46 Convince me. Convince me. Why should, no, we talked about this, uh, in the green room. Um, let, before we, before we dive into it, let's just talk about why proposals are a thing and where they sit in the process. Like, what is the function of a proposal? Speaker 0 00:02:02 Yeah. I love this question, Troy. And over the years, as I've, you know, understood, you know, really, really honed in on this particular topic, um, one of the things I've realized is that when you're writing a proposal, you're essentially writing a plan. You're, you're just pitching a plan to your prospect. Mm-hmm. <affirmative>, a lot of, a lot of agencies don't think that way. Right? And that, that's why you get these vague one page no description, no clarity proposal. It's not really, well, that might be a proposal in your mind, but it's not a plan. Mm-hmm. <affirmative>. And the reason why I'm so passionate about proposals as plans is because I had a web design agency for 12 years mm-hmm. <affirmative>. And I saw our proposal template become the most important piece of IP I could ever imagine. I mean, it was just, it was our secret sauce. Um, if, if you want happy people, happy team members, happy customers, good reviews, a happy c e o, you need a good plan. Simple as that. And that's why I'm so committed to good Speaker 2 00:03:03 Proposals. Now, what's interesting, I've never heard anyone talk about a proposal as a plan, because, so everyone knows back in, I don't know, whenever it was 2010 or something, I started giving away my proposal template. I had a proposal template from the agency that I was running, and I started giving that away as a lead magnet. Over the next 10 years, that proposal template got picked up by most of the proposal software companies, and was integrated and generated hundreds of, generated millions of dollars for us in revenue, and also hundreds of thousands of leads for our email list. And, you know, it was a fabulous thing. And I burnt it recently in a Facebook ad campaign. I listed on fire in the office here, and I threw it into bin and I burnt it because I said proposals. It did. Uh, now the reason I said that is because my belief is that a lot of the time proposals can actually be used by the prospect to the request for proposal, even if it's not an official R F P process. Speaker 2 00:03:55 If they say on a call, they say, Hey, this sounds great, gentlemen, we love what you're talking about. Can you send us a proposal? What they're saying is, we don't trust you enough to work with you yet. We wanna delay this decision so that we can go away and think about it. But in the meantime, we'll make you feel better about investing your time with us, by letting you send us a proposal. Right, right. The mindset that I have now is we don't call 'em proposals, we call 'em a statement of work, because the difference between, in, in my mind, the difference between a proposal and a statement of work is a proposal is something that we are proposing and that we're asking the client to agree to. Whereas a statement of work is a way of formalizing something that we've already agreed to with the client during some kind of paid discovery workshop. Right? Right. So, so pardon me if I'm a bit of a smart ass about, you know, telling people that they shouldn't write proposals. The nuance is that I think they should pivot at the statement of work and your software allows us to do that, right? Speaker 0 00:04:46 Yeah. First off, full pardon, Troy? Uh, no, no. Uh, resentment there. Um, uh, I, I'm a, I'm a big fan of both models. Okay. I, I think that you just have to pick, what are you doing? Are you, is it get the deal, figure out the scope, or is it mm-hmm. <affirmative> use the scope to, to get the deal. I, I, I don't have a fundamental issue with either of those, uh, methodologies and, and our customers use both. And what I think when I say a proposal is a plan, what I mostly have in mind is the scope of work. I think a clear scope is just huge. Mm-hmm. Speaker 2 00:05:20 <affirmative>. Now we did talk your company, by the way, smart pricing We'll put links to this stuff in the show notes. You can go check it out. I must say the design of everything I've seen, which has only been a few minutes, is exquisite. It looks beautiful. I've had a few looks at the screenshots of the software. It looks like a beautiful interface. We were talking in the green room before we hit record about, um, this, this concept of using the things that you do in your agency and, and kind of modulizing or productizing what it is that you do. And then literally using those modules or those Lego blocks as building blocks to build out the plan i e the proposal. Can you talk to us a little bit? 'cause this is something that we are very big advocates for, is productizing what you do. We have a whole thing called growth blueprints, which is essentially a series of frameworks, uh, to help your team understand how we do the thing here. So we're not reinventing the wheel every time a client comes in the door. Can you talk to us a little bit about the most successful agencies that you've seen and how they go through this process of kind of productizing what they do? Speaker 0 00:06:23 You know, at the, at the core, it's really about discovering the patterns in your business. If you don't have patterns in your business, you can't productize. But I have news for, if you don't have patterns, you also can't get momentum, you know? Mm-hmm. <affirmative>, the, one of the worst feelings in the world is doing a one-off technology for a prospect or a one-off, uh, campaign or whatever, whatever kind of marketing setup that you're never gonna do again, I hated that as an agency because I want to grow intellectual capital. I wanna get momentum. And in order to do that, sometimes you have to really establish what you do and what you don't. And so, the idea of productization, you know, I was sitting at my agency, you know, I, I grew up, uh, in my agency learning how to do sales, learning how to do proposals, and I really wanted to be able to just generate a proposal quickly. Speaker 0 00:07:14 Uh, we found that mostly it was just the scope and the price that changed. And, and it was during that time that we, we kind of stumbled onto productization. And here's the basic idea how it works. Instead of just grabbing this line item description, this service offering this one from scratch and frankensteining it