How to Make Money with Web Dev, with Luke Summerfield

Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Agency Management Institute’s Build a Better Agency Podcast, presented by HubSpot. We’ll show you how to build an agency that can scale and grow with better clients, invested employees, and best of all, more money to the bottom line.

Bringing his 25+ years of experience as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Drew McLellan here with another episode of Build a Better Agency. Thanks for coming back or thanks for joining us for the first time if this is your first episode. If this is your first episode, you picked a good one.

We are going to talk about a topic that many agency owners and leaders scratch their head around, and that’s the whole idea of actually making money with web dev. And so, today, my guest has quite a depth of expertise in this category, in this area. And so I’m going to pick his brain as best I can to get as much thought-provoking content and ideas and new ways for you to think about things as I can in the hour that we have.

So let me tell you a little bit about him. So, Luke Summerfield works at HubSpot. He’s been there a few years. He actually leads an internal startup at HubSpot called Growth-Driven Design. And that startup is focused on really transforming the way that web design and the web design industry builds and optimizes websites.

So they are built on the model that you would expect, very much like a lean startup and with a lot of experimentation. But they have grown to serving over 940 agencies in the first 12 months of service. And those agencies are in 50 countries that are now offering Growth-Driven Design to their clients.

Prior to joining HubSpot, Luke was with a digital marketing agency, and it was acquired in 2014. And so then he moved over to HubSpot. So, Luke, welcome to the podcast.

Luke Summerfield:

Yeah. Thank you so much for having me.

Drew McLellan:

So let’s start right off because people are I’m sure going, “Okay. What is Growth-Driven Design?” So let’s start just right off the bat by defining that for folks.

Luke Summerfield:

Yeah. Growth-Driven Design is essentially a smarter approach to web design. I think a lot of it will get into the story of where it came from and the story will sound pretty similar to a lot of you that are listening today.

All of you are my people, my agency folks are my people, so I’m glad to be on here. So we’ll talk about the story. But essentially, what Growth-Driven Design is, is a smarter approach to web design that minimizes all of the risks, all of the headaches, all the frustrations, not only for your clients, but also for you as an agency owner.

It is a smarter approach to web design that continuously improves using data and experimentation to inform how to improve the site over time. And it’s a smarter approach to web design that informs other parts of the business.

So as you’re learning about your users, as you’re collecting that data and making decisions on how to improve the website, how does that impact what you’re doing on the sales side of things? When you’re helping their sales teams, how is that impacting what’s going on with the marketing? And vice versa.

As their product team, as their customer service team, as you’re learning on the marketing team, how do those other things that you’re learning help impact what you build on the website?

Drew McLellan:

Okay. And so is this tool-agnostic? Does it matter what I’m building the website in?

Luke Summerfield:

It is tool-agnostic. So it’s just a methodology and a process. And for many of you, it’s probably nothing… You’re probably doing bits and pieces of this. I invented nothing new. I just pulled a lot of different ideas from the startup world, how startups scale and grow, and where they focus.

I pulled a bunch of ideas from the conversion rate optimization and user experience world. And I pulled some ideas from what our internal product growth teams are doing. So what we’re doing to try and build our software, and what a lot of the product growth teams in Silicon Valley are doing.

And really pulled all those ideas together into something that allows you to be able to execute with your team, but is also in a very packaged way to easily educate and sell to prospects and easily execute on the services side.

Again, it’s tool-agnostic. It’s just a process, it’s just a methodology. And again, you may already be doing bits and pieces. Hopefully, something that you can easily jump into.

Drew McLellan:

So you were at HubSpot and you were doing a more mainstream job. How did you move into leading an internal company inside the company?

Luke Summerfield:

I would say I actually started in a non-traditional role because I actually didn’t have a role. Previous to HubSpot, as you mentioned, I was working for an agency. And happy to chat about that. That’s where the original idea of Growth-Driven Design came in.

And when I got hired by HubSpot, they essentially hired me without a position and just said, “We know you’ll find some way to provide value and help our agencies grow.” I said, “Okay, cool.” And that’s pretty cool, but that also is a little bit daunting not to have-

Drew McLellan:

A little bit of pressure. Right.

