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#dogoodwork is not a label but a way of living.
It is the constant and diligent effort to achieve a new level of excellence in one’s own life.
It is the hidden inner beauty behind the struggle to achieve excellence.
It is not perfect but imperfect.
It is the effort, discipline and focus that often goes unnoticed.
The goal of this podcast is to highlight that drive.
The guests I have on this show emulate this drive in their own special way. You’ll be able to apply new ideas into your own life by learning from them.
We will also have 1on1 episodes with me where we’ll dive into my own experiences with entrepreneurship and leadership.
Every episode is designed to provide you with ideas that you can apply and grow in excellence in all areas of your life, business and career.
Do Good Work,
Raul
INTRO
PODCAST
raul-_1_09-05-2024_100421: All right.
Welcome back to the pod.
Today.
We have gray Mackenzie.
He is the founder and CEO of Zen
pilot, and he is a true operations
nerd in his own words, with a passion
for helping agencies build healthy,
productive, and profitable products.
Gray has built Zenpilot into ClickUp's
largest and highest rated solutions
partner, which is very impressive and
has spent the past decade helping over 2,
700 agencies streamline their operations.
He and his wife are raising four wonderful
children in western Pennsylvania.
And are always looking for new
travel and adventure recommendations.
So if you reach out to gray, hit them
up with your recommendation for travel.
And he is on a mission to help agency
owners and their teams turn chaos into
clarity so that they can enjoy healthier,
more productive and more profitable teams.
Great.
Welcome to the pod.
gray-mackenzie_1_09-05-2024_130421: Yeah.
It's great to be here.
Thanks for having me.
raul-_1_09-05-2024_100421: I like
the intention and the focus of like
profitable is good, but if you're
suffering, if your health isn't
well, if your mental health isn't
there, if you're missing out on life.
Are you really profitable?
gray-mackenzie_1_09-05-2024_130421: Yeah.
Both those things definitely
like it's all tied together.
Because you also, it's extremely hard
to build a healthy team or culture
that's not profitable as well.
And it's not highly enough.
raul-_1_09-05-2024_100421: Yeah.
Yeah.
gray-mackenzie_1_09-05-2024_130421:
To be sustainable and have
enough resiliency to get through.
Like we went through post COVID I'm sure
you've seen this, but we went through
the best 18 consecutive months in the
agency ecosystem in the last 15 years.
And then we've gone through some
of the hardest 18 months or two
years here, over the last, uh,
certainly like tail end of 2022
raul-_1_09-05-2024_100421: It's 23
in the summer that's where it was.
That was the hardest.
gray-mackenzie_1_09-05-2024_130421:
weathering those ups and downs but
all that goes together, productive,
profitable and healthy for sure.
raul-_1_09-05-2024_100421: no,
then that's a, no pun intended.
I think once you find closer to the
truth of what works in any field or
any endeavor, that's why my first
book was called productive profits.
It's like, how do you do this effectively?
I want to double click on that.
So you just give you like real case study.
Like one of my clients right now, though.
Really healthy, really well
doing, doing a good amount.
I want to hit eight figures.
they have values and like the culture,
but it's not really clearly defined
or they don't really leverage it
to make decisions, which is really
what the whole goal of culture is
a framework to making decisions.
And we had a really awesome guest how
I'll make an intro to you if you want.
And he talked about that when he focuses
on the values that he develops for his
agency, he focuses primarily, this is
just a framework to make decisions.
It's not this hoo rah, feel
good, then you slap on the wall.
How do you leverage and with
intentionality, because for our listeners
out there, if you don't know, like COVID
was a very difficult time in the, in
like for life and everyone in the online
space for work everyone was online.
So a lot of agencies popped a lot of
opportunities for digital marketing.
Everyone was online.
Everyone had the quote unquote
helicopter money, and it was very
healthy for a lot of agencies.
Even some of my clients and
some of my friends as well.
But then I think you mentioned like
the summer of 23, that was the,
hardest we're at the lowest dip
and the people are bouncing back.
How did you, or what were some of
the ways that you intentionally
crafted the mindset of your team in
alignment with not just your mission,
but how you show up every day?
gray-mackenzie_1_09-05-2024_130421:
And you're talking not
COVID specifically, right?
Or
raul-_1_09-05-2024_100421: Not
COVID specifically, but just
gray-mackenzie_1_09-05-2024_130421: Right.
raul-_1_09-05-2024_100421: cause
this was like an endurance thing.
Like you guys had to be healthy.
For the big sprints, but then also now
we're like, it's super hot and it's dry.
You're running out of water.
You're tired.
Like How did you frame
to prepare for that?
gray-mackenzie_1_09-05-2024_130421:
I think I'd say, and I think
this is true for most teams.