altogether. Right? I know so many of your agencies listening, right? Mm-hmm. <affirmative>, you do this, don't you? Right? Mm-hmm. <affirmative>, you grab an old one and just hope you got all the names correct, right? Mm-hmm. <affirmative>, instead of doing that, stop for a moment and say, when we say we're gonna do social media management, what the heck do we mean <laugh>, right? When, when we say we're going to do a blog, maybe you're doing a website quote and you have a blog line item. When we say we're selling a blog, what do we actually mean? And when you can figure that out and you can put it down on paper, all of a sudden it becomes almost like a product that you can use over and over and over you can improve on. And that's where we get back to patterns. You need the patterns in order to improve and to, to run out your theories. You need those patterns. And so that's the basic idea of productization, comprehensive line items that are reusable. Speaker 2 00:08:25 I wanna park here for a second and unpack this because our entire model now, and the model that we teach and advocate is a paid discovery upfront. We don't call it paid discovery. 'cause no one wants to pay for discovery. So we Right. We recommend that our clients package it up into something a little sexier. I personally call them digital roadmaps. Hey, let's sit down and do a digital roadmap, work out the plan for the next 12 months, right? And at the end of that, if you wanna hire me to help you implement it, happy days, we can talk about that. If you don't, if you think I'm a lunatic or you don't like my haircut, you can go and shop that strategy around to another agency, or you can do, do it yourself. I don't care. 'cause I've been paid to help you come up with the plan, right? Speaker 2 00:08:58 Right. So that's rule number one. Rule number two is then at the end of that discovery, instead of trying to, I think the old model is we get on a call, we do free discovery, we try and sell them a project for 12 grand, right? And we don't even really know what the scope of that project is. It's a website with some other bits and pieces that no one's really talked about. And then after that three months down the track, they come back to us and we add some post-launch services, like maybe some ss e o, maybe some lead capture email marketing, maybe some ad management, social media, whatever, right? So my model now is get paid to work out the plan and then get paid to deliver them a quick win. So we might start by saying, you know what? All we're gonna do is get you some traffic. Speaker 2 00:09:35 We're gonna do some social media management, some social media marketing for the next month, get you some traffic, get it to convert, start getting some leads in sales. Then we'll look at what's next. And I'll just use the example of a blog, right? If you build a blog for someone, building them a blog and allowing them to publish blog posts is the fir is the tip of the iceberg, right? It's the first step. Because usually what happens is someone publishes a blog post and a week later they're like, why is no one commenting? Why is no one, why am I not getting any leads? Why is this not actually generating, why is it not moving my business goals forward? Right? And what happens is they come back to us because we've built them a blog, and they start asking questions. And we, we go, well, you, you hired me to build a blog and I built a blog, and I'm sorry it's not getting any traffic, and I'm sorry your business model is broken, but I can't help you. Speaker 2 00:10:19 And I don't think that's a good outcome for anyone. I think the better outcome, this is where I think these line items come in. If you dial in and ask a, ask a client why, and I had this exact example, this client wanted to go all over on social media. I'm gonna go all in and do the omnipresent Gary V model and be all over social media. I'm like, dude, it's you and a va, right? You, you haven't got the budget all the time. You're just gonna burn out. What do you actually want? I want more calls here. He's a coach. I want more calls booked in my calendar. I'm like, okay, man. Well, you've got a Facebook group, you've got a great following on LinkedIn. Let's just get you a, a really highly trained appointment set to go through your organic social media audience and book calls, right? Speaker 2 00:10:57 Yeah. And that's working. And guess what? He hasn't had to post any new content on social media. Yeah. So I think if you look at a blog, for example, you could break that down into probably six, or I could break that down, probably six or seven line items, right? Right. It's a local, like there's, there's the blog, but then there's the content marketing strategy, and then there's the content repurposing, and then there's copywriting, and then there's lead capture, and then there's email nurture once the person opts in. So if you look at what you've got in your business, and the reason I'm, I'm kind of ranting here, is because anyone listening to this, if you look at what you do for your clients, I guarantee you have four or five times the amount of line items in your business then you think you have, right? You just need to break them down into bite sized chunks. Yeah. Speaker 0 00:11:40 Yeah. I, I agree. And, and Troy, I I'd say whether you write proposals or you write scope of work, that's really where once you get to the scope of work, because when I say proposal, that's really what I mean. It's outlining your services, of course, some biographical information terms, et cetera. Mm-hmm. <affirmative>. Um, but, but once you get there, I, I, you know, as, as you kind of go over that example, what I think of is, you know, I could have a blog line item and it's a fixed thing that's defined. I define what's included and smart pricing table, one of the cool features is I can have upsells inside of a line item. Imagine like a related blog posts that show underneath or, um, social media integration or whatever. And you, but then you could also, Speaker 2 00:12:21 Like an order bump. They just like tick the box like an order bump, right? Speaker 0 00:12:24 Oh, yeah. Yeah. That's totally what our software does. Completely. That's great. And I've seen people say they have a 25 grand max sign with me for 34, so I I give them, give 'em freaking options. That's another big idea. Yeah. Uh, but, but, uh, finishing the thought here, I like to do, at my old