Progency: The Profipoly Pathway

Published December 23, 2023

1

Past Writings

I have written about the need for “profipoly” (profits monopoly) being marketing’s fourth and final frontier. One of the twelve innovations that I discussed was the “progency” (product-led agency).

To start with, here is a compilation of my previous writings about progency.

Progency for Martech: The Missing Link:

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.

Martech 2.0: Adtech-Style Performance Pricing Transformation: “Digital advertising is $450 billion, while martech (its ‘poor’ cousin) languishes at a fraction of that ($50 billion). If martech is to rise, then it needs to copy adtech’s pricing model – make its pricing linked to outcomes. Every martech company will thus need to think of itself as a “progency” (product-led agency), delivering measurable revenue growth to capture a percentage of the upside. Done right, this shift can enable martech companies to grow their TAM (total addressable market) and transform brand P&Ls by driving profitable growth… Performance-based pricing is the foundation of Martech 2.0, heralding a shift from point solutions to a progency (product-led agency) model. Done right, it will make martech companies the profit enablers for B2C businesses and power their own version of exponential forever profitable growth… [The progency model recognises] the complexity of martech platforms and the necessity for expert ‘operators’ who can combine right- and left-brain skills to maximise their benefits. Delegating usage to in-house teams at brands or pure-play martech services companies may not leverage the full benefits of these platforms. Martech product companies, with a thin layer of added services, are best suited to unlock the full potential of these platforms.”

Martech 2.0: A New Profits Paradigm for Marketers and Vendors: “The martech industry missed a step by not capitalising on adtech’s success. Initial vendors focused on consumption (like emails and SMS sent) and predictable platform fees based on Monthly Active Users (MAUs). Also, marketers weren’t paying much attention to martech spend, as they had plentiful funds, which were mostly allocated for new customer acquisition. Only recently has there been a shift towards sustainable, profitable growth. Martech vendors need to appreciate the power of considering brand spending as Cost of Goods Sold (COGS). It may initially seem risky due to revenue uncertainty, but in the long run, this approach opens up “infinite budgets,” much like adtech. This balance shift can expand the Total Addressable Market (TAM) for the martech ecosystem. But this requires a shift from predictable Monthly Recurring Revenue (MRR) from SaaS sales to a “progency” (product-led agency) model with a service component and outcome accountability.”

I have written about the progency idea to solve the problem of reactivation.

4M and Netcore 2.0: A Framework for Exponential Growth: [The Rest] customers who while they generate some revenue could negatively impact profitability because of the marketing and servicing costs. This is where a brand should consider outsourcing management of these customers to a “Progency” (product-led agency) whose focus should be activate them, engage with them, and get them to create carts ready for checkout using the breakthrough innovation of Email Shops. Progency is a new-gen martech services entity where product (unistack) meets agency. A progency can work like a performance marketing entity taking on KPIs and delivering the outcomes marketers want. For this, a progency will need to combine software and analytical skills with traditional creative skills, uniting left-brain and right-brain resources. It can work as an extension of the marketing department taking on specific tasks with success-linked compensation. The progency can work on the [dormant] customers and reactivate them by using push messaging, rewards, affinity-based content, the full stack DXP (digital experience platform), and a touch of paid media if needed. The key point is that the progency takes complete responsibility for the dormant database and delivers activated customers at a lower price point than what reacquisition would cost…A Reactivation Progency targets the often-ignored segment of dormant customers. By reactivating these users, we are breathing new life into a segment that would otherwise require costly and time-consuming reacquisition efforts. In essence, we are converting a potential liability into an asset.

ProfitXL to Profipoly: Solving the Four Funnel Frictions: “A [Reactivation] Progency is a product-led agency which operates based on an adtech-influenced performance pricing model. This approach harnesses the power of martech to revitalise dormant customers and stop customers from churning using a myriad of techniques: firstly, it leverages existing opt-in permissions to send incentivised and interactive emails, thereby increasing the likelihood of engagement; secondly, it combines data enrichment with targeted content and offers for the inactive individual; and finally, it operates an ad exchange program embedded in the email footers of cooperative, non-rival brands…Delegating this responsibility to a specialised partner is more beneficial than burdening the ecommerce brand’s internal team, as it allows for dedicated focus, fosters innovation, and enables the marketing team to concentrate on cultivating the highly profitable “Best” customer base instead of the lengthier and less profitable tail.”

In this series, I will discuss in depth why progency is the most important enabler for the transformation of a digital business from being profitless to profipoly.

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Overview

Here is a summary of the profipoly narrative.

• Marketing’s first three waves – branding, adtech, and martech – have fallen short in boosting profits for digital businesses. The crux of the issue lies in the disproportionate expenditure on new customer acquisition, which consumes a lion’s share of marketing budgets. This leaves a meagre portion for brands to nurture and deepen ties with their existing customers. The narrative has been predominantly about relentless pursuit (hunting) with scant attention to nurturing (farming).
• The biggest profit killer is the AdWaste that is rooted in the performance marketing and adtech spends. Half of the money is being wasted on wrong acquisition and reacquisition. Globally, this is a $200 billion problem. The antidote isn’t mere ad spend optimisation; it’s a paradigm shift towards valuing existing customers. The true remedy to the adtech conundrum is a martech metamorphosis.
• The prevailing martech framework, encompassing data, user experience, and communication, has become While many brands possess this stack, its potential remains largely untapped. The focus needs to shift to a “profipoly stack” to solve the three problems of retention (maximising lifetime value, or LTV), conversion (predicting next best action), and engagement (enabling inbox commerce).
• The intricacies of the martech/profipoly stack are undeniable. While AI can help with campaigns, creatives, and customer journeys, it does not do away with the need for domain experts. Brands and their marketing departments need help. This is where the progency comes in. It combines SaaS with service, platform with pay-for-performance. The progency is the missing link in martech.

This is a brief of the progency imperative.

• Think of the brand’s farming business (focused on existing customers) as having two parts. The straightforward segment comprises the Best Customers, those who actively engage with the brand, frequenting the website or app. Their consistent purchasing behaviour, coupled with substantial order values, fuels business growth.
• The challenge arises with the segment that remains passive, failing to engage, convert, or stay loyal (“one-and-done”). They need persuasion and personalisation to purchase. If they don’t, they’re relegated to the adtech realm for retargeting, incurring additional costs for brands to re-engage a once-acquired customer.
• Progency’s prowess extends beyond the Best Customers. The untapped potential lies with the Rest and Test customers. The former represents the median segment, while the latter denotes the long tail. Their unique needs often go unaddressed by conventional marketing teams. Progency, with its outcome-driven compensation model, is the solution, acting as a conduit for waste reduction and recycling before potential customer loss.