So if anyone's listening, like nobody or
very few founders are that intentional
about culture at the beginning.
raul-_1_09-05-2024_100421: So true
gray-mackenzie_1_09-05-2024_130421:
I think that's, just,
happens at the beginning.
I think you're probably more
intentional the second time, part
of number one is just survival.
Like how do we get to, how
do we pay the bills for this
month and get to next month?
So it's not that culture
doesn't matter there.
It's that culture is not the
main focus at the very beginning.
And that's our story too, is starting
our agency Guava Box back in 2011.
It's man, will probably fail
in a year, but we'll learn.
A ton of really cool lessons
and have good experiences.
let's just go for it.
And so it's just the survival
game at the very beginning.
This next version of Zen pilot
that we're building today has
been much more intentional.
And so that's where just
getting some reps your belt.
And this is the third iteration
of we had the agency, Guava box,
and we built a project management
software called doing bound.
We pivoted that software into
the training and consulting
businesses that Zenpilot is today.
And so this has been the
most intentional one.
a strong point of view about the type of
business that we're going to build, the
type of profitability and health, and
productivity that we're going to have
on the team and then defining those.
Goes to the Wayback Machine and looks
at the Do Inbound site from probably
2016, there's a values page on there.
And that was the first time that
we were public about our values.
They've been redefined since then.
And so this, then when we changed over
to Zenpilot and we're ready to build
a team again, one of the earliest
things we did was set out, hey, these
are the five core values that we have.
And try to build those as,
pillars of the culture.
Those are like a screen for who
ultimately the culture is driven
by the people who are here.
The culture is what we
tolerate and what we celebrate.
that all starts with who we tolerate
in the organization and who we
celebrate in the organization.
So those kind of have to be a
filter for who gets in and then who
sticks it Zen pilot and who doesn't.
And so I think finding.
And for any value to mean anything,
there's gotta be an inverse of that value.
That isn't an obvious, Hey, I'd hate
to have that, person on my team.
Obviously we all want
people who are honest.
That's not, no one's yeah,
I'm building around dishonest,
raul-_1_09-05-2024_100421: Yeah,
it's not really about it, yeah
gray-mackenzie_1_09-05-2024_130421:
So those like systems thinkers.
Being a core value, they're
great, awesome people.
They're a little bit more chaotic, but
they're incredible creatives and like
really incredible at blazing trails and
solving problems for the first time.
And those people have a ton of value, but
That's not the value that we're going to
bring to our clients is to have a team
full of, those people and personalities.
So I think it's just been being
intentional about who comes like
setting some, what matters to us most.
then those are the filter for who gets in
the door and who doesn't get in the door.
raul-_1_09-05-2024_100421: It makes a
lot of sense walk me through and this is
Obviously, there's a little maturity that
you're having when you're doing this.
You said Third time around, second time
around with multiple reps, obviously
different iterations for pivots.
So I think there is that even just seeing
my personal growth in leadership from,
from 19, all these different experiences.
And when you talk to different
founders, you can see where they're
at in the leadership, like pendulum or
story arc, and it never really ends.
There's no really part where
you're like, Oh, I'm there.
So putting that out there, but yeah, You
viewed this new iteration of the business
differently, which allowed you to behave
in not just different behaviors, but you
see what it is, and you also see what
it could be because of your experience.
And I want to dive into
the things of what you're.
Cause right now, if listeners see
their business as it is, they have
an idea of the vision of the future.
And this isn't vision casting.
This is more like you behave to the level
of expectation that you have people around
you behave to the level of expectation
that you have or your perception of them.
If you believe someone is unhealthy or
isn't intelligent, if you treat them that
way, they will behave towards that level.
That's just like a psychological piece.
So I'm taking that abstract idea,
bring it here practically in business.
there is something you're seeing in the
business to walk me through those micro
leaps of faith, because as you move
forward from where it is in the pivots for
every single pivot, there is that like,
I always imagined in the Indiana Jones
movie where you have to cross the bridge
and the bridge is invisible, but you can't
see, you got to take one step at a time.
So you are taking those steps.
what are some of the things that are
going through your mind as you're
taking those steps knowing that you
have to build This thing you still
don't see the next step, but you see
enough to take one small, pivot forward
gray-mackenzie_1_09-05-2024_130421:
Piece of the time.
raul-_1_09-05-2024_100421: Yeah
gray-mackenzie_1_09-05-2024_130421: Yeah.
So there's a couple of core
beliefs about the type of
business that we want to build.
Not that you can't build a business.
In a different way, but what intentionally
do I want to build here in this
iteration of company and for this stage?
And so building around a leveraged
expertise business model has been
a core belief, which is I want to
specifically, I want to get paid for
what I know, not just what we can do.
And so to do that, you need
to be smart at something.