Luke Summerfield:

No defined guidelines or roles. It was just, “Figure it out.” And so they gave me two company-wide metrics that I was focused on trying to improve, and then that was about it. They said, “Go figure it out.”

And so I thought back to my agency days and the things that we struggled with as an agency, and some of the problems that we were trying to solve. And one of those problems, I tried maybe 10 different experiments, and the one experiment at HubSpot that I tried with agencies that really started building traction quickly was this idea of Growth-Driven Design.

Really, what it was, was trying to solve the things that many of you listening are probably experiencing, unprofitable web projects that are going over budget, getting delivered late.

Drew McLellan:

Right. Out of scope.

Luke Summerfield:

Out of scope, right? Scope creep never happens, right?

Drew McLellan:

No.

Luke Summerfield:

Everyone, every single project. To give you a little background on the agency when I worked there, we were a three-person dev shop. Specifically, when we started, it was Joomla 1.0. So for anyone in the Joomla world, you can remember back to Joomla 1.0 days.

And we grew. We became HubSpot partners in over about three and a half years. We were gold partners with them on the marketing side. But that was still only 25% of our revenue. 75% of our revenue was coming from web design. And so what ended up happening is we were growing 40% revenue year-over-year.

And Gabe, the owner, was really smart. And he said, basically, if we keep growing like this, the train’s going to come off the tracks.

Drew McLellan:

Yeah. Right.

Luke Summerfield:

We’re going to really start to implode, growing from three to 15 in three years and just the revenue side of things as well. And so we took a step back. And what my role at that point was during that year is we said we only want to grow 10%.

We want to fire our worst clients, and we want to really be picky on who we bring on. And then we really want to focus on our processes and our operations to make sure that we can become profitable and really build this machine for scaling past 15.

And when we looked at that, one of the biggest problems we ran into was the 75%, which was our web design revenue. Inevitably, they always, again, went out of scope. The scope creep happened, went out of scope, which that time has to come from somewhere.

In some cases, we could go back to clients and say, “Look, this is a whole new feature, something we didn’t talk about. We’re happy to build it, but we have to expand the size of the engagement and do an addendum onto the contract.” But most of the time, it creeps up on you. It’s like a scope creep, they call it that for a reason.

You’ll have 20 minutes here, an hour extra there, 35 minutes here, just little things that, over the course of a six-month-long project, really add up to a good chunk of time. And inevitably, your agency usually eats that time. And that means that your profit margins tank, and you essentially…

Drew McLellan:

Right.

Luke Summerfield:

We had projects that we worked on for four months and we looked back and we actually lost money. We paid to work for the last four months with our developers.

Drew McLellan:

Yeah. That’s a painful thing is to realize you’re actually paying for the privilege of doing the work. Yep.

Luke Summerfield:

Well, believe it or not, we’re all businesses, as passionate as we are and as much as we love doing this stuff. And we probably would do it for free. We are businesses and we have teams that we have to pay.

Drew McLellan:

Right. Yeah, not a great plan. Yep.

Luke Summerfield:

And we all have goals that we’re trying to get to in terms of where we’re growing our businesses. That was a big blow. So really what we looked at is, the other thing with the web design clients, if they were not in a marketing engagement with us, we were essentially building the website and having a pretty tight-knit relationship with them over three to six months.

And then we would basically say, “All right, we’ll talk to you later.” And we really wouldn’t talk to them until they needed another website a year and a half to two years later. And we knew that we were not doing the best for getting our clients to their goals by just leaving them hanging. But also, we were leaving money on the table.

Drew McLellan:

Right.

Luke Summerfield:

And so when we looked at the inbound marketing side of our business, which was a retainer-based business model where you signed up for 12 months or six months and you had a specific amount each month, and we just continued working with you and growing over time, that type of not only business model, but the value that our clients were able to get from that model of continuously improving, continuously working, continuously bringing value, made a lot more sense.