The market for martech solutions is estimated at a few billion dollars (excluding the cost of sending messages). Progency with the profipoly stack is a 10X bigger opportunity – aimed at the $200 billion AdWaste. It is the key to unlocking new revenues for brands, leading to exponential forever profitable growth. Analogous to the transformative impact of the lithium-ion battery in the EV realm, progency is set to catalyse marketing’s profipoly revolution.

3

Claude Summary

I asked Claude.ai to examine some of my past writings and the introduction to this series, and provide a summary covering profipoly, progency, and their connection. Here is the lightly edited result.

The profipoly narrative is anchored on two key pain points plaguing digital businesses:

Firstly, the ballooning expenditure on acquiring new customers, which accounts for a staggering 80% or more of marketing budgets. This myopic fixation on endless hunting for new customers completely overshadows the more profitable farming of existing ones.

Ironically, this skewed prioritisation stems from the promise of limitless scale that lured brands into the digital realm. The narrative was irresistible – cast your net wide into an ocean of endless customers and profits will flow. However, that vision underestimated the vastness and complexity of digital landscapes. As competitors flooded the space, visibility became a precious commodity and customer attention, a scarce resource. A relentless race ensued, with brands desperately trying to replenish their leaking bucket of customers by pouring more into ceaseless acquisition efforts.

In the process, marketers lost sight of the trove of value that already existed within their grasp – their current customers. Compelled by the temporary delight of an expanding user base, brands focused disproportionately on the top of the funnel. They disregarded the potential of optimising further down the funnel by nurturing existing relationships. This oversight led them down a spiral of escalating acquisition spends at the cost of long-term profit maximisation.

The second, and equally self-inflicted wound is the egregious inefficiency of new customer acquisition efforts. Studies peg the wasted spending, termed as “AdWaste,” at nearly 50% of acquisition budgets. This lost spending stems primarily from two sources:

• Misguided acquisition – Securing customers who are the wrong fit, thereby delivering low lifetime value.
• Misguided reacquisition – Retargeting inactive customers acquired previously instead of re-engaging them through owned media channels.

Essentially, the combined obsessive focus on securing new customers regardless of fit or cost, along with the gross inefficiencies of those efforts, has steadily bled marketing budgets dry. This has stifled profitability, preventing the attainment of sustainable, profitable growth at scale.

The apparent quick-fix solution that marketers opt for is tighter ad budget management or improved attribution to optimise digital spends. However, incremental optimisations on an already bloated and leaking bucket provide minimal relief.

The real solution lies not in trimming budgets but recalibrating priorities. Brands must fundamentally refocus their efforts on three distinct customer cohorts:

• Best Customers: Maximise lifetime value from the top 20% who drive a disproportionate share of profitability
• Rest Customers: Graduating them to become the next “Best” customers
• Test Customers: Cost-effectively manage the long tail of low-lifetime-value customers

This necessitates tailored strategies to nurture each group, aligning investing with the potential value derived. Best customers warrant premium experiences that cement loyalty and increased wallet share. The Rest require guidance to evolve them into their higher spending avatars. The Test segment needs low-touch engagement that sustains the relationship without accumulating servicing costs.

However, executing this transition in focus requires specialised capabilities that most marketing teams lack. Teams aligned for endless acquisition find themselves underprepared for the data-driven, customer-centric demands of profipoly strategies. This mismatch between needs and capabilities is precisely where the progency model demonstrates its indispensability.

By fusing martech products with targeted services and performance-based pricing, progency fills the profipoly capability gap. Operating as an extension of the marketing team, the progency focuses its efforts on revitalising dormant customers and driving referrals. Both initiatives optimise underutilised marketing assets to reduce AdWaste and accelerate profitability.

Its pay-for-performance model also perfectly aligns incentives, rewarding the progency only when its efforts successfully deliver defined profipoly outcomes for the brand. In a sense, it transforms the service provider-client relationship into a genuine business partnership focused on a shared mission to boost profitability.

In essence, progency is the missing key for unlocking profipoly. Its combination of specialised profipoly capabilities and tight alignment of incentives make it the ideal change agent to catalyse brands’ transformation from a Sisyphean pursuit of new customers to a glorious future of maximised lifetime value and exponential profitability.

Together, profipoly and progency provide the solution to the $200 billion AdWaste conundrum that has plagued digital businesses.

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Six Advantages

Progency represents a groundbreaking shift in the martech landscape. Born from the fusion of product offerings and specialised agency services, progency operates with a performance-driven pricing model, ensuring its compensation is intrinsically tied to the results it delivers. Unlike traditional agencies that rely on external products, progency is tech-first, owning its proprietary martech platform. This ownership ensures a deep understanding of the platform’s capabilities, granting a competitive edge. Progency’s primary focus is on revitalising dormant customers, transforming them from potential liabilities into assets. By leveraging a myriad of techniques, from incentivised emails to targeted content, progency aims to reactivate these customers, offering brands a cost-effective alternative to reacquisition. In essence, progency is poised to be a pivotal force in transitioning digital businesses towards sustainable profitability, heralding the era of “profipoly” or profits monopoly.

The progency model brings six distinct advantages that make it a compelling innovation.

First, progency transcends the traditional service model of an agency; it is a creation of the martech SaaS entity. The progency is birthed by a product company which adds a thin layer of services. It is a unique play because software companies do not create their own servicing divisions and instead choose to work with external partners who bring in the people, and servicing agencies do not create their own products. Think of the progency is the third way in martech – a middle path between the two extremes of software and services. Being created by a martech company, the progency has privileged access to specialised talent like data scientists, campaign strategists, and tech developers. This depth of expertise is hard to replicate externally. The martech creator of the progency also has access to aggregated data across client implementations. These insights can feed into improving the progency’s strategies. The progency’s direct association with an established martech product bestows greater credibility in the minds of prospects. This can accelerate adoption.

