The Hard Stuff About Building an Agency, Defining Success, and Solving for Both with Paul Roetzer

Agencies Dec 5, 2017 6 minutes read

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    Peter Caputa

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    There are many things you can point to as evidence of why Paul Roetzer has been so successful at most things he tries his hand at.

    There’s the agency he’s built, PR 20/20, first as a vehicle to solve a gap in the marketplace for his wife’s business, now a platinum HubSpot agency partner that was first in that ecosystem ten years ago.

    He has a successful speaking career that takes him around the globe.

    He’s also written two books that have become must-reads in both the marketing and agency spaces.

    More recently, he launched the Marketing Artificial Intelligence Institute which in just over one year has already generated significant traction and attention from fortune 500 companies, investors, and marketers of all types.

    But at his core, Paul is just a curious guy that approaches problems scientifically.

    “I love figuring out stories to be told,” Paul said. “I think AI is this great unknown. I’m motivated by that because I don’t know where it’s going and I’m intent on solving that. So every time I go give a talk or go and write about it, it’s my own self-discovery process that I’m sharing.”

    Whether it’s agency services, simplifying pricing, or launching a vehicle to solve artificial intelligence for marketers–it’s ultimately that process of self-discovery that has enabled his success in so many areas.

    I was lucky enough to sit down with Paul for over an hour recently to pick his brain on all things marketing and business-related. From starting up, to defining his version of success, developing and retaining talent, and so much more.

    This episode was extra special, as Databox CEO Pete Caputa, who built the HubSpot Partner Program that Paul and his agency were first to join, hopped on as well to take a stroll down memory lane.

    Below are just some of my favorite nuggets from our conversation with Paul. (All quotes attributed to Paul Roetzer.)

    On defining success

    “You have to know what success looks like to you and you have to be comfortable with that decision.

    For me, success has never been, ‘how do I become a 10, 20, 50 million dollar agency.’ It was more, ‘can I live my life and spend the time with my family I want to spend and retain and develop talent.’ The growth has almost happened to the level that I felt necessary to enable me to do those things, whereas the growth itself was never the priority.

    I’m not sure I ever want to run a 50-person agency. My mind may change over time, but I don’t know that’d I’d be happy personally.

    I’ve always built the business and grown it to fit the lifestyle I wanted and that enabled the employees to have a true work/life balance. Everyone goes home at 5 o’clock every day. I don’t expect people to work nights and weekends unless they want to. You make sacrifices on the growth side to enable that.

    What kind of agency do you want to build?

    “I think when most people start from the ground up, it’s to go from being a professional marketer, which is why you decided you could start a business (because you’re a pretty good marketer), to when you get to 5-10 employees, you actually have to run a business. People’s livelihoods depend on you.

    The general rule of it costs twice as much and takes twice as long when you build a business, it’s the truth.

    I can’t tell you how many times I ran through the funding I had in place, which was just debt financing.

    There was one period, it feels like yesterday but was probably about eight years ago now, that I was 24 hours away from liquidating everything I had because I believed so heavily in where we were going. But the cost you incur to build and to try new things (we were always experimenting building software and things like that, I did all the research and was like, ‘okay so if I cash out all my retirement savings how would this work?’ I was ready to pull the trigger and then a couple things came through and I luckily didn’t need to.

    It’s the reality that you’re no longer a marketer. You’re a business person. You have to make really hard decisions all the time.

    In my case, I tried to build the company around making it a career destination, not a stepping stone.

    As you keep growing there are probably different phases you go through from 10-20, and 20-50 and beyond. You have to make choices around what kind of agency you really want to build.

    Becoming a business person, and not just a marketing professional, is the hardest transition for most people.”

    On the evolution of pricing

    “I launched the company in November of ’05 and it ended up having 105 services in 19 categories. And there were three tiers, so there were basically 315 SKUs that all had set pricing with them. It took me over 600 hours to build the initial service and pricing guide.

    I remember in a meeting I had with Brian and Dharmesh, Brian said something to me about $10k a month. Keep in mind that when I launched our first service packages tied to HubSpot, our [PR 20/20’s] enterprise package was $2,999 a month.

    Halligan said, ‘what would you do for $10k a month?’

    I said ‘I have no idea.’ That’s so much money. If a client wanted to give us 10k a month, I didn’t even know what we could do for 10k a month.

    Now, most clients are coming in at a minimum of $5k-8k, and we have clients spending between 10-15k a month.

    Times have changed a little bit.”

    On what points pricing solves for the agency

    “When you look at what it is you sell, a lot of people sell hours or projects at a fixed rate. But what I always wanted was the simplicity of software sales.

    If you’re HubSpot you sell number of contacts. Basecamp sells number of projects. Wistia the amount of video uploaded. Whatever it is, there’s a single unit of value.

    So for us, points became that fixed unit of value.

    What clients were actually buying was an allotment of points. What we did with those points would vary, but every client would pay the same for a number of points for different projects. So a blog post is 3 points, an email is 2 points, and landing page is 2 points–so it’s totally transparent to the client, but for the agency, it’s very value-based.

    For example, if someone comes to me in a crisis communication situation and I spend 30 minutes on the phone with them having a conversation that may save their company, there is no way I’m charging them 30 minutes of my time. I’m charging them 55 points because that took 12 years of me learning and doing this to be able to have that 30-minute conversation of what you should do. And that’s happened, I’ve gotten those calls on a Friday night.

    I always tell people, you’re leaving value on the table as an agency when you’re not thinking of your services in a value-based model. The points just simplify it. We’ve done it with hundreds of clients and never had a single one not understand what we were trying to do.”

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    Article by
    Tamara Omerovic

    Tamara is Content Editorial Manager at Databox. She is an SEO aficionado, a coffee addict, and a huge museum lover! When she's not working or writing, she enjoys visiting an art gallery, drinking her 5th coffee with her friends, or playing video games.

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