Then we had this other business over on the other side of the web development that was bits and pieces. So, way back when, in recognizing this problem, we took that year of slow growth but really firming up the business. We looked at launching a service called Continuous Web Improvement. And it was not the sexiest name, but really, the idea was we’re going to launch a site and then we’re going to improve off of it after that.

And that was the seed that eventually was brought into with Growth-Driven Design. And so we ended up getting acquired shortly after that. And because of that, the idea fizzled out a bit. And when I came to HubSpot, tasked with how do I help our agencies grow? How do we help our different businesses grow? I thought back to the challenges that I ran into and what we were trying to solve for ourself.

And it really was a challenge that we’re all struggling with. It wasn’t just our agency.

Drew McLellan:

Yep. Right.

Luke Summerfield:

It’s an industry-wide problem. And on the flip side, your clients, whether they tell you or not, they hate doing website redesigns. It is a pain in the butt.

Drew McLellan:

Well, they want to do it once and then be done forever. Yeah.

Luke Summerfield:

And because the process is so painful for them.

Drew McLellan:

Right. Right.

Luke Summerfield:

And so all of that really seeded what has now evolved into Growth-Driven Design as it sits today, which as you mentioned, now, a year after launching it officially with our certification, we now have over a thousand agencies in 50 countries servicing their clients with Growth-Driven Design.

And the growth of that really just ties back to the pain that we’re all really feeling, and then the success stories that a lot of them are experiencing.

Drew McLellan:

So I know when I spend some time on growthdrivendesign.com that there are some phases or steps that are the cornerstones of this process. Walk us through those and help us understand how they’re different from what everybody else is doing as they piecemeal together websites.

Luke Summerfield:

Sure. The methodology has essentially three steps. On a high level, the first step is probably what you’re doing today, or a lot of you are doing today, which is the strategy step. And really what the goal of the strategy step is, is to get an empathetic understanding of the world of your client’s audience, right? So who are their personas or who are the people that they’re serving? And to get a view into their world.

And now, what that’s going to allow us to do, so that really leans into a lot of the UX and UX research side of things, so that you can gain that really deep understanding. We use things like the goal-setting of what kind of goal is the client trying to achieve and where does the website fit in? Where does the website act as a lever to try and achieve that goal?

And we also look outside of just generating leads. A lot of times as marketing agencies, that’s what they’re hiring us for.

Drew McLellan:

Sure.

Luke Summerfield:

But in reality, they’re hiring us to grow their business. And in some cases, that may be you working on their website to help them with recruitment efforts. It may be trying for them to decrease support tickets, so you’re building a knowledge or a support section onto their website.

It could be building sales-enablement materials into the site. There’s a lot of different aspects the website touches on in the business other than just generating leads. So we really need to flush some of that out in the goal-setting.

Then we go into what we call the jobs-to-be-done framework. That’s a framework that’s being adopted by many of the product teams in Silicon Valley now. And that allows you to figure out what kind of job is the client’s audience hiring your client for. What kind of progress are they trying to make in their life?

And then how do we position and talk about some of the things that are involved in the jobs-to-be-done framework? And we could probably talk all day just about that.

Drew McLellan:

Right.

Luke Summerfield:

So we go through jobs-to-be-done, we go through persona development once we have that. Many of you are probably familiar with personas. Then we get into journey mapping and so on and so forth. We really want to get a detailed look at the person’s world.

Because what we want to do is we want to build a website that is woven into that story that person is on, that journey that person is on. Whereas traditionally, we build a site in its own bubble, and then we throw it at them, and hopefully, it sticks at certain points during that journey.

Drew McLellan:

Right.

Luke Summerfield:

Versus starting with the journey and then building around that. Now, all of that probably sounds pretty familiar to you, any of you that are doing a bit more UX and a bit more user experience research.

Now, where it gets a bit different is at the end of the strategy, the goal is to come out with what we call a wishlist. And a wishlist is 75 to 200 or more ideas of all of the most impactful, most important things that you can build to help provide value to that end audience, we call them the end-users.

And to, at the same time, allow the business to capture a bit of that value in the sense of lead generation, or if it’s an E-commerce store, a sale. Whatever that is.