agency, I would have a section in the scope of work or the proposal that said additional items for consideration. And I would, I, I would have something like content marketing or blog promotion strategy or something like that, so that even if they don't want it just now, um, they, they can educate themselves in phase two. It in their head now they might want it now. Okay. And so I want to explain it to 'em. But here's the thing. As c, a lot, a lot of agencies are 20 or under people. Speaker 0 00:13:09 A lot of times the CEO's doing a lot of work. Other times it's, it's really big, you know, and there's a lot of salespeople involved. But no matter what the case, you're freaking busy. Mm-hmm. <affirmative>. And if I have to, like, a lot of times I can't find 15 minutes to do this quick little task, let alone two hours for this proposal that, or scope of work that really needs my attention. Mm-hmm. <affirmative>. Well, here's the, here's the thing though, Troy, if I am over time building out a library of line items, all of a sudden I can add two or three upsells from my library in seconds. Speaker 2 00:13:41 Mm-hmm. Speaker 0 00:13:41 <affirmative>. And that, because you can do that. You actually will. And, and because you actually got it on there, it's amazing how many times people want some of your services and will pay for them that you had no freaking clue. Mm-hmm. <affirmative>, we found that Speaker 2 00:13:57 Over. And that's right. Because if you don't, if you don't make the offer, they don't, even though it's there. And if you, you know, I love the related post thing, right? That's a great example. It's a great example of chunking down what you do into products. So we build you a blog, would you like, at the end of each blog post to have related posts? Because that keeps people on your site longer and increases the chance of conversion. Of course. I would like that. Well, that's an extra $495, right? Yeah. And we know that internally it might take us 12 and a half minutes to configure that and set it up, but to the client, it's valuable. So if we don't line item it out, they expect us to include it. They just go, oh, by the way, how come there's no related post at the end of the blog, like I said on all these other blogs? Oh, 'cause you never asked, because I never offered, and we never had that conversation. Right? And I think a lot of agency owners undervalue what they do because they just go, we're gonna build you a blog. And they throw all the bells and whistles in, and then they realize that the project's just not profitable because they've overdelivered because we're inherently insecure about the value we add, because I think we're dealing in ones and zeros not tangibles, right? Speaker 0 00:14:56 Yep. Yep. It's so important that your line item has guardrails and, and it, it's mm-hmm. <affirmative>, I love the idea of patterns. It, how this works is I do a blog, I sell it to a customer. Now I have an hypothesis about how this is gonna go and what things they want. And, and so I've got this line item, okay? Mm-hmm. <affirmative>, I sell it to 'em. We make one 20 an hour instead of one 50 like we were hoping, okay? Mm-hmm. <affirmative>, I, I'm asking the question, what went wrong? Why was I not profitable on this particular line item? And I go back and I say, you know what? We're just not charging enough for development. I upped the base price a little bit. Or it was, it was actually this upsell inside of the line item and or we gave away this thing for free. Speaker 0 00:15:39 Let's part that out of the base line item, add it as an upsell inside the line item and charge an extra 300 bucks. We would've been profitable. Mm-hmm. <affirmative>. Um, when, when you do that constantly, it has such a profound effect. You know, at my, at my old agency, we made, we made millions and millions, uh, uh, over the 12 years that I owned it, I like to share, we had $3,500 of non-payment in, in 12 years. And I think so much of, so much of that was, you know, I I, I like the, you know, I can't remember, I dunno if it was a Jim Collins book where he talks about a runner who's like straining his cottage cheese for some reason. 'cause there's some efficiency. Anyways, I love geeking out on that stuff like crazy. And we did that with our proposals, just like we're talking about here. But you're, you're building momentum over time. You're building a system so you don't have to start over every time. Speaker 2 00:16:31 The thing I like about line items is it's then very easy to then direct the team to say, here's what we are doing. We are integrating the blog with MailChimp. We know what that looks like. That's what the client's paid for. We know how long it takes. Here's the task list in click up or Asana or whatever we're using. Don't reinvent the wheel. Don't be too cute by half. Just follow the process, get the thing done. 'cause that's what the client's paid for. Because the biggest challenge I have seen in the agency business over the last 150 years that I've been doing this, is the discrepancy between what the client expects and what the team is delivering, even if it's a one man show, right? Right. You get halfway through a project and for some reason you've forgotten the conversation you had with the client. Speaker 2 00:17:18 The client's expecting the client's heard about other things from someone else. They're really excited. They see the first draft. They're like, where's the membership area that we talked about? And you're like, we never talked about a membership area. Uh, and you have that sinking feeling in your gut that their expectations are now not being set or managed or met. And I think these really detailed broken down individualized line items make it super easy for an account manager to go, Hey, the team's delivered on exactly what we promised. Now, nice little segue here. If you are struggling with your team developing stuff on time and within budget, and you have capacity issues, uh, E two M Solutions are the sponsor of this podcast. They are the exclusive sponsor of the Agency O podcast. They have an amazing team. I think they're up to 180 staff now that can help you with all things WordPress development, ss e o. Speaker 2 00:18:07 They do some copywriting. I think they also do some design. They're completely white label. So they will project manage your project. They will work in your tool, so in your click up or Asana or in your