You've got to be an expert at something.
And.
Like, how do we become
an expert at something?
You see that problem over and over.
You see what happens when
you try different approaches
to solve that problem.
You see what happens a year
down the road and 2 years down
the road and everything else.
And the most common challenge
I don't know how sustainable
this solution is.
It's like the.
Client comes to us.
Here's my problem.
We're trying to do resource management
and we've taken a bunch of different stabs
at what resource management looks like.
We've worked with a
bunch of different teams.
I was doing a presentation earlier today.
I was talking about the seven core
project management lessons that
I've learned from the 40 something.
Eight or nine figure, that I've
worked with behind the scenes, the
teams worked with more, but just
that I've seen personally and what
are the commonalities operationally.
so we've studied folks, we've
seen different approaches to it.
We've tried it.
The unknown is, okay, this is
what we think is the best thing.
This is what we're going to coach
you on and we're going to do now.
We're not really going to know how
does that scale in an organization.
And so your two reactions to that are
either go in with a lot less confidence
in what you're presenting and you're
like, man, I don't really know.
I think this is probably
the best, bet, but.
Who knows what will happen.
So do you want to do this or do
you want, like here's the other
options that we're kicking around
and why don't you make the call?
At which point you're not the expert.
Or to say, Hey, this is the
very best advice I have for you.
Based on what I know right now.
And, Learn more, like we're paying
attention to all this, we care about
the longterm success for you and for us.
And as I learn more, you know, we'll
help translate that to you as well.
So I would say that's The most common
blind spot, but the core principle
of, Hey, I want to build a business
around expertise and we're going
to build expertise a lot faster if
we narrow down the, the different
variants of what we're looking at.
So by looking at agencies running
on ClickUp primarily, that is
a very narrow focus on a very
small segment of the market.
And so we get to see that more
than anybody else in the world.
And
just being able to pattern match,
which is like the fundamental skill
set for intelligence or expertise.
That like the trust in those blind spots
and in those men, I don't know if this is
100 percent the right way to do it or not.
Is we have to push this to get to the
answer and to get to the outcome that
we want, which is, we know the best way.
So I'd say that's the most common pieces.
and this is one of the humble and
hungry is one of our core values.
And so I want our team to always be
eyes wide open that we do not have
the perfect solution yet, for sure.
In any of the, these areas,
hopefully we've got the best
solution that's out there today.
But even that I'm sure
is not always the case.
And so we've got to be, humble
enough to recognize that and
hungry enough to want what
raul-_1_09-05-2024_100421: to go after it.
Yeah
gray-mackenzie_1_09-05-2024_130421:
so let's go pursue that.
raul-_1_09-05-2024_100421: No,
I resonate a lot with that.
The you opened up like a plethora of
different mind nodes to dive into that.
I really love the leverage expertise.
Can you help us define the
antithesis of a leverage expertise?
What is the opposite of that?
So that we can better understand
what is we're talking about.
gray-mackenzie_1_09-05-2024_130421:
Oh, yeah.
No one's ever asked me that question.
That's great.
I'd say the typical agency model.
Is that like the digital, the
antithesis is the digital?
Yes, man.
Or the digital is even not the word,
like it's the S man or yes woman agency.
It's the, you asked me to do
whatever and I'll go do it.
raul-_1_09-05-2024_100421: Full service.
gray-mackenzie_1_09-05-2024_130421: Yeah.
Will you coach me on,
running an agency?
Yes.
I've got a friend who
runs a mechanic shop.
Can you coach him?
Sure.
Why not?
Can you
coach me on Sales and how to
package up and price better.
Yes.
Can you also help me on the HR side?
Sure.
raul-_1_09-05-2024_100421: Yeah.
gray-mackenzie_1_09-05-2024_130421: to
raul-_1_09-05-2024_100421: Scary.
Yeah.
gray-mackenzie_1_09-05-2024_130421: It's
not that you can't build expertise there.
It's, and there's some principles
that are more universal, you certainly
can't be you're like, there's a
reason that general surgeons make
way less than specialists in any area
raul-_1_09-05-2024_100421: Yeah.
gray-mackenzie_1_09-05-2024_130421:
It's because when it counts the
most, you need the specialist.
raul-_1_09-05-2024_100421: Yeah, you got
to go all in if you're deciding in the
fence and I'll give a Counter idea of
that not to say that this is wrong or
right because I think there's no wrong
answer to grow This is all by design
I've spoken very successful and even very
successful agencies who are generalists
and It's again success can be relative
But they're pretty freaking good.
And the key thing here is like
you mentioned, there are core
competencies that they have,
but they are always inside.
They're leaning into,
I need to niche down.
I need to focus on one thing.
And so there is that tug and pull.
Then when you're super niche,
you're like, Oh, I'm saying no
to some other opportunities.
