Leveraging the Predictable Performance Methodology with Pete Caputa of Databox

Pete Caputa is the CEO of Databox and the person who built HubSpot’s partner program. Gray MacKenzie hosted this live recording in January 2019, Pete’s third time on the show by Gray’s count. They cover the first things Pete changed at Databox, why the standard inbound retainer stopped working, and the methodology Databox published for turning an annual plan into weekly adjustments.

Make more of the product free, then deliver value fast

Gray called Databox’s free plan a no-brainer compared to free offers that never show a path to paying. Pete said companies make two freemium mistakes: they don’t make enough of the product free, and they don’t deliver value quickly enough.

The first thing I did at Databox was fix number one. They had a similar model where the free version included one data source and one databoard, so one dashboard for one tool like Google Analytics or Facebook Ads or something. And the value of the tool is actually bringing data in from multiple tools. That’s the initial value, at least. And so we switched it to three data sources.

(Listen at 05:56)

In-app chat drove Databox’s best two months

Gray asked for Pete’s biggest takeaway from 2018. It was in-app chat: talking to users as soon as they sign up and each time they log back in. For six months almost the whole executive team worked the chat themselves, with one full-time hire in place and two more coming. Pete wasn’t sure the same result would hold for an agency, but the numbers were hard to argue with.

We had our best two months ever in November, December. We grew on average between the two months like 9,000 MRR.

(Listen at 12:06)

The inbound retainer playbook is tired

Asked what’s changing for agencies in 2019, Pete said nearly every small agency now sells a retainer built on the core inbound methodology: content, lead capture, email automation, reporting. Too many sell the same services the same way, and 500-word blog posts eight times a month don’t work anymore.

That playbook is tired, and so I’m pushing agencies to go in one of two directions. They either need a niche or they need to expand their service offerings. Ideally they do both.

(Listen at 21:26)

Gray agreed on niching and pushed back on the second half, worried agencies would chase shiny tools instead of client problems. Pete’s reply: it’s still about outcomes, and a small tool-based service gets you in the door. Picture a prospect comparing three agencies that all pitch the same $5,000-a-month retainer.

They’re gonna be like, yeah, you sound exactly like the other three agencies. Instead of saying, okay, well, it seems like a really urgent issue right here, and here’s one thing that I know that I can help you with. I can do it quickly, for a small amount of money. If that’s something you want to solve now, we can do that right away.

(Listen at 26:28)

Agencies sell ROI, then stop looking at the plan

Gray asked why agencies that pump out deliverables never go back to the data. HubSpot’s partner program, Pete said, taught agencies to sell consultatively on ROI, which took a lot of them from the dining room table to $5M firms. Those same agencies had a blind spot.

They haven’t put an equal amount of effort into the actual delivery of that ROI. What they’re good at is selling the idea of the ROI, and they’re good at doing work that does cause improvement most of the time. But what they fail to do is really hold themselves accountable to optimizing and maximizing the ROI.

(Listen at 33:08)

Most set the plan at the start of the engagement and don’t look at it again for six months, sometimes 12; the good ones do it quarterly. Marketing is real-time now, so a plan adjusted quarterly and goals set annually fall out of sight and out of mind. It turns marketers into “automatons,” Pete said.

Initiatives quarterly, goals monthly, adapt the plan weekly

The agencies Pete studied (owners checking numbers on their phones first thing, metrics on a TV everyone can see) still set annual goals and a 12-month scope. The difference is what happens next: a new initiative each quarter, lead capture one quarter and paid traffic the next, and goals set monthly.

We don’t hit most of our goals… we probably hit like 50% of our goals at Databox. But the simple act of having a goal that we’re focused on allows us to get a lot closer to it. It’s really hard to set goals, and that’s why most people don’t do it. It’s really hard to have the conversation with a boss or a client when you don’t hit the goal.

(Listen at 36:54)

Keep it to a few goals, not 20, some stretch and some easy. Step three is adapting the plan weekly: ship something, then decide whether to promote it more, put ad dollars behind it, or link it from the footer. Gray said weekly review sounds like more work to most agencies. Pete drew a line on overhead.

What I don’t do is force a team to adapt their plan every week. What I want is individuals to adapt their plan every week… I just want them to communicate what they plan to do and then be willing to adapt that and explain why. Usually what happens is it’s a tweak to what they were planning to do. It’s not like a wholesale change.

(Listen at 41:10)

Two things make that workable: a process for diverting from the plan, and a project management system everyone can see, so adapting happens in a thread instead of a meeting. Pete credited Metrics That Matter, OKRs and Traction; Databox’s methodology picks up after leadership sets the targets.