Slack, wherever you want them. And they will deliver outstanding top quality work. We've got a bunch of clients working with them now, and the feedback has been amazing. Just haven't heard a bad thing about them. Manishh obviously came out to our event in the Gold Coast last year, uh, sorry, earlier this year. And, uh, we spent some time together and we just have such an alignment of values and what we're trying to achieve. And if you're using something like Smart Pricing Table to scope out work for client, then you've got a very solid, clear, distinct, tight brief that you could give the team at E two M to get that stuff delivered for you, which allows you to increase your capacity, serve more clients, and grow your revenue. So little plug there, E two m, go check 'em out. I think you get a discount on your first month. Speaker 0 00:18:56 Um, I, I like to say, you know, I apply this principle to limitations on a line item, but also to your contract. But, um, clauses are like bats. Um, uh, I, I like putting 'em in there. The idea is, is, um, I don't want to hit you, but get away from my wife. Right? Like, I, we never use clauses, we never execute on them, or we were never hard lined, right? But they give me something. So for example, <laugh>, it <laugh>, um, you can use that if you want. Speaker 2 00:19:26 So I'm totally gonna steal that, and I'm gonna credit you every time I say, I don't want to hit you, but get away from my wife said, my friend. Speaker 0 00:19:32 Yeah. As long as, as long as you tell the people that schedule a demo at smart pricing table, then you can use it. Speaker 2 00:19:38 So, Speaker 0 00:19:39 So like on the line item level, one thing I used to do all the time, and Troy, I never got pushback on this hardly ever. I, I would have something like a blog that we're charging 3000, $4,000 for, and I would say something like, there's a max of, after I outline the line item, I usually use a bulleted list of what's included. And then I'd say, note this line item is limited to a max of 30 development hours. And that was just because, just in case I forgot <laugh>, you know, other, these five other things that you thought of and I didn't, it's limited to 30, and I cannot tell you how much that saved my butt. And going back to the, the bad analogy, I don't have to swing the bat at 10 hours. Mm-hmm. But what I can say is, listen, Troy, here's the deal. Speaker 0 00:20:23 Um, or, or 30 hours, whatever I said, um, we actually have a limitation of 30 hours on this. Now, I don't wanna just pull the plug. I want you to be happy, but I do need to cut this off at 33 hours. So I've, I'm giving you like a three hour warning here. We really gotta reign it in. And then after that, we'd have to go hourly. You manage your expectation. I mean, people like expectation management and profit are so freaking connected. If you manage, I can't. So many times it's like, if you just manage expectations, well, you can go to your high hourly rate post normal project mm-hmm. <affirmative> and all of a sudden a a client that you thought was a bad one, what you know, is actually a fantastic customer. And we were bad because we didn't define things. Mm-hmm. Speaker 2 00:21:06 You know what I'm realizing? Just looking at some of the sample proposals here on your website, right? Uh, if you go to smart pricing, and then click on the sample proposals in the menu item, there's the first one here is a website, an ss e o proposal for Roger's Landscaping. What I really like is the, the, first of all, it might, you know, you could just change the word proposal to scope of work. 'cause there's the cover page, and then the second page is scope of work, right? So, I mean, I just don't like the word proposal, so I would just change that. But anyway, that's neither here nor there. What I like about this though, is, and what I'm gonna say to everyone listening to this, even if you don't use this platform to send a proposal to a client, I think you should use this platform to build a proposal. Because what it will do is it will force you to understand how much does it cost me for my team to build a homepage and about page, a service page, a blog, and integrate it into active campaign. That's what it costs me. Here's my margin. So this is the pricing on these line items. Yeah. Speaker 0 00:22:09 Right now you're stealing my talking points. Troy <laugh>. Speaker 2 00:22:12 Oh, sorry, sorry. I do that. I can't help myself. I'm caffeinated. I'm almost 50. I don't care anymore. I'm excited, I'm enthusiastic. I'm Australian. Come on. Hit me. Speaker 0 00:22:23 It's, it's so, it's so true though. I, I love the saying, if there's a, if there's a mist in the pulpit, there's a fog in the congregation, right? If you don't know what you're selling, if you haven't slowed down to say, what is this freaking offering, you're your, your customer has no clue. Right? I, I have a, a recent, not to plug my software too, too much, but, um, I have a, a customer who recently put on our G two reviews, he said, it's, it's almost like a game. Using the software helped me understand my offerings so much better than I did, right? Yeah. When you, when you start saying, I'm gonna think of my, um, my offerings more like products with descriptions and, and handles to grab onto so they can't go look crazy and have upsells, right? You get so much clarity, you can start shutting things down that don't work for you. New line items that work for you, like, like a competitive analysis. Maybe you don't do that and all of a sudden you're like, oh my goodness, what would that take? This customer wanted it. I could define this. I'm gonna define it in smart pricing. Table, fill everything out. And, and you're like, oh my goodness. Competitive analysis is our most profitable line item. <laugh> <affirmative>, Speaker 2 00:23:32 What, Speaker 0 00:23:32 What were we Speaker 2 00:23:33 Doing? Or, or paid discovery is a great example as well. Like, let's, let's sell paid discovery for whatever the price is, work out what it costs. You work out what your margin is. And then you, first of all, you realize that people that pay for discovery actually have a much higher chance of converting to an ongoing client. But that's a whole other conversation. But then you might realize that, hey, I could just do pa like I have a client who just does paid discovery. It's all he does. He actually doesn't do it. He hands off the client to another