So there is that tug and pull.
And I don't think the grass
is greener on any side.
I think doesn't align with your team, the
culture, your goals, the future of the
business, as well as your personality.
I think that's something that
people really don't talk about.
gray-mackenzie_1_09-05-2024_130421: Yeah.
I think if you look at, if you look
at customer success and I've done
this and gone through and looked at
customer success of niched firms versus
non niche firms who are running NPS
surveys is the way that I looked at it.
the niche firms have a higher NPS
than the, generalist firms on average.
They also, the more, and that core like
that's not just a one and done, but
the more highly niched, the higher,
the, predictability of the outcome
raul-_1_09-05-2024_100421: Yeah.
gray-mackenzie_1_09-05-2024_130421:
versus if you actually force people
to not typically you say send out
NPS and be like, okay, we'll send
it to this firm and not that firm
because they had a bad experience.
We already know what they're
raul-_1_09-05-2024_100421: Yeah.
gray-mackenzie_1_09-05-2024_130421:
That's not,
raul-_1_09-05-2024_100421:
That's not a true.
Yeah, no, that's a
You can manipulate the
data to tell any story.
gray-mackenzie_1_09-05-2024_130421: had
to send it to everybody and you're going
to see more predictability in client
outcomes, the more niched you are.
But on the flip side, is
often, and this cuts both ways.
Sometimes growth is way higher.
If you've done a good job positioning
your niche, I think you can grow faster.
But we do see a lot of larger
firms who are full service and
that's sometimes adding on services
to serve existing customers.
But where does that motivation to say,
I want to niche down usually come from?
It's Hey, it's chaotic in here.
We've invited in so many
different variables.
We're trying to staff for so many
different types of work that there's a
lot of chaos that goes along with that.
But at the same time, there's a lot
of revenue that goes along with that.
So like, yeah, I don't think
that there's a, you said, there's
just competing values and what do
you value more or want to build?
raul-_1_09-05-2024_100421: Exactly.
Yeah.
There's so many different ways to not to.
Have a conversation with that.
I think Blair ends or David Baker
have had around Horizontal or vertical
positioning etc, but I think here I
don't want to just talk about that
the leverage expertise is only simply
niching because I really appreciate the
Perspective that it's not just a niche.
It's not I solve this one problem or this
one thing But it's a dependable source
of knowledge because that's basically
Part of the culture to if you're saying
this is a central source of truth of what
we're doing For this particular problem
that we're solving we may not have all the
answers But we will be pretty darn good.
If we just focus our intention and
effort towards it the interesting thing
that I want to just talk as a peer
here like some of my clients in the
portfolio are switching or transitioning
towards like subscription based
gray-mackenzie_1_09-05-2024_130421: Yeah
raul-_1_09-05-2024_100421:
And which is a popular trend.
It's, an amazing business
model, lots of things.
You can't just do it overnight
and just expect things to work
while there is a transition mode.
But when you do that, it
forces you naturally to focus.
What is the core thing you
saw for, and what are some of
the things that you, identify?
Help me maybe just to brainstorm here.
Where does leverage expertise play a
role in not just business model, Pricing.
Cause you do value based pricing.
Price per unit economics or price
per solution or product high service.
But how does it look like here?
Because when you talk about leverage
expertise, specifically for what
you do, typically it feels like
it's a project based approach.
gray-mackenzie_1_09-05-2024_130421: Yeah.
raul-_1_09-05-2024_100421:
I have this problem.
Hey, can you do surgery on my arm?
Once you do that surgery, it's over.
Then I heal.
How does that play a role with LTV?
How does that play a role with renewals?
How does that play a role with
solving additional problems that
happen once you've healed my arm?
gray-mackenzie_1_09-05-2024_130421: Yeah.
I'd say the first pro in the subscription
model is it creates the right incentives
or not a hundred percent true.
It could also create
totally the wrong incentives
raul-_1_09-05-2024_100421: Yeah.
gray-mackenzie_1_09-05-2024_130421: to
move away from it, but it does create
an incentive to say, what does it look
like to maintain and optimize this?
Like, how do you get better and
make better decisions over time?
So somebody comes and says
nothing's working project.
We don't have a defined
project management methodology.
We hate all the tools that
we've ever tried, whatever else.
And we come in with a strong point
of view and say, here's a methodology
about how you ought to be operating.
We'll help you set that up inside
this tool and train your team.
And in the project base, like
that's the, the first couple of
years of this iteration Zen pilot
or basically Zen pilot, cause we
did the rebrand at the same time.
That was where a lot of stuff
like primarily stopped there'd
be some support afterwards.