Drew McLellan:

So give us some examples of what might show up on a wishlist.

Luke Summerfield:

Sure. It could be, from a very high level, sections that need to be on the site. It could go all the way down to very granular stuff like certain specific integrations that need to happen on the backend. It could be strategic partnerships with other websites.

There’s a very big range from small to high. And that list is going to come from the research that you do when you’re looking at your users and trying to basically problem-solve the problems they’re running into, and then turn that into things you can build on the site to solve those problems. It’s also going to depend on what they have on their existing site. Right?

Drew McLellan:

Sure.

Luke Summerfield:

So they’re going to have things that are on their existing site that are providing value, that are helpful, and you have to figure out how do we adapt and migrate or weave that into the new site.

And then, of course, the business itself probably has goals related to, again, recruiting or HR, or it could be the services team that’s trying to decrease support tickets. Whatever those goals are that are business needs.

And what you need to do as a team is you need to strategically organize that wishlist based off of the impact that those things have on the goals that you’re trying to achieve and the value or problems that the end-users are trying to solve.

Again, could be very high, could be, “We need this whole section,” could be very, very granular where it’s like, on the pricing page, we need to have a chat feature or we need to have some type of way to solve this common question that we always hear that our sales reps are always, always hearing. But we want to address that ahead of time before they talk to a sales rep on the pricing page.

Drew McLellan:

Okay. And so again, I’m guessing the listeners are going, “Yep. Yep. Yep.” In some fashion or form and often not the same way, more than once, we do that. Right? So what does phase two contain?

Luke Summerfield:

So phase two is essentially building what we call a launchpad website. And a launchpad website is a site that looks better than what they have today, it performs better than what they have today, but it’s not the final product. It is not perfect.

Drew McLellan:

When I was looking at the site, I love the sentence, “Quickly build a website.” And I thought, “Okay, how often does that happen?” Right?

Luke Summerfield:

Well, in traditional, it doesn’t because here’s the problem with traditional; the problem with traditional design is that the client feels like every single thing needs to be absolutely perfect. All the features they ever want, need to be in there. All the pages from other folks, all the content needs to be done a hundred percent perfect because once it launches, they’re not going to touch it again.

Drew McLellan:

Right.

Luke Summerfield:

That’s just their mentality with traditional. And so that’s been a little bit of an educational process that happens in the sales process that you have to get them to understand that, “Look, that’s not possible.

And there’s no such thing as perfect. And if we chase perfect, you’re going to run into all the frustration. You’re going to run into all the scope creep. You’re going to run into all these problems that you always hit because we’re trying to chase that perfect.”

Drew McLellan:

And even if you get perfect today, by tomorrow, some piece of it will be obsolete.

Luke Summerfield:

Exactly.

Drew McLellan:

Yeah.

Luke Summerfield:

Exactly. And what we consider complete today, they’re always going to be changing, adding not only new things, but also, you can always optimize the existing things.

And so really, that’s what the launchpad website is all about. And there’s multiple ways you can go about building a launchpad website. I think the misconception that everyone jumps to right away is to just cut down all their content, build a small incomplete site.

And that might work for some clients. There may be a startup or there may be someone who already has a small site that they can start with something small. But, of course, you have enterprise-level clients that have large sites; you may not be able to go that route.

And so there’s a number of different routes and a number of different ways that you can… Essentially, the goal is to launch something that looks and performs better, and you launch it quicker than if you did traditional design.

And the reason being is that when we go about building a website, we try to collect as much data as we can, but really, we’re operating within a bubble. The things that we’re building are assumptions of what we think work well. And those assumptions are based off of industry best practices, maybe what worked well in the past, what design trends are. They’re still assumptions.

Just because it worked with one client, does not mean it’s going to work well for that client, even if they’re in the same industry. They could have different audiences.

Drew McLellan:

Right.

Luke Summerfield:

And so what we need to do is get out of that bubble and let the users start interacting with the site because once we have that data, once we have that behavioral data, that behavioral data will help guide us in what and how we need to build the site.

