The progency is the missing link in today’s martech ecosystem. Martech platform providers need to expand their offerings to create a performance-based business unit which can interface with marketing departments to provide the solutions and outcomes they need. Marketing managers need to go beyond trying to buy every new point solution and instead focus on the KPIs the business needs to drive profitable growth. Only when the two meet will brands see success and the martech solution providers benefit from an addressable market that is 10 times larger.
Once upon a time, all IT used to be done in-house by companies. Then came the era of outsourcing which saw the rise of the global IT services giants. A similar story will play out in marketing in the years to come. The coming martech era will reward those who use the progency model to take a hatchet to the rising adtech costs and thus put their organisations on a sustainable path of profitable growth.
The progency is a natural extension of the “as-a-service” model. Instead of just selling martech platforms which are fractionally used, a new business model can be created with the same machine to generate many times more revenue by ensuring marketers succeed. What marketers need is “Martech-as-a-Service” – what is happening today is that martech companies provide a confusing array of point solutions that make it difficult for marketers to drive the outcomes they want. Pioneering progency companies thus have a great opportunity with a pivot: instead of just selling the product, focus on delivering measurable results.
I recently met a CEO of a company who made this point come alive to me. He said, “Today we are paying Rs 100 for a collection of products. I do not want to discuss and negotiate whether you will charge Rs 92 or 95. What I want you to do is take ownership and bring my overall cost down to Rs 70. What we should be discussing then is how we split the Rs 30.” As I reflected on his comments after the meeting, I realised that he was nudging me towards a progency-like model (even though he did not mention it in so many words.) He was advocating a partnership where we work together and benefit jointly from the upside. I may get a sale for Rs 95 now, but I will always be at risk because tomorrow someone can quote Rs 90 – it’s a downward spiral in a competitive and semi-commodity marketplace.
As I thought about that conversation, I came up with a better possible pitch that I should be considering. “I will help you to not only cut Rs 30 of your costs and but take your revenues up by Rs 50 with the progency model. For this, we will need to work as partners – you will need to trust me with your data, customers and campaigns. Are you ready for this? Because if you agree, it will help drive exponential forever profitable growth for you.”
This is the mindset change that is needed on both sides – from the brand and the martech platform provider (and soon-to-be progency). And if both can make this shift, a wonderful new era awaits!