What Your Agency Is Doing Wrong, According to Pete Caputa

Pete Caputa joined HubSpot as its 15th employee in November 2007 and built the agency partner program from a one-man side project into one of the company’s biggest channels. Andrew Dymski hosted this episode, number 67 of Inbound Agency Journey. The first part is the partner program’s origin story. The rest is Pete’s list of the mistakes agencies make, which runs to five even though the title says four.

The partner program was rejected twice

Pete’s own startup had taught him how hard it is to balance sales and service. At HubSpot he carried a quota for the first time, beat it most months, and realized he’d have to work twice as hard to do twice as much. Working through marketing agencies was his way to scale. Colleagues called it Pete’s pyramid scheme, and not all of them were joking.

My petition to start the program internally, I got a lot of pushback. I pitched actually twice and got completely rejected. And they basically said, keep doing your job.

(Listen at 10:00)

HubSpot had just raised its Series B and planned to grow by adding direct reps, so Pete was a distraction until, about nine months in, he was doing two and a half times the numbers of the average rep. On the third pitch he thought he’d lost again, until Brian Halligan stopped him at the door: you can do it, you still have to hit your number, and you report to Mike Volpe, whose condition was that the channel beat the direct team on productivity and economics.

Mistake 1: trying to be all things to all people

Andrew asked what separates successful agencies from average ones. Pete started with defining who you help and how.

Most agencies try to be all things to anyone. The normal phrase is all things to all people. But what happens is the agency person is in front of a prospect and the prospect says, I’d like this, and, oh, we can do that… That’s the curse. That’s how agencies stay small. That’s how they stay unprofitable… So the best agencies do pick a niche and go after it.

(Listen at 19:23)

Most owners won’t tell Pete their margins because they’re embarrassed the number is under 5 percent. The niche agencies he knows run low double digits, and every niche-focused agency he talks to is more profitable than average. For owners afraid to walk away from a market, he pointed to an agency that keeps its homepage general but runs campaigns around a few verticals: niche without going all in.

Mistakes 2 and 3: not marketing yourself, and expecting inbound to close deals

Agencies that market themselves never have a client acquisition problem. Pete’s first example was IMPACT in Connecticut, where Bob started blogging like crazy the day he became a partner in 2011 and had leads and clients within six months, which Pete called rare.

He can screw up on hiring a little bit. He could screw up on client success a little bit. But as long as he doesn’t screw up completely, he has a funnel that he can pull back on.

(Listen at 22:58)

The other model was Paul Roetzer at PR 20/20: low volume, very thorough, two books, and a caliber of client small agencies rarely land. The third mistake belongs to agencies that practice inbound and wait. Pete doesn’t know where that idea came from, or whether HubSpot created it.

Marketing by itself does not produce clients. It produces leads. And there’s a small fraction of those leads that will become clients. But to figure out which ones those are, you need to reach out and connect with them in a meaningful way.

(Listen at 24:05)

Mistakes 4 and 5: no buy-in at kickoff, and a cookie-cutter playbook

Pete’s fourth: agencies fail to get buy-in at the beginning, where an engagement is made or broken. Three fixes work. Strategy before any blog post or landing page. HubSpot’s free CRM and cheap sales tools to deliver value fast. And a kickoff workshop with every client stakeholder in the room, sales, marketing and the C-suite, an approach he credits to Marcus Sheridan. Participants get challenged on what they’ll contribute and leave bought in. Then Pete admitted he had one more.

My typical rant is that I think agencies need to be more creative. And I’m probably to blame for this. Back in the day when trying to figure out how to teach agencies to sell these retainers, I came up with this idea of saying you need to do X blog posts, a landing page with an offer, an email, and then sit down with them once a month and analyze it and figure out what to do next. And we made it so cookie-cutter that too many agencies took that very literally.

(Listen at 27:13)

Some partners pasted HubSpot’s training straight onto their pricing pages as fast, faster, fastest packages. His counter-example: a paving client whose employees were all dog people, so the agency partnered with a humane society and drew in homeowners instead of writing another how-to-pave-your-driveway ebook.

Do them in order

Andrew pointed out that picking a focus makes the prospecting easier. Pete agreed, and said the whole list compounds.

If you pick your niche and you prospect consistently, you don’t take on clients that won’t gel well with that. When you get to the point where you’re onboarding them, they’re going to be bought in. And when you get to the point where you’re going to bring some creative ideas, they’ll be interested in participating.

(Listen at 30:43)

Clients who fit stay longer, the hidden sales and marketing cost spreads over more years, and the account gets more profitable. Skip one step and the rest works less well.