And the problem that a lot of those teams
didn't solve then was, Hey, we've given
you the infrastructure to access a lot
of this data, but we haven't trained you
on any of the skillset of looking at the
data, analyzing the data, making better
decisions about, how you scale your team.
How you price and package.
And so it does create the right
incentive to figure out how do we
drive more and more value over time.
You should keep paying us
on in a subscription model.
long as we're driving a lot more value
each month or each quarter or each year
or whatever, then then what you're paying.
And then the flip side, I think the
natural side of most subscription
models is it turns into what's
the easiest to go service.
And it's just,
These repeatable things
every month over and over.
And yeah, that's your,
raul-_1_09-05-2024_100421:
That's so typical.
They're just selling simple stamps and
then it becomes almost commodity pricing.
It's okay, that's great.
I got five options.
Who do I like the most?
gray-mackenzie_1_09-05-2024_130421: Which
I've wrestled with Hey, I think there's an
area, is there an area of Zen pilot that's
not a leveraged expertise model it's,
or it's less like it's much,
it's lower, maybe premium.
And it's more of a volume play of,
Hey, we've helped all these folks.
Now there's a very need.
Like one of the things we haven't I've
looked at buying several, recruiting or
staffing firms because almost everyone
that we work with has to there's some team
changes that need to make and there's this
new skillset that they need to bring in.
And that move would be
much more of a tactical.
Hey, this is a hands on you're
paying specifically for the service.
It's not that knowledge or expertise
doesn't matter there, but it's much more
of a, hey, let me just do this thing for
raul-_1_09-05-2024_100421:
They need it done.
gray-mackenzie_1_09-05-2024_130421:
And to date that hasn't, I haven't made
that move, but I do think there's a
potential fit there at some point in time.
And that looks like a.
A deviation or move away with a port
with a component of the business.
That's much more David Baker, who you
referenced earlier, talks about like
thinking and doing and two different rooms
and then much more like the doing the
execution room and the strategic room.
raul-_1_09-05-2024_100421: Yeah.
But that seems like it's more like an a
la carte Hey, solve this thing because
you want to upgrade just for this season.
Or it's like a little dopamine rush.
We'll continue with the strategy.
One of the things too, where like just
in real time working with clients, she's
just seeing this in my own business.
you embed, and I'm a strong advocate for
this to embed strategy before execution,
because I think the subscription model
just bears the bags, the thing, Hey,
I'm going to do these things for you.
These are the things you can expect.
And they anchor towards an outcome,
not anchors towards a possibility or
a value at, or like intangibles, where
do you draw the line or how do you.
Focus on the continual focus on strategy
with some of the execution because the
execution is and this might be a Blanket
statement, but sometimes it is the
easiest thing to sell once you do the
strategy He's like here's your roadmap
for the next six to twelve months Here's
that we're gonna work with you to help
execute that so that your team can be
trained up That's this is just my model.
I work with them.
I build the infrastructure
and In house with them.
They have their own asset.
They don't depend on an
external force for the asset.
They have it all in house They
can go execute on it and they are
stronger even if I'm not there,
which I think is a goal But they
all always want that relationship.
It's just the method by my personal
lifetime value How do you separate that?
In terms of the client expectations and
also not be super tempted to just go and
hey We'll just do it for you because it's
literally served on the platter for you to
go like hey We should just do it for you
gray-mackenzie_1_09-05-2024_130421: Yeah.
I think there's an component in
what we do for, for most of our
clients that is, Hey, we're hands-on.
We're also executing.
We're not purely strategy,
to the incentive piece.
I think that looks like, Hey,
we're gonna do purely strategic
work at the very beginning.
So this is like our blueprint,
that everybody starts with
at the very beginning.
That's the first thing that we're
gonna wind up doing together.
Then we go into a really
tactical executionary,
and training, uh, mode as
it's, Hey, here's the hands
on implementation together.
We're training you.
Part of the strategies there
is teaching people the why of
the what it'd be way easier.
And I think clients would probably
pay more if they pay more, we
get there a lot faster if we just
did a lot more stuff for teams.
But to your point, it doesn't build the,
it doesn't build any of the muscles of
the understanding of, Hey, what are we
actually building here for them to be
able to maintain over time, which is an
important part of what we're trying to do.
But I think where we go
back Hey, we've built this
infrastructure, we've launched it.
Now you're getting better data
to run your firm more profitably.
Like the only way that you get more
profitable, more healthy and more
productive if you actually start applying
what you're learning from that data.
Like without that habitual, practice of
going back to the data that you worked
so hard to get and having that inform
the decisions that you make, then you're
very little better off than you were.
And That's the next phase of strategy
that comes the first one was, strategy
of how you ought to mechanize and
optimize your operations better from
uh, like what what gets you better data.
The second.
iteration Of our strategy wheel is now
what, like looking at this data, how do we
interpret it, and then how does that apply
specifically to your, to your situation?