So there’s a slight shift in the mentality from a designer-driven process, meaning the designer dictates how and what we build and how to make it look pretty and all that, to the user tells us. Now, they don’t actually “call us up” and tell us, but they’re telling us through the behavior and the actions that they’re doing.

And so that’s where the only way for us to do that, to get that data, is to get something out there. And that’s why we need to try and launch something that, again, looks better, performs better, but is not perfect. And we can always build, and we will build, once we move into the continuous improvement stage.

Drew McLellan:

This obviously requires a very different sales mentality because most agencies are used to selling a website as a finished thing with maybe an SEO package on the backend or something else. But it’s certainly not a, “We will build it and then we will keep tweaking it forever and ever and ever, and we will never be done.”

So talk us through the sales conversation because I’m sure as you are working with agencies and helping them not only learn the methodology, but figure out how to sell this and stay profitable, you’re coaching them on how to talk about web dev in a different way. So what does that look like?

Luke Summerfield:

Yeah. You’re exactly right. It’s kind of funny. This is very much where inbound marketing was eight years ago. When I was at the agency, we had clients that came to us and they said, “Well, we need SEO.” We said, “Okay. Well, why do you need SEO?” And we’d boil it down. And basically, it came down to, they needed leads for their business.

Drew McLellan:

Right.

Luke Summerfield:

And so we had to educate them and say, “Look, if you want leads, SEO is an important part, but that’s only one piece of a bigger puzzle. You really need a complete system that’s going to help you get to your goals. And that system is called inbound marketing.”

And so there was this whole education that needed to happen in the sales process six, eight years ago with inbound marketing, which now we’re in a little bit spoiled period where a lot of times, they’ll come to you wanting inbound marketing.

Drew McLellan:

Right.

Luke Summerfield:

They already know what it is. They’re already familiar with it. They said, “We need inbound marketing.” And so with Growth-Driven Design, we’re in that kind of period eight years ago where we need to do a lot of that education and get the light bulb to go off in our prospects’ heads because this is a new concept, just like inbound marketing was a number of years ago.

And so the first thing that you need to do is really anchor how important their website is to their business. Ask them a question like, “What would happen to your business if your website disappeared tomorrow?” How impactful would that impact the business?

Really get them to understand how important the website is and how it’s an investment in the growth of their business for the future. And once they understand that, that’s step one, is them putting value on investing in their website.

Then step two is to start talking about how often, now that we’ve established how important your website is, and it’s your number one marketing asset, your number one salesperson working 24 hours a day, seven days a week. How often do you make impactful improvements on your website? And what we find is that most people don’t. Like we talked about earlier, they build it and then they move on to other-

Drew McLellan:

They might update some content or a blog or whatever, but other than that, it pretty much stays the same.

Luke Summerfield:

Impactful improvements, things that are going to drive disproportionate outcome to the goals you’re trying to achieve. And it’s not very often.

And so the analogy, what I recommend with a lot of agencies is to find an analogy that works really well for your industry. So let me give you an example, one comes from Shawn Fitzgerald from ThomasNet. They’re one of our diamond partners at HubSpot. They worked exclusively in the manufacturing space.

And so what he’ll do in the prospecting call is he’ll use an analogy and say, “Hey, what’s the goal of your assembly floor line?” He said, “Well, they want to produce widgets as fast as possible. The more efficient we are, the more profit we make.” He says, “Okay, cool. Have you ever bought a new machine for your assembly floor?”

He says, “Yeah. We’ve bought new machines.” And he said, “Oh, do they work out of the box? Do you put them on there and they work out of the box?” He said, “No. We buy a machine, it produces widgets, but we have to put an engineer on there. And the engineer times it, tweaks it, adjusts it. And over the course of a period of a few months, it finally gets really synced up with our specific process.”

And he said, “That’s the exact same thing we have to do with your website.” We’re going to build a website that works, that produces leads, produces better than what you have today. But just like you have to put an engineer on that to tweak that machine and get it really humming, that’s what we’re going to do with your website. And so that analogy helps them click to something that they’re already familiar with.

Drew McLellan:

Right.