Second, the progency introduces its proprietary martech suite, the “profipoly stack.” While this might necessitate additional integrations like a Javascript add-on or an SDK, it ensures that the creators have full command over the technology. Traditional martech agencies work with pre-installed stacks and bring in people. The inability to have mastery over the software limits their eventual effectiveness. The progency’s autonomy over its tech stack facilitates rapid testing and deployment of new features to drive better outcomes. It is unencumbered by the longer delays typical of third-party platforms. This combination of a SaaS product leveraged by the organisation that built it is a novelty in the world of software.

Third, while the progency can focus on existing customers, its forte lies in its focus on the “leftovers” – the ones who are not engaging, not converting, and not retained (one and done). The focus on neglected customer cohorts creates a “blue ocean” positioning, minimising overlap with a brand’s internal initiatives. Instead of replacing, progency complements existing marketing strategies and customer success teams.

Fourth, the progency champions a fresh metrics paradigm. While I’ve previously introduced the Profipoly Score, a more streamlined metric is the EnCoRe (ENgagement, COnversion, REtention) Triad. Aptly named, as ‘encore’ signifies repetition, this metric offers a lucid view of progency’s influence on profitability-linked outcomes, setting the stage for transparent revenue-sharing agreements between the brand and the progency.

Fifth, the progency’s performance-based compensation model is tied directly to the revenue expansion achieved for brands. This ensures perfect alignment with brand objectives. As the progency’s efforts directly contribute to revenue that might otherwise remain untapped, brands can confidently reward it with a share of the incremental sales. This is exactly what is happening in adtech with its cost-per-click pricing. The progency thus become a true business partner, not just a vendor.

Lastly, emulating the adtech model, progency benefits from a virtually limitless budget. Unhindered by arbitrary budget caps, the progency stands to gain significantly when it surpasses targets, fostering a culture of continuous innovation.

In summary, these six facets – martech entity ownership, the parallel existence of the ‘profipoly stack’, targeting the ‘blue ocean’ of overlooked customers, innovative performance metrics, outcome-based compensation, and boundless earning potential – position the progency as an indispensable and integral partner for brands. By bridging the martech execution chasm and paving the way for enduring profitability, the progency is poised to be the spark that promises to ignite marketing’s profipoly wave.

Next, we will discuss each of these six ideas.

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SaaS + Service Synergy – 1

A few months ago, I met a banker at a café near Los Angeles airport. While we had interacted many times on Zoom during the pandemic, this was our first in-person meeting. He advised companies on their M&A strategies and thus had a good window on the thinking of top management and industry direction. I explained what Netcore does – a B2B SaaS company focused on helping B2C/D2C brands build deep customer relationships. After I had finished, he said, “Rajesh, you are missing a trick. You need to think not SaaS, but SaaS and service. Add a thin layer of services if you want to win in the US market. No VC-invested SaaS company will do services, and that can be your competitive advantage with your India base. I have worked with some of the large US consumer brands. They buy the expensive marketing cloud platforms but don’t know how to make the best of them. They are hurting. They need help. If you can combine the power of your platform with people capable of delivering the outcomes, you will have a winner on your hands.”

His words resonated with the challenges I had heard from US consumer brands at multiple trade shows I had attended. Despite investing heavily in sophisticated marketing cloud platforms, they grappled with optimising their potential. The crux of the issue was the need for a holistic solution that merges the prowess of a platform with the human touch to ensure desired outcomes.

As I reflected on the conversation on the flight back from LA to San Francisco, Theodore Levitt’s profound statement, “People don’t want to buy a quarter-inch drill; they want a quarter-inch hole,” echoed in my mind. The banker’s insights highlighted a market void. While martech entities like Netcore offer the tools (drills), the digital business landscape yearns for solutions (holes).

Enter progency: the embodiment of this sought-after solution.

The fusion of SaaS with service under a singular umbrella is an unconventional approach. Conventional wisdom dictates companies to specialise, leading them down either the SaaS or service path. This dichotomy has been lucrative for platforms, with IT giants like Accenture, TCS, and Infosys establishing robust practices around software products like SAP, Salesforce, and Adobe. The service revenue often dwarfs the product’s price. However, in the martech realm, this dynamic of a big opportunity for service dollars is conspicuously absent, despite a palpable demand for services. This sentiment has been a recurring theme in my interactions with digital leaders.

During a Vietnam trip a few months ago, the CIO of a traditional company with a large offline presence and going digital said to me, “We are paying hundreds of thousands of dollars for this marketing cloud platform. But I don’t have the talent and know-how to make the best use of it. I don’t want to buy yet another martech solution; help me make the most of the investment we have already committed to.” Similarly, a CMO from an Indian financial institution said to me, “Your ideas and what you showcased about the platform capabilities are very good. But who will do it? Can you have some of your people work in our office as an extension of my team to deliver the outcomes we want?”

Such feedback underscores the indispensable role of progency.

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SaaS + Service Synergy – 2

In the ever-evolving digital landscape, the martech industry has witnessed a plethora of innovations, each promising to be the panacea for marketers’ challenges. However, a significant gap persists between the tools available and their effective utilisation. This need for solutions rather than just software is the opportunity for the progency.

At its core, progency challenges and transcends the traditional service model of an agency. It isn’t just another offshoot of the martech realm but is a pioneering creation created by a  martech SaaS entity (like Netcore). Imagine a product-centric company, deeply rooted in the intricacies of software development, deciding to venture beyond its comfort zone. Instead of solely focusing on product innovation, it chooses to layer its offerings with a curated suite of services. This strategic move is not just about diversification; it’s about recognising and addressing a palpable void in the market. It is about delivering full value from the product.

Historically, software companies have maintained a laser focus on their core competency: developing cutting-edge products. They’ve often shied away from the complexities of service delivery, preferring to collaborate with external partners who specialise in that domain. These partners, armed with human resources and expertise, bridge the gap between the product and its end-users. Conversely, servicing agencies, with their deep-rooted expertise in client management and solution delivery, have rarely ventured into product creation. They’ve remained content in their role as intermediaries, facilitating the interaction between software creators and consumers.

The progency disrupts this status quo. It emerges as the “third way” in martech, carving a niche that straddles the two extremes of software and services. It’s neither purely a product nor just a service; it’s a harmonious blend of both. This hybrid model offers a fresh perspective, challenging established norms and promising unparalleled value. It addresses the prevalent challenge of product feature underutilisation, a concern that often sees a mere 30-40% adoption rate across numerous martech platforms. Moreover, it provides a solution to the conundrum faced by standalone martech agencies, where the potential revenue from service offerings alone isn’t substantial enough to fuel scalable growth.

