Ideas and Innovations: Progency, Earned Growth
11. Progency
A Progency (product-led agency) melds product offerings with a streamlined layer of agency services, anchored around the product itself, and adopting a performance-driven pricing model. Operating as an extended and integral arm of the marketing team, a progency doesn’t just deliver results; it thrives on them. Its compensation is tied to performance, transitioning it from a simple service provider to a genuine business ally. In essence, a progency encapsulates the concept of a “profits agency” – a technological ally that collaborates with brands to both guarantee and partake in profit generation.
This product-led agency will combine content and creative skill sets with number-crunching and software capabilities to build on top of a proprietary full-stack martech platform to deliver the outcomes marketers want with a performance (success-based) model. The progency will help marketing teams outsource the outcomes they want – just like is being done with adtech agencies that generate leads, app installs or new customers and are paid based on results.
The progency will be different because for the first time an agency will build solutions on top of its own product. In the past, agencies have not focused on having their own internal products. Adtech agencies have used products provided by Google and Facebook, and then overlaid their creative and analytical skills to deliver results. The progency will be tech-first, owning a martech platform. Ownership is important because only the developers will fully understand the power of what their platform is capable of. This is what will provide a sustainable competitive advantage to the progency – and ultimately benefit brands.
[Source: Progency for Martech: The Missing Link]
12. Earned Growth
Fred Reichheld, a prominent thought leader in loyalty and business growth, introduced many foundational concepts that reshaped our understanding of customer loyalty, most notably the Net Promoter Score (NPS). One of the new ideas associated with his work is the concept of “earned growth.”
Earned growth refers to the organic growth a company experiences due to the actions and recommendations of its loyal customers. In other words, it’s the growth a business achieves not through traditional marketing or sales efforts, but because of both organic growth and revenues generated via referrals and word-of-mouth growth. It is an idea that thus combines the power of retention and referrals.
Earned Growth is mathematically represented as Net Revenue Retention + Earned New Customers (ENC) – 100. Reichheld, Darnell and Burns discuss this in an article in Harvard Business Review: “Once you have organized revenues by customer, you can determine your NRR. Simply tally this year’s revenues from customers who were with you last year, divide that amount by last year’s total revenues, and express that figure as a percentage. ENC is the percentage of spending from new customers you’ve earned through referrals (as opposed to bought through promotional channels).” They offer an example: “Company A’s revenues grew from $100 in 2020 to $130 during 2021, or 30%. In 2021 customers who were on the books in 2020 accounted for $85 of revenues. Some of them expanded their purchases by a total of $5, but that growth was more than offset by other customers who reduced purchases by a total of $20, resulting in an NRR of 85%. New customers accounted for $45 in revenues—$25 from earned new customers (referrals) and $20 from bought new customers. Adding the NRR (85%) and ENC (25%) and then subtracting 100% results in a 10% earned growth rate.”
In essence, Reichheld’s concept of earned growth underscores the importance of customer loyalty and the immense value of turning customers into active promoters. It’s a reminder that, in the age of connected consumers and easy access to peer reviews and recommendations, the most potent growth strategy a company can employ is to genuinely satisfy its customers.
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These then are the ideas and innovations that are the foundations for profipoly marketing.
- Unistack
- Large Customer Model
- Digital Twins
- Velvet Rope Marketing
- Catalog and Customer Data
- AI-enabled Catalog Enrichment
- Unichannel
- Email 2.0 powering Inbox Commerce
- Atomic Rewards
- Action Ads
- Progency
- Earned Growth
These twelve cornerstone concepts serve as the bedrock for profipoly marketing, sculpting a future where brands go beyond acquisition and retention to maximise customer lifetime value of the category’s Best customers organically and via referrals. They constitute the “poly” in profipoly: the many ideas and innovation that come together in unison to ensure exponential forever profitable growth.