agency. Yeah. If they want to implement, but he just does paid discovery, that's great, because that's his sweet spot. This is super interesting. Um, so now most of your clients are, you were saying like 90% of your clients are marketing agencies. Is that right? Speaker 0 00:24:06 Right. Yeah. I kind of, I, I like taking a really small idea and just going nuts with it. <laugh>. I, I like niche. Yeah. I like specialization. So Speaker 2 00:24:14 Do I. So do I I'm surprised that other service providers haven't discovered you and, 'cause I know like some of the other, I know some of the other owners of some of the other proposal platforms and like, they, they might've started out with agencies, but now they're like, agencies might be 15% of their client base, and it's really like financial planners or accountants or, uh, you know, even, even even local business, like even like Home Remodelers and Reno, like kitchen remodelers are Yeah. Are using the platform. Is is it that you don't want those clients? Or is it just because of the world that you've grown up in and that you come from an agency that you've attracted other agencies? Speaker 0 00:24:47 I, I love agency life. You know, when I sold my agency, I had five hours of required work per week, and it was all finance that I didn't want to outsource. We, I had, I talked to agency owners that hated their life all the time. I, I freaking love my agency. We were, we were, uh, top three web design agencies on Clutch, do co for three years. Mm-hmm. <affirmative>. I was, I actually held the top spot for a couple months, and then someone bought me out. But we were there without the promotion. We were, you just rated us by pure rating. We're top three. So part of it's a personal passion. I just know what agencies go through and the pain of proposal writing, but I also, I just love, you know, my company's not as big as PandaDoc. Maybe that's a surprise to some of your listeners, right? <laugh>. Um, I can't compete with PandaDoc, but I can compete like crazy with PandaDoc in a freaking vertical. Um, and I like, I like the idea in marketing that to most people, your noise, but to the select 1%, you're the freaking hero, right? Speaker 2 00:25:44 Yeah, totally. Speaker 0 00:25:45 We have other industries, but my commitment, at least in the short run for the next few years is, is likely gonna be marketing agencies. You, your, your market defines your roadmap. And I don't wanna, I don't want kind of a so-so roadmap for my customers. I want a killer, right? Like we have a surcharge feature. Yeah. Let's say I have a $30,000 project. There's a setting to where I can add 20% across the entire proposal, all behind the scenes equally applied to every single line item. Some industries don't care about that. Uh, there's actually an acronym I, I, i, I say, um, in my demo, I say three reasons for this are, um, high maintenance customer, um, high risk project or high demand agency. That's why you'd want to increase it by say 20% behind the scenes. Well, I have a feature for doing that specifically. And so Speaker 2 00:26:33 In Australia we call that the dickhead tax. That's what we Speaker 0 00:26:35 Call, there's a lot of different You should, yeah. There's a lot of, Speaker 2 00:26:38 You should call it, you should just say, apply dickhead tax in the background and it just adds 20% to Speaker 0 00:26:42 Everything in America. We're, we have a, it's called like pita, uh, yeah, that's what it is. We just don't say that. We don't say mean words Uhhuh, but the acronym's mean So <laugh>. Speaker 2 00:26:51 Yes, yes, yes. We live on mean words here in Australia. That's all we talk about. 'cause we're a nation of convicts and we are quarrymen and we are very good at digging up the planet and selling it off to other parts of the world. Um, now, uh, I, the other question I had for you is I wanna talk about the roadmap and what's coming up. And I specifically wanna talk about, and I didn't brief you on this, I wanna talk about ai. Yeah. I've been using AI a lot over the last few months, and I have to say, man, it is bonkers good. Like it is, the use cases are everywhere. What's the plan? I've gotta ask, what's the plan? Is there a plan to use AI to help in the kind of, because a lot of people might be good at the thing, but they might not be good at explaining the benefits of the thing. And I imagine there's a use case for something like a chat G p T integration at some point to go, how I can take this and I can make it sound like an Australian car salesman. Yeah. Speaker 0 00:27:41 Yeah. Well, we, we use the tiny editor for our text editor. I, I have a few thoughts on this. We use, we use the tiny editor, the former, uh, WordPress editor for our text editing, and they actually have an AI plugin that we're exploring. So we could have something very, very soon. Um, long term, I think we'll make something even better that's more comprehensive. Um, but the thing about it is, if you look at some of my sample proposals, especially the branding and print, uh, sample proposal on our website mm-hmm. <affirmative>, it's all freaking chat, G B T, um, I have a logo design line item. Go check it out. It's all written by chat. G B t I just had to copy and paste it. Okay. So there's a small little, little gap there. But, you know, I, I would just say something like, Hey, hey, chatty Chat, or whatever your nickname is for chat G P T. Speaker 0 00:28:24 Um, I, I want us, I want to, uh, pitch someone on a logo design. Um, uh, I, I, I would like to give them three concepts, but I'd also maybe like to have some upsell opportunities. So could you gimme, uh, three upsell opportunities on this? Um, I'm gonna give them these three formats. I'd like them to be able to respond in two weeks, or, sorry, the whole thing has to be done in a month and they need to get back within two days. So please give me, start the line item with a summary sentence that's no longer than two sentences. Give a bulleted list of what's included, and then tell me maybe some limitations I could consider. And then, and then gimme three ideas for upsells. And I mean, look, look at the, look at the logo, uh, design, um, line item on our website. Speaker 0 00:29:06 And literally I did exactly that. It, it built it out crazy. Wicked, uh, quick. And then, and then I just love, like, this is, oh, this is nuts. If you wanna do a new service, like your customer says, can you do com competitive