Being an offspring of a martech entity, the progency enjoys several inherent advantages. It has unfettered access to a reservoir of specialised talent. Data scientists who can decipher intricate patterns from vast data pools, campaign strategists (drawn from customer success teams) who can craft compelling narratives, and tech developers who can turn visions into tangible product extensions—all these experts converge under the progency umbrella. Such a confluence of diverse skills is rare and offers a depth of expertise that’s challenging for traditional agencies to replicate.

Furthermore, the martech lineage of progency ensures that it isn’t operating in isolation. It benefits from aggregated data sourced from a myriad of client implementations. These data points, rich in insights, become the bedrock upon which progency’s strategies are formulated. Every campaign, every solution, is data-driven, ensuring that decisions aren’t based on mere intuition but are backed by concrete evidence.

Additionally, the progency’s association with an established martech product amplifies its credibility manifold. In the eyes of prospects, it isn’t just another agency offering services; it’s a trusted entity that understands the nuances of the product inside out. This association acts as a stamp of authenticity, assuring clients of the quality and reliability of solutions offered.

In conclusion, progency is not just an innovation; it’s a revolution. By seamlessly integrating the strengths of software and services, it promises to deliver one-stop solutions that are both effective and efficient. In a market cluttered with tools and technologies, progency stands out as a beacon of hope, promising a future where martech solutions are not just acquired but are effectively harnessed to drive tangible results – profits at scale.

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SaaS + Service Synergy – 3

I asked ChatGPT to see what additional angles could be considered for the first progency advantage. Here is the response.

1. Customer-Centric Approach: Combining SaaS with service ensures that the product is not just technically sound but also tailored to the unique needs of each client. This customer-centric approach ensures that businesses aren’t just buying a tool, but a solution that evolves with their needs.
2. Faster Issue Resolution: With both product and service coming from the same entity, any issues or challenges faced by clients can be addressed more swiftly. There’s no blame game between the product provider and the service agency, leading to faster problem resolution.
3. Continuous Feedback Loop: The service team can provide real-time feedback to the product team, ensuring that the software is continuously improved and updated based on actual user experiences and needs.
4. Training and Onboarding: One of the challenges with adopting a new SaaS product is the learning curve associated with it. By offering services alongside the product, companies can provide hands-on training and onboarding, ensuring clients get the maximum value out of their investment from day one.
5. Cost Efficiency: Instead of clients having to invest separately in a product and then spend additional resources on hiring or training a team to use it, the combined model can often offer cost efficiencies. The integrated approach can lead to bundled pricing or performance-based pricing models that can be more economical in the long run.
6. Holistic Strategy Development: Service teams embedded within SaaS companies have a deep understanding of the product’s capabilities. This allows them to craft strategies for clients that fully leverage the product’s potential, rather than generic strategies that might not take full advantage of the software’s features.
7. Cultural Alignment: When both product and service come from the same entity, there’s a shared company culture and vision. This alignment can lead to smoother communication, better understanding of client needs, and a unified approach to problem-solving.
8. Future-Proofing: As industries evolve, the needs of businesses change. A combined SaaS and service model ensures that as the software evolves to meet industry changes, the service component can immediately adapt and guide clients through these shifts, ensuring they’re always ahead of the curve.
9. Trust and Credibility: Clients often feel more secure knowing that the team servicing them is directly associated with the product. This direct association can lead to increased trust and credibility, as clients feel they’re getting insights and services from the very experts who built the product.
10. Customisation and Personalisation: While SaaS products aim to cater to a broad audience, every business has unique needs. The service component can help in customising and personalising the product experience for each client, ensuring they get a solution tailored to their specific requirements.

I then asked ChatGPT about real-world progency examples. Here is the response (which I have not validated).

The concept of “progency” as has been described – a product-led agency that melds SaaS offerings with a layer of agency services – is relatively novel. However, the underlying idea of combining software with services isn’t entirely new. There are several companies and models that hint at this approach, even if they don’t label themselves as “progency.” Here are some real-world examples that align with the progency concept:

1. HubSpot: HubSpot offers a suite of inbound marketing, sales, and service software. While they primarily operate as a SaaS company, they also have a network of agency partners that provide services to help businesses make the most of the HubSpot platform. Additionally, HubSpot itself offers consulting and training services.
2. Adobe: Adobe, known for its suite of creative software, also offers consulting services. They help businesses implement and make the most of their software solutions, especially in the realm of digital marketing with products like Adobe Experience Cloud.
3. Salesforce: Salesforce, a leading CRM platform, has its consulting branch and a vast ecosystem of partners that offer specialised services to help businesses implement and optimise Salesforce solutions.
4. IBM: While primarily known as a tech giant, IBM has long combined its software and hardware products with consulting services. Their approach ensures that businesses don’t just get a product but a holistic solution.
5. Shopify Plus: Shopify’s enterprise solution, Shopify Plus, goes beyond just offering an e-commerce platform. They provide Merchant Success Programs and a range of services to help large businesses optimise their online stores.

8

Profipoly Stack Parallelism

Most companies will have an existing martech stack. For the progency model to work, its own stack will need to be integrated. I have dubbed this stack as the “profipoly stack.” This ensures that brands do not have to replace the tech they are already using. The profipoly stack’s purpose is to ensure that data and events flow to the progency enabling it to work in parallel with the brand’s marketing teams. While integrating a new system like the “profipoly stack” might seem daunting, the benefits far outweigh the initial setup efforts. Yes, there might be a need for additional tools like Javascript add-ons or SDKs, but these are mere gateways to a world of enhanced capabilities. The progency ensures that these integrations are smooth, reducing the friction that brands often face when adopting new technologies.

This approach has many benefits.

First, the progency can access real-time insights, making its operations more responsive and aligned with the brand’s ongoing marketing initiatives. The continuous exchange of data and insights between the two systems means that both parties are always on the same page and there is a single source of truth. This synergy can lead to more cohesive marketing campaigns, faster decision-making, and a unified vision for achieving business objectives.

Second, the introduction of the profipoly stack offers marketers a transformative lens, amplifying their capabilities and insights. This dual-system approach, akin to having two pairs of eyes on a challenge, ensures comprehensive insights, from macro trends to micro-level anomalies. It fosters agile campaign management, allowing for swift modifications based on real-time feedback. Enhanced segmentation precision ensures tailor-made messaging for each audience segment, maximising engagement. This collaborative synergy between systems not only drives data-informed strategies but also mitigates risks through redundancy. Furthermore, the flexibility of the profipoly stack encourages innovative experimentation, backed by the safety net of traditional martech tools.