And I think that's our example or
model, but I think in most firms got
these different cycles of maturation
the client side, and then each of
those cycles has some element of,
strategic skills needed and then
new implementation work needed too.
raul-_1_09-05-2024_100421: Yeah, because
it's almost like It's based on their
current needs they all go through
similar life cycle like they have a
pain point Typically the solutions
and the implementations are similar,
albeit different verticals, different
person, different location, et cetera.
But then you also have that strategic
lens to say, here's what's next.
Here's what's possible
when you do what's next.
I think two other questions here, and
I'm curious to get your thoughts on
so monthly versus anchoring on saying,
Hey, this is going to take, you have to
commit for at least three months versus
just month to month, or commit to six
months versus just months to months.
One of my buddies runs a design firm.
I think they're like nine to 15 K.
And they said, yeah, sometimes
clients drop off after two or three
months and that sucks, but others
stay for the entire year or whatever.
So how do you navigate that
possible fluctuation when you're
working on the subscription model?
gray-mackenzie_1_09-05-2024_130421:
I don't know if this is right
at all, but my gut is how much
friction is there to get results.
So for sure, it's way easier
to sell something that's month
to month than to sell an annual
subscription or whatever else.
If you have the type of service that I can
plug into and I'm getting great results.
There's, it's not a huge amount
of work for me and I'm getting
awesome results in month one.
the natural stickiness of that is higher.
And so I'm more inclined to say,
yeah, sell it on a monthly basis.
raul-_1_09-05-2024_100421:
Cause the risk is low for you.
Cause this is a, is this a risk
analysis or is this a, I think it's
a risk analysis, but you tell me.
gray-mackenzie_1_09-05-2024_130421:
for sure It's really, like in the
client's best interest is they have some
outcome that they're trying to achieve.
I would like as many people who want to
achieve that and who fit my criteria for
who I want as a client to experience this.
So that's the front end.
That's like, how many people can I close?
So it's easier to close.
I'll close more people if it's a
monthly offer, but then how many
of those people will drop out?
so if it's relatively, risk.
They're not like very few, relatively few
will drop out before hitting that outcome.
you want to maximize the funnel
and open that up and sell it.
So monthly probably the flip side is if
you've got the type of service and this
is like, leadership development is a
really challenging one to work through.
anything that involves people in
change management, there's a lot
of pain that goes along with that.
And so that's really
hard to, work through.
It's a it's, there will be
plenty of times that somebody
wants to quit, in that process.
And so those are the areas where I know
it's going to get hard here at six weeks.
I'm doing you a huge disservice
if I sell you a monthly,
Opportunity to be able to back out.
I'd rather say.
Hey, you need to sign up for
months or three months or
whatever the minimum timeframe is.
So I think this is just
an optimization problem
raul-_1_09-05-2024_100421: Yeah.
gray-mackenzie_1_09-05-2024_130421: nobody
really knows, but take your best guess
at first and then measure it adjust.
How do we get as many of those right
fit folks in, but not get folks in and
set them up for failure where we know
it's going to be hard and they're going
to want to quit and give them like,
don't give them that out if they don't.
Yeah.
raul-_1_09-05-2024_100421: coming from
the marketing world, like everyone
would say the leads suck or whatever.
So it's similar here.
Like you could do a close one deal, but
the quality of that close one deal are
they mentally prepared to stick around?
But it's also, that's the risk analysis,
but it's also the results analysis.
Like for me, transparently for me on the
backend for some of the Leadership stuff,
like the bigger pieces that we play with.
It's a six month minimum.
There's no way I'm going to get you a
result in two months or three months.
Like you'll see traction, you'll see
growth, but the results usually take
after four months, four or five.
Like it's, but it's
also maturity piece too.
Like people who aren't ready for that.
Like people who know who like, like you
mentioned, have the reps in the back.
I have already done
this a couple of times.
They know how long things
take to actually bear fruit.
gray-mackenzie_1_09-05-2024_130421: Right.
raul-_1_09-05-2024_100421: I think
the final question, this is, I'm
pretty curious, is you've gamified,
you were playing with a subscription
and like price per economics, even
though it's still anchored towards a
subscription, like the monthly points.
Tell me where the idea for
points came from, how does that
actually work to get results?
And it also makes it fun.
It's almost like a little mini
dopamine, like I'm eating like that
ice cream with little balls, like just
gray-mackenzie_1_09-05-2024_130421: Yeah.
raul-_1_09-05-2024_100421:
one bit at a time.
gray-mackenzie_1_09-05-2024_130421: Yeah.
This is a big experiment.
It's about a year old for us right now.
So moving to subscriptions and
what you're buying is you're
buying a capacity of points.