Luke Summerfield:

Another analogy, if you are talking to sales folks, you can talk about hiring a new sales rep. When you hire a new sales rep and you put them on the floor to work calls, do they produce at their peak performance? Do they close at their peak close rate? Do they generate enough qualified leads and move them through efficiently? Of course not. You have to coach them and evolve them over time.

And again, it’s very similar when you first put the website out there. If you think of it as your number one salesperson, you don’t just throw your sales rep on the front line and talk to them later. You have to coach them just like you have to coach your website.

Drew McLellan:

Yeah.

Luke Summerfield:

So that analogy is really important in the sales process for them to understand this new concept.

Drew McLellan:

So I want to get into two things. I want to talk a little bit about how pricing changes, and I also want to talk about how this impacts agencies that sell web dev, but they do it through partners. So I want to dive into both of those, but first, let’s take a quick break and then we’ll come right back.

I get that sometimes you just can’t get on a plane and spend a couple of days in a Live workshop. And so, hopefully, our online courses are a solution to that. Lots of video, hours and hours of video, a very dense, detailed participants guide and all kinds of help along the way to make sure that you get the learning that you need and apply it immediately to your agency.

Right now, we’ve got two courses that are available. We have the Agency New Business Blueprint, and we have the AE Bootcamp. So feel free to check those out at agencymanagementinstitute.com/ondemandcourses. Okay. Let’s get back to the show.

All right, welcome back. I am here chatting with Luke Summerfield, who is working with Growth-Driven Design, which is a startup inside HubSpot all around changing the way we think about the world of web design. So before the break, I said I wanted to cover two things. One, which is, how is this structured from a pricing point of view?

So most agencies, even if they’re going to build a phase or two into the process, their clients want a fixed cost or a ballpark price. So in your methodology, what does that look like in terms of the proposal and the pricing when (a) you don’t really know what the continuous improvement’s going to be and (b) it’s going to be ongoing in theory for all time?

Luke Summerfield:

That’s a really great question because that’s a big shift from the agency’s perspective that you have to make is how you think about the pricing and packaging of your web design services.

Now, the beauty is that, again, like I said earlier, I didn’t invent anything new. I’ve pulled a ton of different ideas and put them together into a coherent playbook for us to execute on. And there’s already been a system built that helps address this, which is Agile.

The backbone of Growth-Driven Design is Scrum process, Agile Scrum process. And the way that Scrum process works is you’ll have a backlog, we call it a wishlist. And we work on a point-based system. So all of those items on your wishlist get reprioritized every single month to figure out what is the most impactful thing that we can do at this given moment to get to the client’s goals.

And then the team associates a point total based off the amount of effort that that will take to execute on. Now, the point totals ultimately get converted into a dollar amount. So we’re able to figure out, using a point-based pricing system, to figure out, okay, if the client has, let’s say, a hundred points a month, we basically prioritize the backlog based off of the most impactful thing. We start at the top, and we go down until we run out of points for that particular month.

And we draw a line, and anything that’s below that line is in the next cycle. Of course, we’re going to reprioritize, add anything in new. Anything above that line is what we’re going to execute on.

So that gives us the flexibility to be able to adjust every single month, what are the most impactful things we build, but yet give them some kind of guidance on how much effort or time or effort that we’re going to be putting in based off of point totals.

Now, to answer your question about pricing, we did a State of Growth-Driven Design survey. We had 350 of our agencies fill out the survey and tell us a lot about the impact on the business, on their agency, and the impact on their clients.

So if you’re looking for numbers, if you’re looking for stats and data, I would recommend getting that. We could probably put it in the show notes, but it’s just Growth-Driven Design.

Drew McLellan:

Absolutely. Yep.

Luke Summerfield:

Yeah. Just growthdrivendesign.com/report, or it’s just on the website. And what we found from those 350 agencies is that they basically break them out into a fast, faster, or fastest package, probably similar to what some of you are doing.

In the fast, there are, on average, 33 hours a month. If you do a $100 hourly rate, just think of a ballpark at about $3,300 a month is that retainer. Now, if you are using point-based pricing, of course, you have to figure out how many points does that purchase. And then you can associate points to that.