Third, traditional martech agencies, while valuable, often find themselves restricted by the tools they use. They are, in many ways, at the mercy of third-party platforms, which can limit innovation and adaptability. The progency, with its proprietary stack and concomitant services, doesn’t face these constraints. It’s not just about having a tool; it’s about mastering it. And mastery comes from creation, understanding, and evolution, all of which are inherent in the progency model.

Fourth, the introduction of the profipoly stack doesn’t just address current challenges; it’s a step towards future-proofing a brand’s martech investments. As the digital landscape continues to evolve, having a system that can seamlessly integrate and work in tandem with existing solutions ensures that brands remain agile, adaptable, and ahead of the curve.

In conclusion, the progency’s introduction of the parallel “profipoly stack” is more than just a technological advancement; it’s a strategic masterstroke. It addresses the gaps in traditional martech, offers enhanced capabilities, and promises a brighter, more efficient future for brands and marketers alike – without imposing any additional costs.

9

Blue Ocean Customers

Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!

These lines from “The New Colossus,” a sonnet written by American poet Emma Lazarus in 1883, are inscribed on a bronze plaque and mounted inside the pedestal of the Statue of Liberty. They encapsulate the spirit of the United States as a land of immigrants, a refuge for those seeking a better life, and a beacon of hope and opportunity.

The progency concept can be likened to the welcoming embrace of the “tired, poor, and huddled masses.” Just as the statue stands as a beacon for those neglected and yearning for a better life, the progency model shines its light on the often overlooked “leftovers” in the marketing world – the customers who are not engaging, not converting, and not retained.

These neglected cohorts, much like the “tempest-tost” immigrants of yesteryears, are in search of a brand that understands and values them. By focusing on these segments, progency ventures into a “blue ocean” of untapped potential, minimising overlap with a brand’s primary initiatives. Instead of competing with or replacing existing strategies, the progency complements them, offering a holistic approach that ensures no customer is left behind. Just as the Statue of Liberty symbolises hope and a fresh start, the progency model promises renewed engagement and revitalised relationships with those who were once forgotten.

Historically, the relentless chase for new customer acquisition has overshadowed the latent value embedded within the existing customer base. Marketers have weekly and monthly growth targets to meet, and in their mind, the fastest approach is to ramp up new customer acquisition and focus on the Best Customers. Every marketer understands the cost implications of acquiring a new customer versus retaining an existing one. Yet, the allure of newness often blinds them to the goldmine of opportunities that neglected segments present. (Besides, they are incentivised on growth, not profits.) There is little time, energy, or budget to focus on the “leftovers.” This is where the progency comes in.

The progency beckons marketers to venture into the “Blue Ocean” of these overlooked segments. This Blue Ocean strategy, a concept that advocates for the creation of uncontested market space rather than battling competitors in a saturated market, aligns perfectly with the progency’s focus. By targeting these neglected customers, marketers can navigate uncharted waters, free from the fierce competition that characterises the “Red Oceans” of their industry. They can do this without taking away their focus on acquisition and Best Customers. By embracing the progency model and its Blue Ocean ethos, marketers ensure that “no customer is left behind.”

10

EnCoRe Triad

Just as a health checkup provides us with critical parameters to gauge our well-being, businesses too have their vital signs. In the financial world, we monitor revenues, sales, and profits. In adtech, metrics like cost per click translate to customer acquisition costs. But in martech, there’s a glaring absence of universally accepted success metrics, especially when compensation is tied to tangible outcomes.

In a previous discussion on the Profipoly Score, I introduced a comprehensive metric system:

• A mini-Profipoly Score based on 5 key numbers (scaled to 50 points)
• A Frictionless Score derived from actions addressing the 5 frictions (scaled to 25 points)
• A score for innovation adoption and actions taken (scaled to 25 points)

I had written: “The Profipoly Score is a tracker for measuring the progress in the transformational journey towards exponential forever profitable growth. It is a leading indicator for the health of the business, a metric which will indicate the capacity of a business to maximise the profits pool in an industry. The Profipoly Score needs to become as important as earnings per share and NPS in the management lexicon.”

For more immediate, day-to-day tracking in martech, I present the EnCoRe Triad:

• Engagement: The percentage of all contacted consumers who engaged across any channel in the last three months.
• Conversion: The percentage of all visitors who made a transaction in the past three months.
• Retention: The percentage of customers who have made more than one transaction.

Taken together, they form the EnCoRe Triad, a health check for martech.  If a brand’s metrics stand at 20% Engagement, 15% Conversion, and 40% Retention, its EnCoRe Triad reads as (20, 15, 40).

Building on this, the EnCoRe Number is derived by multiplying these three metrics and counting the digits of the result. Using the previous example, the EnCoRe Number is 5, as 20 x 15 x 40 = 12,000, which has 5 digits. The pinnacle of this scale is 7, achieved with a perfect score of 100 x 100 x 100 = 1,000,000.

The EnCoRe Triad isn’t just a set of numbers; it’s a compass that guides marketers and progency towards sustainable growth. By breaking down customer interactions into Engagement, Conversion, and Retention, the Triad offers a clear roadmap for targeted interventions.

Engagement is the gateway to all customer interactions. To boost this metric, marketers, with the aid of progency, can employ personalised content strategies, interactive campaigns, and omnichannel outreach. By understanding the preferences and behaviours of their audience, they can tailor communications that resonate and captivate. For instance, leveraging AI-driven insights can help in segmenting the audience and delivering content that speaks directly to their interests and needs. Inbox Commerce is another approach to drive more engagement.

Conversion is the heart of revenue generation. To elevate conversion rates, it’s essential to optimise the customer journey. This involves streamlining the website or app navigation, ensuring a seamless checkout process, and perhaps most crucially, predicting next best actions. building trust. The progency can assist by integrating tools that provide real-time support, like chatbots, or by implementing trust signals such as reviews, testimonials, and security badges. A/B testing landing pages, offers, and call-to-action buttons can further refine the conversion process, ensuring that visitors are not just browsing but buying.