analysis? And some of your agencies are like, well, I do web design. I don't really know what you mean by that. <laugh>. It turns out when you actually figure out what it is, it's like, this is super easy. Like, like mm-hmm. I just mm-hmm. Like, what is, you just define the scope of it. It could be massively complicated. It could be really simple, right? What, what are the people, what are their back links? All that kind of stuff. Well, you can go to chat G B T and you can say, tell me more about this. Tell me some of the pitfalls that could happen, and then tell me what it should be included. And you're, you've got a massive headstart on that offering. Um, and a lot of the lessons you'd normally have to learn yourself, you've already have baked in because of chat. Totally. Speaker 2 00:29:58 Big takeaway for me there is, I didn't know you could nickname chat, G p t, you can give it like a pet name. Can you, Speaker 0 00:30:03 I just call it, I just say, when I'm talking to my friends, I'm gonna put that into the chatty chat. I don't, I don't know, I don't actually call it chatty chat. I, I actually try not to be too personal. <laugh>. Like, I don't, I don't even say thank you. Like, I feel bad, but it's like, I'm pretty sure you don't have feelings yet. And this is gonna be fine, <laugh>. Speaker 2 00:30:21 It's funny, I, even though, because I'm an Australian, I'm quite opinionated. I am super polite with chat pt. I say, please and thank you. And, and it, it's, I just feel weird if I don't do it. Otherwise, it's, uh, yeah, it's an interesting, uh, interesting time. It's a great time to be alive. I mean, you know, ai, we, we are exploring AI for doing things like, you know, I, I saw a video the other day of a two camera set up podcast that was edited in 47 seconds. It was a 45 minute long video edited in 47 seconds with a plugin for Premier called Auto Pod. And it basically just switched between cameras based on who was talking. I'm like, man, that's like an hour and a half editing work just gone, right? I mean, you know, audio podcasts, you can just chuck it into the browser now and it will be edited within a couple of seconds. Like, I mean, max, who's in the green room listening here now, who's our video editor, he would argue, and rightly so, that it's not going to be able to edit the YouTube videos that we publish, because there's a lot of thought that goes into the B roll. The titles, yeah. The edit. There's a lot of, we try and do things for humorous effect, so it's not gonna replace that. But just for rudimentary Yeah. Like content repurposing and stuff. I mean, it's just, yeah. It's making everything so efficient and fantastic. Speaker 0 00:31:28 Writer's block ideation. Like I just read a LinkedIn post that said, said, you know, chat, don't, don't fear losing your job. Just figure out how to use ai. Right. Figure out how to use it. Correct. And get really good at prompts. Like, like, you're gonna write a blog post. Okay, well, it's not gonna do all of it for you. You, you can tell generally, and it's getting better and better. Mm-hmm. Um, but, but, you know, when I'm doing something with chat, I'll, I'll say, um, you know, I might do like five different, like, responses after initial draft, and I think mm-hmm. <affirmative>, that's the power of it, um, to, to really, uh, streamline that. So mm-hmm. Speaker 2 00:32:04 One thing I learned recently was the use of variables with chat G P T, which I didn't know you could use. So you put something in, you say like data and then colon, and then you write like a whole bunch of context. And then the prompt is using square bracket data from above. Please summarize this into a blah, blah, blah. And it just looks at the variable above, which is kind of blown my mind because you can have all sorts of diff you can just like throw variables in at the start and then at the bottom have a prompt with the variables in where you want them, and it kind of builds out a whole framework for you. So anyway, it's super exciting. Super interesting. Apart from nerding out over ai, what's on the roadmap for Smart Pricing Table over the next six to 12 months? Where are you taking this thing? Speaker 0 00:32:44 Well, the, the goal is to be true to the name. So my first allegiance as far as product roadmap is to add additional features. So, uh, things like, um, volume discounts for quantities are things that we, that we have that on our radar. The, uh, quick, quicker building on the backend. So, um, some bulk editing features that can help build things quicker. Um, to, to be candid, we, we've really, we've gotten to where the vision that I had, so I built this for my agency six, seven years ago mm-hmm. <affirmative>, and I took it, I started taking it to the market two years ago. We've recently just gotten to the point where the vision is basically complete mm-hmm. <affirmative>. And so I'm gonna be looking to my agencies to really understand where to go, where to go next. Um, we've got a lot of kind of smaller features. Speaker 0 00:33:31 We're, we're beefing up our integrations. I certainly see, see AI in there. Um, but I'm excited that the, the model is really working. It's so Well, Troy, I I wanted to answer this question in a while back. If I excluded all of my non-agency customers, what's our close rate across all agencies where the proposal or sows actually sent and mm-hmm. <affirmative>, it blew my mind. Um, 42% close one for sent proposals on the system. Wow. All almost one out of every two. That's good. Yeah. I had a lot of customers that wanted to use it. Back at my, when I owned my agency, our customers were like, what the heck is this? I want to use this. And I had competitor, other, other friend agencies that wanted to use it. And, and we had this philosophy, but I didn't know how would it serve the market, the bigger market, other agencies if we were to open it up. And so, uh, pleased that it's done so well. Um, and our and our vision, other, other folks can take advantage of, Speaker 2 00:34:29 Um, I'll, I'll augment 42 percent's. Good. And it's funny 'cause I've put together a presentation recently that globally, the conversion rate of proposals is between 25 and 40%. So 42 percent's above the average, which is good. I will say this to anyone listening, if you sell paid discovery first before you put in a scope of work for a bigger project, you'll convert at 75. Yeah. 80%. Yeah. Right. It's, it's