Now, the faster is 83 hours a month or, let’s say, $8,300 a month. And the fastest is 146 hours a month or $14,600 a month. So, of course, that’s a wide range. It probably can be refined based off of the clients you work with.

One bit of advice is I wouldn’t go any lower than 15 hours a month or $1,500 a month if your hourly rate is $100. Once to get under 15, just the amount of time that’s with building the backlog, organizing it, running the experiments, doing the reporting, all of that, you’re really not going to have enough time to invest on actually making impactful improvements on the site.

So you’re going to see a puttering out of results, ups and downs, just because of the lack of commitment. So anything above $1,500 is required. I’d probably say $2,500 is a good starting point.

Drew McLellan:

So for your agencies that used to do web dev the old way and have now evolved to this, are the first two phases, so the strategy phase and the launchpad phase, are those actually less expensive than how they used to price because they’re spreading the price out over a longer period of time? Or are they still getting the same kind of revenue off the first two phases? They’re just getting ongoing revenue in addition.

Luke Summerfield:

That’s a good question. So there’s two points. One point I’d like to address, because this comes up often, and it’s a subtle, but very important point. And then I’ll explain the second point, which is more direct to your question.

The first point is that what we used to do, so we ended up getting acquired by Square 2, which is HubSpot’s biggest partner. And while at Square 2, what we did at the time, they have since switched to the model that we were just talking about.

But at the time, we would basically build a full website upfront in the first three months, do all the strategy, all the build-out, all of that, but we would just roll it into the cost of the 12-month retainer. It’s like a payment plan.

Drew McLellan:

Got it.

Luke Summerfield:

It’s like we were doing all the upfront work and then only charging maybe two or three grand a month over the 12 months, but all the upfront work was done.

Drew McLellan:

Got it.

Luke Summerfield:

Now, that’s risky because if your client churns in month four or five and they hadn’t paid out the full 12 months, you just ate that work. Right?

Drew McLellan:

That never happens.

Luke Summerfield:

Yeah. In never-never land, maybe.

Drew McLellan:

No. Right.

Luke Summerfield:

So the subtle difference is that in Growth-Driven Design, you are charging for the work you’re doing. You’re just finding what is the 20% of the work that provides 80% of the value and charging for the work you’re actually doing.

But then knowing that you’re going to add in additional time to continue growing off of that foundation strategy and launchpad to grow off of that as you go, so you minimize that risk of eating that upfront work.

So the second answer that’s a little bit more towards your question; it’s going to depend on the size of the site for the client. So there’s three different routes you can go. The first route is if you’re working with a very small site, so let’s say it’s a law firm or it’s a dentist or something like that.

What I recommend is just setting a flat retainer for a six-month or a 12-month engagement and saying, “Okay. It’s going to be $2,500 a month or $3,500 a month,” whatever your pricing is, “For the next six months. That includes strategy, launchpad, and X amount of months of continuous improvement.”

Let’s say the first month is strategy, second month is launchpad, and then we’re going to do four months of continuous improvement if it’s a six-month engagement, and then talk about renewing. That works well for small sites.

Now, if you have a medium-sized site, and I define medium, if you were to do it as a traditional website, you would charge $20,000 to $100,000. So you’re in the $20,000 or $100,000-range site. In traditional design, that’s what I consider a medium-sized site.

Drew McLellan:

Yep.

Luke Summerfield:

I would actually break off and do the strategy and the launchpad as initial cost, so maybe that’s $10,000 or $15,000. And then have $3,000 a month of continuous improvement after that.

Then the third way to do it. If you’re working with an above $100,000 site if you were doing traditional, a much larger site, I would do each phase separately. So start with strategy, charge that out, have a flat fee for doing the strategy. Then based off the strategy, that will provide a better scope for your launchpad site. Then after the launchpad site, quote.

The problem with breaking it into multiple steps like that is then you almost essentially have mini sales cycles that happen after each stage.

Drew McLellan:

Right. Right. And then you’re at risk that the client looks at the launchpad and goes, “That’s good enough.” And they’re done.

Luke Summerfield:

Exactly.