Retention is the key to sustainable growth. Acquiring a new customer is often more costly than retaining an existing one. To enhance retention, marketers and the progency can work together to create loyalty programs, offer exclusive deals, and solicit feedback to continuously improve the customer experience. Reactivation also becomes an important alternative to reacquisition for the “one and done” customers.

[For an in-depth discussion on how to address the frictions at each stage of the customer journey, see   ProfitXL to Profipoly: Solving the Four Funnel Frictions, Solving eCommerce’s Fifth Funnel Friction: Identifying Unknown Shoppers and Email 2.0: The Fulcrum for Fixing Five Funnel Frictions.]

In essence, the EnCoRe Triad provides a 360-degree view of the customer lifecycle. By focusing on each metric individually, while understanding their interdependence, marketers and the progency can craft strategies that not only boost these numbers but also drive long-term profitability.

The progency also has a pivotal role in benchmarking a brand’s metrics within its industry. By juxtaposing a brand’s metrics against industry medians and best-in-class standards, the progency outlines the roadmap for desired outcomes.

11

Pay for Performance

In the ever-evolving world of marketing, the progency model stands out as a beacon of innovation, particularly in its approach to compensation. At its core, the progency’s performance-based compensation model is a testament to its commitment to delivering tangible results. Unlike traditional models where payment is made either for the platform or for services rendered, regardless of the outcome, the progency model ties compensation directly to the revenue expansion achieved for brands. This approach ensures a symbiotic relationship where both parties are invested in the same goal: driving growth.

The beauty of this model is its inherent alignment with brand objectives. Every brand seeks to maximise its revenue and profitability. By tying the progency’s compensation to this key metric, brands can be assured that the progency’s strategies and actions are geared towards this singular objective. There’s no ambiguity or misalignment; the progency thrives when the brand thrives. This creates a level of trust and partnership that is rare in vendor-brand relationships.

Contrast this with the traditional martech vendor approach. While martech vendors often have customer success teams in place, their metrics for success might not always align with the brand’s true objectives. For instance, a martech vendor might measure success by the volume of push messages sent, as it directly correlates with their revenue. However, bombarding customers with excessive messages might have a negative impact for the brand, leading to decreased engagement or even unsubscribes. In such a scenario, the martech vendor’s success metric is at odds with the brand’s objective of building meaningful and lasting customer relationships.

The progency model also mirrors the adtech industry’s cost-per-click pricing, where payment is made based on tangible results, i.e., clicks. This approach has revolutionised the advertising industry, ensuring that brands get value for every penny spent. The progency model takes this a step further by not just focusing on clicks but on actual revenue generation. It’s a more unified approach that considers the entire customer journey, from awareness to purchase.

Consider this scenario: Suppose the progency successfully generates an additional million dollars in revenue from Blue Ocean customers – revenue the brand might not have captured otherwise. In such a case, the progency could propose a 20% share of this revenue. Given the value delivered, the brand should readily agree to this arrangement. This positions the progency akin to a franchisee, unlocking new revenue from previously untapped customer segments for the brand.

Furthermore, by rewarding the progency with a share of the incremental sales, brands acknowledge and incentivise the value the progency brings to the table. This is not about paying for effort but for results. It’s a recognition that the progency’s strategies and interventions are unlocking revenue streams that might have otherwise remained untapped. This approach transforms the progency from a mere vendor to a true business partner, one that is deeply invested in the brand’s success.

The “Pay for Performance” model of the progency is a game-changer. It ensures alignment of objectives, rewards tangible results, and fosters a partnership approach. In a world where marketing dollars are scrutinised for RoI, this model ensures that every dollar spent is a dollar that drives growth. It’s a win-win for both brands and the progency, setting the stage for a collaborative and fruitful relationship.

I asked ChatGPT for additional pointers on the “Pay for Performance” theme. Here is what it suggested.

• Risk Mitigation for Brands: One of the primary advantages of the “Pay for Performance” model is that it minimises financial risk for brands. Instead of paying upfront for services with uncertain outcomes, brands only compensate the progency based on tangible results. This ensures that brands get value for their investment.
• Transparency and Trust: “Pay for Performance” fosters a transparent relationship between the brand and the progency. Both parties have clear visibility into goals, metrics, and outcomes. This transparency builds trust, as brands can see exactly what they’re paying for.
• Dynamic Adaptability: In a rapidly changing market landscape, strategies need to be agile. A performance-based model allows the progency to quickly adapt strategies based on real-time data and feedback, ensuring that they’re always employing the most effective tactics to achieve desired outcomes.
• Long-Term Partnership: Traditional vendor-client relationships can sometimes be transactional. However, when both parties’ successes are intertwined, it fosters a deeper, long-term partnership. The brand and progency become collaborators in a shared journey towards growth.
• Budget Efficiency: With a performance-based model, brands can allocate their budgets more efficiently. Instead of allocating a fixed amount for marketing efforts, they can invest more in strategies that yield results and reduce spending on less effective tactics.

12

Infinite Budgets

Central to adtech’s meteoric rise has been its adoption of the “Cost of Goods Sold” (COGS) model. On the surface, adtech spending appears to be driven by metrics like cost per click. However, in essence, these costs are intrinsically tied to tangible transactions, effectively anchoring them to COGS. This strategic alignment allows adtech to claim a substantial chunk of a brand’s budget, often in the ballpark of 15-20%.

In stark contrast, the martech industry has traditionally operated with a more conservative budgetary approach. Most martech budgets linger in the low single digits, determined by metrics such as the volume of messages sent and the count of monthly active users. This model, while efficient in its domain, inherently caps the potential growth and influence of martech. The budgets are static and predefined, often perceived as an operational expense rather than a direct revenue catalyst.

Enter the progency, with a business model that promises to redefine the financial dynamics of the martech industry. By adopting a COGS model similar to adtech, the progency model positions martech spending as a direct investment in revenue generation, rather than a mere operational cost. This shift in perspective has profound implications.

By aligning martech spending directly with revenue, brands are incentivised to invest more robustly in martech solutions. No longer bound by rigid budgets, brands can dynamically allocate resources based on anticipated return on investment. If a specific strategy or tool demonstrates potential to drive substantial revenue, brands can confidently channel investments into it. This approach not only justifies the costs but also emphasises the strategic importance of nurturing and monetising existing customer relationships, rather than solely focusing on acquiring new ones.