So spend 6, 000 a month,
you're buying 60 points month.
And so what the heck do points
mean is the obvious question then.
So everything that we do we defined
our core set of deliverables and
there's a little less than 60 different
deliverables that we could do.
Each one of those 60 deliverables
has a set number of impact points.
And so the idea behind that is how do
we try to base it around the value of
what comes out of that for some things?
So like the most common points
implementation when I see a
team run on points is it's
purely there to obscure hours.
raul-_1_09-05-2024_100421: Yes.
That's what I was going to ask you.
Is this anchor tied to hours?
Is this your pricing thing or?
gray-mackenzie_1_09-05-2024_130421:
Way simpler in those cases
to just say, it's ours.
Like then we don't have to play
any of the games tied to it.
so we have a mix.
We've got a bunch of stuff
templatized, ready to go.
you can go through, hours worth
of really in depth training.
That's all pre recorded.
There's no additional hourly
cost to us to go share that.
there is value that's derived by
clients from going through that.
And that's an example, but
templates or even software,
where we're very much a tech.
enabled,
Firm as well.
we're balancing like, how do we mix,
hours don't really make sense to sell
because the results that we can get
somebody two days into something in
terms of what their workspace looks like.
It would take somebody else
who doesn't have this built
out three months to go build.
So there's a lot of value there.
So, so part of it was mixing that
then part of it was saying, how
do we through the client's eyes?
And so this is a bunch of
client conversations as well.
What do they perceive as most valuable?
going to try to build this as a, on
average, it's going to be, I've realized
people would look at it differently and.
One person's case, they'd rather pay
a lot more than, less but how do we
put a value quantity of points on
each of these things that we can do?
And then the other piece is
we're really trying to create
standardization as the team scales.
And we have different folks doing
the strategic work and making
recommendations be able to build a plan.
Consistently that says,
Hey, this is what they need.
And this is therefore how many
points there's no back and forth.
If you buy something from me and
you buy it from somebody else on the
team, you're not going to get, point
values then, for each deliverable
then what we would have had before.
So it's all standardized.
So part of it was standardized,
which flies in the face of some
of the, like the, value based,
raul-_1_09-05-2024_100421: Yeah.
gray-mackenzie_1_09-05-2024_130421:
price it like we are not
pricing the customer anymore.
And so this is a challenging one to
with our model, which is relatively
high volume and relatively low spin.
If you looked at us versus a marketing
firm, an average client's to spend
about 60 grand, over the course of
a year with us and, way lower than,
here's a 30, 000 a month marketing
retainer that a lot of our clients have.
So I think if that was flipped, I would
go a different way and I'd say, Hey, price
the job or price the client, not the,
not the specific work.
But for our model,
part of the, push behind it.
raul-_1_09-05-2024_100421:
Part of the economics.
gray-mackenzie_1_09-05-2024_130421:
there's probably more details
to get into there, but that's
some of the thinking behind it
raul-_1_09-05-2024_100421: No I
actually, I think that's a much better
framing of the question that I asked.
Because essentially you're right like
each point is worth like a hundred
quote unquote 100, but it's less of
that but you're you're pricing to the
value versus pricing to the value of
the outcome to the specific client and
I've recently made a post like I've made
a confession like not everyone should
value price Like I love value pricing.
I absolutely love it, but not everyone
should do it And there's also a huge trend
right now with SAS too because it's almost
this is the most similar pricey model
that I've seen to one of my popular tools.
I won't just name the names here.
No relationship with them.
Why?
I have a slight relationship with them.
But for them, I could easily
accidentally just spend a thousand
bucks just in one sitting.
Cause like you're using what you're using.
And it's amazing.
So I really liked that.
And you customize it, standardize it,
base it on value, but then also your
profitability is baked in gear, almost
guaranteed to whatever you're doing.
Cause you've already worked backwards
from that and you can still create custom
quote unquote bespoke offerings to the
client based on what they actually need.
So they feel like they're getting the
value and they're happy to pay it.
And it's almost like an
addiction to work with you.
gray-mackenzie_1_09-05-2024_130421:
Yeah, I do think some of the things
that we're still trying to figure out
there are, what do we do with some past
clients who have much smaller needs?
Hey, I don't need 40 points a month.
Or I don't need that every month.
So how do we deal with that?
That's one challenge.
And then the challenge is any of
these models this is any pricing
model, but how small is too small?
We've just having this conversation
with a relatively early stage They're a
couple of years in there, eight people.
And they don't fit into terms of their
budget and what they want help with.
No, we don't totally agree on
what they want help with versus
what they need help with.
They would love to pay 3, 000 a
month and be on a plan smaller
than our lowest plan right now.
raul-_1_09-05-2024_100421: Yeah.
gray-mackenzie_1_09-05-2024_130421: And
that conversation is not uncommon at all.