just, it's such a no-brainer. And you could use something like Smart Pricing Table to pitch them paid discovery, or if you're like me, you just tell 'em on the phone and they give you their credit card, and then you use something like this to pitch 'em the final scope of work, you conversion rate's gonna be, you know, 80% plus. So, and in terms of the, where, you know, where do you, like, what's the, what's the, how big is the team at the moment? Are you, like, are you developing this thing yourself? Are you writing the code? We're, Speaker 0 00:35:15 We're a startup. We're, we're super stable. I mean, at this point we've got lots of agencies using it. I'm, I'm not the developer. Mm-hmm. I have, uh, other folks in involved in the company mm-hmm. <affirmative>. But it, it's, we've gotten past the point where the app is very, very uncommon that we find a bug. Um, and it runs super, super smooth. Speaker 2 00:35:32 So what's the vision, not only for the product itself, but for the team over the next sort of 12 to 24 months? What are you excited about? Speaker 0 00:35:41 You know, I really love, um, putting a box around what you do and what your passions are. Uh, I like cutting things out when, when you define what you do, and I, I don't, I'm probably just distill this from Jim Collins, good to great, or something like that. Mm-hmm. But when you define what you do and what you don't do, it's so powerful. I want mm-hmm. I want to absolutely slaughter this concept of productization inside of agencies, and I want to create the best, uh, proposal software or s o w software I can for the agency vertical. Mm-hmm. I want to keep the roadmap going, keep it going strong, adding more and more value. But I'm gonna know who my customer is. I'm not interested in serving every industry. There's a bigger banner. It would simply be professional services. But right now, I just love agencies. Mm-hmm. Speaker 2 00:36:29 They are a very unique, um, business model. And I think without productization, I've taught, I've, you know, I mean, I've been coaching agencies for a long time. I've lost count of the amount of times I've been on a Zoom call with an agency owner who's in tears because they wanna burn the whole thing to the ground because they're overwhelmed and they can't see a way out. And they've built this, they've built this Frankenstein of a business that is now eating them alive. And it's because they don't have any productization. Because every time a client walks in the door, they're reinventing the process. They're building custom bespoke solutions. And that business model was never meant to scale. And so, I totally hear you. I think it's one of the things that we talk about a lot is productizing and we, we have a methodology called Growth Blueprints that we help our agencies do that with. Speaker 2 00:37:12 And as I said before, and I'll say it again, I think even if you don't use Smart Pricing Table to send your clients anything, I think you should use it to map out what it is you are doing and so that you understand your costs to deliver this thing, and you can work out your margins and then you know how much you should sell it for. Yeah. And then if you want to use Smart Pricing Table to send that to your client, that's a bonus. But I think just as an internal tool to actually figure out how much shit costs and am I profitable on this thing, and then removing the 80% of the stuff that you're doing in the agency that's just not profitable that you just do because you feel like you should do it because some one client asked once. Right. Right. So you talk about doing less and reducing, and that whole idea of like reductionism to actually figure out it's the Jim Collins, like, this is the hedgehog effect. This is what we do, that we are the best in our world at it. We are super passionate about it. The market will pay for it. Let's just get really fricking good at doing that. Yes. And let's not run ads for clients because we don't like it. We're not good at it, so let's not do it. Love Speaker 0 00:38:07 It. And, and you, and you, I like, I, I tell my kids, I've got eight year old twins and a a five year old. I don't tell my five year old as much, but when you're stressed out, I want you to take, uh, uh, I want you to pause for a second and I want you to ask, what's actually stressing me out? What's contributing to this? 'cause it's probably something, it's probably not ethereal, right? Why do, why does agency life stink sometimes? Well, you know, it's, a lot of times it's because projects are going over like crazy or mm-hmm. <affirmative>, as a, as the owner, owner, you feel totally trapped. Listen, one of the most amazing things I've ever done is I hired a salesperson and I got outta sales. Mm-hmm. For the last four years of my agency, I was involved in two sales deals, period. Speaker 0 00:38:48 Where, where the customer actually knew who I was or was talking to me, right? Mm-hmm. <affirmative>. Mm-hmm. <affirmative>. Here's the thing. As an agency owner, you don't want to let go of sales because you don't wanna screw up the pricing. You don't wanna screw up the deal, the expectation management. But when you productize, when you have a catalog, all of a sudden a non-technical salesperson who's just good at being mm-hmm. <affirmative>, that selling can start assembling a proposal and selling and focusing on selling all day long. 'cause you can't, I would guess that for a lot of your listeners, that is one of the biggest pain points is I don't have any freaking time. I feel like I'm drowning in sales and the worst feeling in the world, I'm losing that deal because so and so needed to talk to me for 15 minutes and I couldn't get anything out the door. Right? Yeah. Yeah. Where's the stress coming from? I think that's a huge, huge piece. Mm-hmm. Speaker 2 00:39:38 We have cl, I'm coaching clients right now who are hiring salespeople, and the big fear they've got is like this, this sales person will not know how to scope this out. Yeah. They won't know how to put a proposal together. They won't know how to sell them because all the intellectual properties in my head, right? Speaker 0 00:39:52 Yeah. Get it outta there, <laugh>. Speaker 2 00:39:55 Get it outta there. Here's an AI power tip for you. So I'm using, uh, we currently have started and are currently continuing to build out our knowledge base in notion for various reasons. And there are a whole bunch of chat