The silver lining here is that ample budgets already exist. Brands simply need to reallocate a portion of their AdWaste expenditure – often constituting half of their marketing budgets – a towards the progency. Considering the prevailing low benchmarks in engagement, conversion, and retention for many brands, there’s a vast potential for growth. And the best part? This can be achieved at a fraction of the cost compared to acquiring new customers through auctions.

Furthermore, by positioning martech spending as COGS, the progency model also encourages a more comprehensive approach to marketing. Instead of viewing martech as a series of isolated tools or strategies, brands can start to see it as an integrated ecosystem, where each component contributes to the overall revenue. This shift in perspective can lead to more cohesive marketing strategies that leverage the full potential of the martech landscape.

The potential benefits of the progency model extend beyond individual brands. By expanding the size of the martech industry, the progency model can drive innovation, competition, and growth across the entire sector. As more brands adopt this approach, martech providers will be incentivised to develop better tools, strategies, and solutions, leading to a virtuous cycle of growth and innovation.

In conclusion, the progency model, with its emphasis on limitless budgets and a COGS approach, represents a bold and promising vision for the future of the martech industry. By aligning financial incentives with revenue generation, it promises to unlock the full potential of martech, driving growth, innovation, and success for brands and providers alike. In a world where digital marketing is more important than ever, the progency model offers a path to a brighter, more prosperous future – a win-win-win for brands, customers, and martech vendors who embrace the progency vision.

13

Anti-Progency

I asked ChatGPT to write a critique of the Progency model.

Critique of the Progency Model

The progency model, while innovative and promising in its approach to melding product offerings with agency services, is not without its potential pitfalls. Here are some reasons why brands might be hesitant to adopt it and the potential downsides associated with the model:

Complex Integration: While the Progency model promises a seamless integration of its proprietary martech suite, the reality of integrating a new system with existing infrastructures can be daunting. Brands might face technical challenges, potential data breaches, or compatibility issues.

Dependency on a Single Entity: By relying on the progency for both product and service, brands put a lot of trust in one entity. If the progency fails to deliver on either front, it could lead to significant disruptions in the brand’s operations.

Cost Implications: The performance-based pricing model might seem attractive, but it could end up being more expensive in the long run, especially if the progency consistently drives significant results. Brands might find themselves paying more than they would in a traditional fixed-cost model.

Potential for Misaligned Objectives: While the progency model emphasises alignment with brand objectives, there’s always a risk that the progency might prioritise its own growth and profitability over the brand’s long-term goals.

Loss of Control: By outsourcing a significant portion of their marketing operations to the progency, brands might feel they’re losing control over their strategies and customer data. This could lead to concerns about data privacy and strategic direction.

Scalability Concerns: As brands grow and evolve, their needs might outpace the capabilities of the progency. There’s a risk that the progency model, while suitable for a particular stage of the brand’s growth, might not be adaptable enough for future requirements.

Market Skepticism: Given that the progency model is a departure from traditional marketing approaches, it might face pushback from stakeholders. Brands might be wary of adopting a model that hasn’t been widely tested or validated in the broader market.

Potential for Complacency: With the progency taking on a significant role in driving results, brands might become complacent, relying too heavily on the progency and failing to innovate or develop their internal capabilities.

Cultural and Communication Barriers: If the progency operates from a different region or country, there might be cultural and communication barriers that could hinder effective collaboration.

Long-Term Viability: The martech industry is rapidly evolving. What seems innovative and effective today might become obsolete tomorrow. Brands might be concerned about the long-term viability of the progency model in an ever-changing landscape.

In conclusion, while the Progency model offers a novel approach to addressing some of the challenges faced by brands in the martech space, it’s essential for brands to weigh these potential benefits against the risks and downsides. Adopting the Progency model requires a leap of faith, and brands need to be fully aware of the implications before making such a commitment.

I then asked ChatGPT to provide responses to each of these criticisms.

Complex Integration: Offer a dedicated integration team from the progency side that works closely with the brand’s IT department. Provide comprehensive documentation, training sessions, and ongoing support to ensure smooth integration. Utilise APIs and standardised integration protocols to minimise technical challenges.

Dependency on a Single Entity: Maintain transparency in operations and regular communication. Offer trial periods or pilot projects to demonstrate the progency’s reliability and effectiveness. Ensure robust service level agreements (SLAs) are in place to protect the brand’s interests.

Cost Implications: Implement a hybrid pricing model that combines fixed costs with performance-based incentives. This ensures predictable budgeting while still incentivising outstanding performance.

Potential for Misaligned Objectives: Establish clear KPIs and regular review meetings to ensure alignment. Create joint strategic planning sessions where both the brand and the progency collaborate on long-term goals.

Loss of Control: Solution: Implement a collaborative approach where the brand retains decision-making authority. Ensure that the brand has access to all data and insights, and involve them in major strategic decisions.

Scalability Concerns: Design the progency model to be modular and scalable. As the brand grows, additional modules or services can be added without overhauling the entire system.

Market Skepticism: Showcase successful case studies and testimonials from early adopters. Offer workshops, webinars, and educational content to familiarise the market with the progency model’s benefits.

Potential for Complacency: Encourage brands to maintain an internal team that collaborates with the progency. This ensures the brand remains engaged and continues to build its internal capabilities.

Cultural and Communication Barriers: Invest in cross-cultural training for the Progency team. Utilise communication tools and platforms that facilitate real-time collaboration. If possible, have local representatives or offices to bridge any cultural or time-zone gaps.

Long-Term Viability: Ensure the progency model is adaptable and agile. Regularly update the technological stack and services offered based on industry trends and feedback from brands. Foster a culture of continuous learning and innovation within the progency.

By proactively addressing these concerns, the Progency model can position itself as a reliable, effective, and forward-thinking solution for brands navigating the complexities of the martech landscape.

14

Summary – 1

The progency model can help brands emerge as profipolies. This harmonious blend of product and agency strategies offers a suite of advantages that can redefine the dynamics between brands and martech companies.

SaaS + Service Synergy: At the heart of the progency model is the unique fusion of SaaS and service. This holistic approach, where a martech entity owns and operates the progency, ensures that brands benefit from both technological prowess and strategic expertise. It’s a synergy that promises efficiency, adaptability, and a deep understanding of the brand’s needs.

Profipoly Stack Parallelism: The progency’s technological cornerstone is its proprietary “profipoly stack.” Rather than replacing existing systems, this stack is designed to coexist, working in tandem with a brand’s current infrastructure. This parallelism ensures seamless integration, data flow, and maximised operational efficiency.