But somewhere you have to draw a
line and say, Hey, here's where it
makes sense for us to actually have
a client on a subscription model.
And here's where it doesn't.
raul-_1_09-05-2024_100421: Yeah.
gray-mackenzie_1_09-05-2024_130421:
Those are cases where it's like,
Hey, this does not make sense for
us to, bring that on right now.
But solving some of those
there's, still challenges.
This doesn't solve all
the pricing or packaging.
Questions or issues that you'd ever have.
Um, but I think it has been helpful
to create clarity for the internal
team, create clarity for clients.
I'd still not as clear as I
would like it to be for folks to
understand it for the first time.
The subscription model makes total sense.
The what the heck are points and how do
they work piece does not make total sense.
The first time that you look at it,
clients who've been working with
raul-_1_09-05-2024_100421: If they
haven't used SAS tools that aren't based
on unit economics, it makes zero sense.
But once you live that life and that
okay, this makes total sense, as
long as they see what they're doing.
The only issue there is that
you don't want to position it
as a Chinese menu of services.
gray-mackenzie_1_09-05-2024_130421: Huge.
raul-_1_09-05-2024_100421: I've
fired agencies who like, they
charge me 500 bucks for email.
I don't see the value in that little
simple email that you wrote with chat GPT.
What am I getting here?
gray-mackenzie_1_09-05-2024_130421:
I think it's definitely true.
We've not open sourced the
what is that deliverable menu?
That's not, you can't like go on the
website and see that because ultimately
it's still our job as the expert to
say, here's what you actually need.
raul-_1_09-05-2024_100421:
Yeah, you're making the roadmap.
gray-mackenzie_1_09-05-2024_130421: Yeah,
raul-_1_09-05-2024_100421:
You're making the roadmap.
gray-mackenzie_1_09-05-2024_130421:
the point.
Um, you know, like
raul-_1_09-05-2024_100421:
Have you considered doing
like an a la carte purchase?
Like, you know, If you do the
subscription, the points are a hundred
dollars per point, but you have to
buy at least 25 points to work with
us, but they're going to come at 250
if you just want to buy a la carte.
gray-mackenzie_1_09-05-2024_130421:
So on the I haven't shared this
publicly before, but anyone who's
been a past client or existing client,
they have the ability to purchase
point bundles if they need something.
So it's exactly that.
If you want to buy 10 points,
it's this upgraded price.
If you want to buy 50, it's either 10,
50 or a hundred and you buy a bucket.
And the two things that are true about
that are, like you're saying, you pay
more when you buy a la carte bundles.
And then the second thing is don't
get first dibs on our capacity.
So if some of those points are going
towards not a product, but Hey, I need
a coaching session for this, or I need
training session on how we're going
to run this and this, that's fine.
And hopefully we can
accommodate that, but our.
Subscribers, the folks who are on they've
got the first dibs on our team's capacity.
So you're kinda getting the second,
I haven't found a way to make that
sound more appealing than what I just
raul-_1_09-05-2024_100421:
Yeah, no, it makes sense.
gray-mackenzie_1_09-05-2024_130421: like,
Hey, we don't care about you at all.
It's just a, hey, there is an extra bonus
if you are a subscriber and you're an
active client who's on a subscription,
not gonna get bumped because we had some
people ask for point bundles, and so
we jumped to take care of them first.
raul-_1_09-05-2024_100421:
Yeah, that makes sense.
And I think that's with
clear expectations.
One of the things I do is like with this
description that I have to, to my stuff,
it's for the lower tier, it'll be a top
tier gets response one business day to
two max lower tier, like it might take
two to three days or longer, depending
on the complexity of the question, not
because I'm not going to get to it,
it's just because there's this level
of urgency of what, takes precedence.
So I don't think it's a negative approach.
I think people know, like.
that's pretty cool.
And it's almost like you got them using
when you need them, but here you got
them and that way they still like almost
subscribe to you on a infrequent basis.
Great.
This was a, this was fascinating getting
to know and understand pretty much like
your thinking behind the thinking and
understanding what you're doing and being
vulnerable to say, this is still a test.
I think that's the most valuable piece
that people look at Other companies,
maybe if they're looking at competitors
or like just because they're doing
something doesn't mean they have
it all figured out And I really
appreciate you bringing that to light.
I know it's working, but I think
that's pretty freaking awesome
For our listeners out there.
Where's the best place for people to one?
Thank you for being on it
to learn more about you
gray-mackenzie_1_09-05-2024_130421: Yeah.
LinkedIn is the easiest.
So just great.
McKenzie on LinkedIn.
Thanks.
raul-_1_09-05-2024_100421: I'll put
all those links in the show notes.
Gray.
Thanks again
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