bots, uh, softwares that you can plug into Notion. You can basically train your own chat, G p t style chat bot that uses the open ai, uh, a p i and you can train it on your Notion database exclusively. So it just is trained on your notion documentation, right? So our sales team, the plan is that we'll roll this out, and some of these chat bots have a direct Slack integration. So imagine you're in Slack, you're on a sales call with someone and you don't know how to answer the question, and you just ask a chat bot directly in Slack for an answer, and you get an answer from the company, you get a chat G p T style answer, but specifically from the company documentation in notion, right? Speaker 2 00:40:41 Well, every time you put a line item in your proposal, add it to an notion as a line item with a name, a description, and a price. And then when you're on a call, just ask chat g p t or ask your chat bot to build a proposal for you based on your own internal knowledge base. Yeah. Yeah. That's, I mean, now we're talking about, now we're talking, and this is the thing about AI is that I think it's finally the technology's here that we can scale a service-based business that is based on, even though we're productizing, we're still providing a service, but it's based on intellectual property. It's been very hard up until this point to scale an intellectual, intellectual property based business. Right. Because how do you get the knowledge out of your head and communicate it? Chat GPT is amazing at communicating if you give it the right information and you train it on the right data. Speaker 0 00:41:28 Yeah. Yeah. That, that's great. And, and I, I always like to say too, you know, there, there's that facet, and then just because someone makes a proposal doesn't mean they get to send it. Like, I would, I would have my sales guy create the proposal and then I'd approve it. Mm-hmm. <affirmative>. But here's the magic. After you productize enough and every, every time you eat concrete, every time you bump your head on a project, you're, you're going back and you're fixing things. What can happen, and this happened for me after like six months, I just said, look, we're good <laugh>, because I knew he's not gonna mess up the trunk. I made the trunk, my team made the trunk. We, we made most of the tree. He's just maybe tweaking the line items. He's, he's adjusting a branch or a leaf, and unless he does something big, and he'd tell me, I don't really care mm-hmm. <affirmative>. And so I've unleashed him to close more deals. Mm-hmm. <affirmative> without me, he's got a product catalog. If he doesn't understand something, he could ask my developer or someone else. Right. But he can, he can go on his own. And man, the feeling of the company closing deals is not getting bottleneck on me, on on me, but someone who thinks about that all day long, ugh. Speaker 2 00:42:38 Yep. Speaker 0 00:42:39 And none like it. Yep. None like it. Yep. Speaker 2 00:42:41 Totally. I agree. Hey, uh, this has been a super, I'm conscious for everyone's time, including yours. This has been a super interesting conversation. I'm glad, I'm glad I got outta my own way and was open to this conversation. I'm still gonna say people shouldn't send proposals. They should send statements of work and they should sell paid discovery first. But I love everything that you're talking about here in terms of productization. And again, I'm gonna say people should go and check out smart pricing, sign up, take it for a spin, and at least use it to build your own products in there and work out your margins and make sure you're bloody profitable. And then you can brief your team and say, this is exactly what I've promised the client. So this is what we're gonna build. It really helps you tighten up that scope and manage those expectations. Smart Pricing, is that the best place for people to get in touch with you, Joe, or do you have another way people can reach out? Yeah, Speaker 0 00:43:26 That's, that's the best way. Go to smart pricing A few, a few options on there. I do have a free guide, the Profitable Proposal Blueprint. Um, uh, it's five principles that have just killed it for, for, uh, for me and for my agencies. I or my customers, uh, use these as well. I also have a free demo, uh, along with our free trial. And the demo is kind really cool because I can personalize it. Um, you'll actually be meeting with me and I can personalize it for your specific, uh, agency. And I also provide some consulting on the free trial site. So even if you're tire kicking, you're not sure, schedule a demo and I'd love to chat with you personally. Speaker 2 00:44:03 Love it. Awesome. Thank you for joining us on the agency. I appreciate your time and, uh, looking forward to keeping the conversation going. Speaker 0 00:44:09 A blast, Troy, thank you. Speaker 2 00:44:12 Thanks for listening to the Agency Hour podcast. And a massive thanks to Joe Rd. Sir. Super interesting stuff. Really looking forward to seeing how our agency clients use smart pricing Be sure to check out smart pricing If you wanna build your own products, map out the scope of projects and ensure your agency is profitable, we'll leave a link somewhere near the show notes to go and check that out. And a huge shout out to E two M Solutions for sponsoring the Agency Hour podcast. Visit E two M at e two m That's e the number two m If you need to expand your capacity and bandwidth in order to serve more customers and generate more of that sweet, sweet recurring revenue, we'll provide a link under the podcast here for you to click on. We'll also leave a link to chat with our team. Speaker 2 00:44:58 If you wanna work with us to grow your agency, I can guarantee you are sitting on your agency's most valuable asset and you're just not getting paid for it. Also, tickets to Mcon are selling fast. We're gonna be in Fairfax, Virginia this October. This is your chance to surround yourself with Mavericks and work on your agency in person. We are gonna be talking a lot about how to scale your agency with ai. Our community has been described as phenomenal for good reasons. So book your seats today and come and hang out with us in Fairfax, Virginia before they sell out. Okay, folks, don't forget to subscribe. Please share this with anyone who you think may need to hear it. I'm Troy Dean. Grow a Mohawk. Don't buy a motorbike.

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