Blue Ocean Customers: One of the progency’s standout features is its emphasis on the often-neglected “Blue Ocean” customer segments. By targeting these overlooked cohorts, the progency model transforms latent potential into active revenue streams. It’s a strategic pivot that ensures every customer, regardless of their engagement level, is catered to cost-effectively.

EnCoRe Triad: In the realm of metrics and measurements, the progency introduces the EnCoRe Triad – a trio of pivotal metrics encompassing Engagement, Conversion, and Retention. These metrics serve as a compass for brands, guiding strategies and ensuring efforts are channelled towards tangible growth.

Pay for Performance: Borrowing a leaf from the adtech playbook, the progency’s compensation structure is intrinsically tied to tangible outcomes. This ensures a symbiotic relationship between brands and the progency, with investments directly correlating to returns. It’s a model that ensures brands are not just purchasing promises but investing in guaranteed results.

Infinite Budgets: Challenging the traditional confines of martech spending, the progency model advocates for a “Cost of Goods Sold” perspective. This shift empowers brands with the flexibility to allocate resources based on potential returns, ensuring that every dollar spent is in pursuit of maximising revenue.

Drawing from the playbook of the IT outsourcing industry, the progency model champions adaptability, a client-first approach, and continuous innovation. While IT outsourcing entities thrived by tailoring solutions and ensuring scalability, the progency model goes a step further, embedding a profound comprehension of client needs and an uncompromising dedication to excellence. However, a stark distinction sets them apart. Unlike traditional IT service firms that predominantly remained in the service domain, the progency is birthed atop its creator’s SaaS platform.

For martech firms, adopting the progency model isn’t just a choice; it’s a pivotal strategic move. This approach provides a unique competitive advantage, paving the way for growth and steering them towards their own profipolies. It also offers an escape from the saturated red ocean, reducing the reliance on switching brands based on lowering prices.

In conclusion, the progency model represents the next evolutionary step in martech, perfectly aligned with the profipoly blueprint. Just as profipoly can herald the fourth wave and ultimate horizon of marketing, the progency embodies the essence of Martech 2.0, encapsulating the vision of exponential forever profitable growth.

15

Summary – 2

I decided to take an alternate view from Claude. I asked it for 100-, 200-, and 4000-word summaries.

100-word summary

The progency model fuses martech products and services to help brands maximise profitability. Key differentiators are martech company ownership, a proprietary tech stack, focusing on neglected customers, performance-based pricing, and limitless budgets. This SaaS-service synergy, using new metrics and targeting overlooked segments, is uniquely positioned to address brands’ profitability challenges. Progency emerges as an indispensable catalyst for the profipoly vision of maximising lifetime value.

200-word summary

The progency model represents an innovative new approach in martech, integrating SaaS products with specialised services. Created by martech companies, progencies leverage proprietary tech stacks and performance pricing to deliver outcomes for brands.

Six key differentiators make progencies transformative:

First, as offshoots of martech firms, progencies enjoy privileged access to specialised talent and aggregated user data to refine strategies. Their credibility is also boosted by association with an established martech product.

Second, progencies introduce parallel proprietary stacks called “profipoly stacks”. By seamlessly integrating with existing martech solutions, these provide enhanced capabilities without imposing additional costs.

Third, progencies focus on neglected “Blue Ocean” customers, complementing rather than competing with brands’ existing initiatives focused on new acquisition and top customers.

Fourth, new metrics like the “EnCoRe Triad” offer clear visibility into progencies’ impact on engagement, conversion and retention.

Fifth, by tying compensation to incremental revenue, progencies align incentives around a shared objective of profitability.

Finally, mirroring adtech’s approach, progencies have boundless budgets, incentivising continuous innovation.

Together, this SaaS-service fusion, powered by new metrics and a focus on overlooked segments, positions progencies as indispensable profitability catalysts. They fill the execution gap between martech tools and profits realisation. For brands pursuing the profipoly vision of maximising lifetime value, progencies are the missing link.

400-word summary

The progency model represents a pivotal innovation in the martech ecosystem, integrating the strengths of SaaS products and specialised agency services into a unified offering. Created by martech companies, progencies differentiate themselves through six key attributes:

Firstly, being offspring of martech firms, progencies enjoy privileged access to specialised talent like data scientists, campaign strategists, and tech developers. This depth of expertise is challenging for traditional agencies to replicate. Moreover, as internal divisions, progencies benefit from aggregated insights across client implementations to refine strategies. Their direct association with an established martech product also bestows greater credibility.

Secondly, progencies introduce their own proprietary martech suites called “profipoly stacks.” While necessitating additional integrations, these stacks ensure progencies retain full control over the technology. Traditional martech agencies rely on preinstalled third-party stacks, restricting innovation. Progencies’ autonomy over tech stacks facilitates rapid deployment of new capabilities to drive outcomes.

Thirdly, progencies carve a niche by focusing on neglected “Blue Ocean” customers – those not engaging, converting or being retained. This complementary positioning minimises competition with brands’ existing initiatives focused on new acquisition and top customers. Progencies fill the gap, revitalising relationships with overlooked segments.

Fourthly, progencies champion new metrics like the “EnCoRe Triad” – Engagement, Conversion, Retention percentages. This offers transparent tracking of progencies’ impact on outcomes linked to profitability. The metrics provide a roadmap for interventions to boost numbers and also facilitate objective revenue sharing agreements between brands and progencies.

Fifthly, progencies’ performance-based compensation, a percentage of incremental revenue, creates perfect alignment with brands’ profitability goals. By contributing to otherwise untapped revenue streams, progencies transform from vendors to genuine partners invested in mutual success. This pay-for-performance model mirrors adtech’s cost-per-click approach.

Finally, by adopting adtech’s “Cost of Goods Sold” perspective, progencies can justify limitless budgets for brands. This empowers brands to dynamically allocate spends based on potential ROI rather than arbitrary caps. Progencies have the upside of expanded earnings for overperformance, incentivising continuous innovation.

Together, this strategic fusion of specialised SaaS offerings and targeted services positions progencies as indispensable profitability catalysts. Blending new metrics, engagement models and pricing structures, progencies fill the chasm between martech tools and true profits realisation. For brands pursuing the profipoly vision of maximising customer lifetime value, progencies are the missing link to exponential forever profitable growth.