Drew McLellan:

Yeah.

Luke Summerfield:

And I’ve heard that. So you need to balance that a bit. But every agency finds a good fit based off of the types of clients they work with and the size of clients they work with.

Honestly, if I start an agency tomorrow, I would do strategy and launchpad one set cost, and then do continuous improvement as a separate set cost. And just get some level of commitment and make sure you’re doing the education upfront for them to buy into the continuous improvement so that they don’t flake out.

If you keep seeing clients flake out at that, there’s probably some education challenges in the initial sales process.

Drew McLellan:

Yeah. So in your experience, and I know you guys haven’t been doing this for a super long time, but in your experience, as you’ve watched the agencies that are implementing this, is there a minimum number of months that you have to do the continuous improvement phase for the client to see and feel the value as well as for the agency to see and feel the value? Is there sort of a, “Look, if you’re not going to do this for six months, we shouldn’t do it at all?” Is there a timeframe around that?

Luke Summerfield:

What we found when we did the State of GDD survey, the average launch, doing the strategy and the launchpad website, those two together, on average, with traditional design, was 108 days. Then, basically, you set it and you forget it. Right? With Growth-Driven Design, we found the average was 60 days.

Drew McLellan:

Wow.

Luke Summerfield:

And then from there, you optimize. Right? So you’re almost cutting it in half. Also, from an agency’s perspective, that’s a quicker time to value. If it’s going to take 108 days-

Drew McLellan:

Absolutely.

Luke Summerfield:

To launch something and they’re not seeing any end product or end result or end leads for 108 days versus 60, that’s not only bad for them, but it’s also bad for you as an agency not to show actual value. Mockups are nice, but they’re not leads.

Drew McLellan:

And I think clients get all whooped up about the website and the design and the wireframes. And then it feels like, to them, it takes forever for something to be Live that they can go look at or click on. And by then, I think the honeymoon is over and they’re already frustrated.

Luke Summerfield:

Yeah, exactly. So imagine them going around and turning around to their boss 60 days later. And I’ve seen them as low as 30 days, like law firms and small sites you can get done in 30 days. But the average across all the different size sites was 60 days. So that’s the first two months.

And then from there, of course, usually, what happens directly after the launchpad goes Live was there is a number of sections or a number of things you wanted to build in the launchpad that were nice to have, but not absolutely need to have for the launch.

Drew McLellan:

Yeah.

Luke Summerfield:

So there’s usually about a month or one iteration cycle is just building net new features or net new sections or things that just didn’t make the cut for the initial site. And again, you can use data to inform that as you build those out because now you have this Live site out there.

And so that’s usually about a month. Then you can get into continuous improvement. Now, when you first start doing continuous improvement, there’s going to be some low-hanging fruits.

So usually, your first few months you get some really good wins. And then you go through this period where the low-hanging fruit starts to not, I guess, dry up for a lack of a better word. And you really got to put some good thought and strategy and some experimentation and testing into getting those big improvements.

So all of that being said, to answer your question, I recommend not doing anything less than six months. Usually, six months is enough. Some were doing three months, but you have to set a very different expectation. And it’s an expectation less around the continuous improvement and more about launching quickly and getting something done quicker that’s more bite-sized. I’d recommend sticking six months or longer.

Now, I’ll tell you, what I find with most agencies, once they get the client in the door on a Growth-Driven Design retainer for six months, they get to see the process, they understand how the continuous improvement cycles work. They get involved in generating ideas for the website. They’re building the wishlist. They get really excited.

And so what we’ve seen is that it’s actually fairly easy to not only renew them, but also upsell them into bigger packages. Because think about it this way, you have this list, this wishlist is going to be your number one friend for renewing and upselling. They have this list of all these amazing ideas. They’re looking at the thing, the gears are turning in their head. They’re like, “I want to do it all.”

And you’re like, “Well, we can do it all, but we’re going to have to space it out over time because your engagement is just limiting in the size of it.” So you draw the line on what you can do each month and they say, “Well, no, let’s move faster. We have really good ideas.”

And so it’s easy to say, “Well, we can move faster.