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One of the stumbling blocks of small to medium sized businesses, is their ability to manage their ad spend in the most efficient and effective way. They often don't have a large team or the budgets to do so and are looking to save time and money.
Pricing Engine is a new start up that recently launched into Beta as a tool to help marketers not only do digital advertising themselves, but to be more effective at it. It was created to help marketers know where they are, how they're doing compared to their peers, and what they should do to improve it.
I had a chance to talk to Jeremy Kagan, CEO of Pricing Engine, about his new product and how he envisions how it is going to change the way SMBs, consultants and B2B enterprise clients do business.
Who is Pricing Engine for?
Though it is for a large range of marketers and businesses, I like to explain it with the example of Joe, who runs a small pizza business.
Joe's a smart guy, he's a pizza guy and he does a few google ad words to get some business in. Even though he is sure some orders have come through from the ads, he doesn't know if he's doing well. Let's say his budget is $500/month. To do A/B testing, he doesn't have enough people, money or the time to do it. Because of this Domino's Pizza is always going to kick his butt.
But if Joe could pool together with 9900 other pizza guys around the country, and their data gets anonymously pooled, they can get benchmarked against each other. Down the road, they'll not only know what is a good and bad clickthrough rate, but that a certain key word like "Anchovies" shouldn't be used while "pepperoni" should.
How does Pricing Engine work?
The pricing part of Pricing Engine is based on us determining the value you get from a particular action. The way it works is:
1) We benchmark you
2) We give you a proprietary report card based on our own system so we tell you in key areas how you are doing compared to your peers. If you get an A, go back and do something else with your business. We're sure you have a long list of things you can do but if you get an F we tell you what to improve.
For professional marketers, this is going to be known advice but for the guy who's running a restaurant and doing payroll every day, to be told to improve your click through rate by using some negative key words, for example, that's going to be very valuable. Out of the whole haystack of things people are telling him to do, it isolates the top couple of things he should do.
3) The pricing part is that we put a price tag on all the actions we recommend and that way you can prioritize across your whole business if you want to do it or not. If you have an F and turns it into an A, what is that worth? If it's worth $60 and you have a fire in the kitchen, you probably need to run in to the kitchen and take care of that first.
What are the key areas that you can help marketers?
We have a lot of unique channels whereas most guys we've talked to only know four channels: Yelp, Groupon, Facebook and Google. And Google is where they do their advertising pretty much.
We want to give them one dashboard where they see every where they advertise. They can already see Bing, Yahoo and Google through our interface and we're not only adding Facebook advertising in a short bit, we have some proprietary channels, for example real time bidding and email and other channels like display ads that you just can't get as a small business person.
We're opening up this other world and we're telling them: Say you're able to go into a real-time bidding auction, what's it's worth to you? Based on your performance on Google, we can tell you exactly what to bid, and we'll translate your targeting perimeters, the whole nine yards.
The idea here is to simplify and strip out the complexity while providing access to this stuff. The thing is, with a $500 budget you don't want a 0.2% improvement. It's not worth your time.
Once we get you into a decent range with your report card - the As and Bs, so you're a good student, the suggestions we make are no longer "you should try to fix this," but we're like maybe you have an opportunity on Bing if you're only advertising on Google and this is what it's worth.
What's the approach behind Pricing Engine?
We're approaching it from small business needs. They don't need 6 sigmas of accuracy, they want some easy to understand graphs, and we're working hard to provide it but we're not 100% there. This is our open beta, we've tested this with 300 users already and we have several enterprise clients.
What we're finding is, the enterprise clients are the people who deal with small businesses and they have the same problems. With most of the small agencies for example, if you have two guys maybe you can handle 10 clients each.
A lot of our agency guys have told us, with our tool their guys don't have to dig into each account, figure out what's wrong and then decide how they're going to do something to solve that. They can pull out the top three things they can do from Pricing Engine, and while monitoring that, they can bring on 5 more clients.
This could, let's say, increase revenue by 50% without increasing staffing. So they say this tool is great as it makes them look smart. We also have some people with little digital expertise now using this to offer digital marketing as a boxed up product to their clients.
And the question most people will wonder: how much will this cost?
For the typical customer who walks in, they can sign up for free and they get one profile, and one account and they can do the whole thing for free.
We also make a lot of buying suggestions, so to buy through us they have to have a premium account and the lowest is 29.99 a month. If you just need multiple people to log in, that's $75. Lastly, if you have up to 10 accounts, which is typical for a consultant, you'd need a professional account. There you can run 10 accounts on one interface and that's more expensive at 149.99 but is half price compared to the price at getting individual accounts.
Those are our 3 tiers. For Enterprise clients, which is usually anything more than 10 accounts, we like to work with them directly. They pay a low monthly fee per account, and if they want Pricing Engine to do the management, they pay a small percentage. Most of them charge on top of our price so Pricing Engine can be a revenue generating product for them.
What's next for Pricing Engine?
The more data we get the smarter we get. Right now we are still at the beginning so we don't have enough data to quite do all the deep analysis we want to yet but our predictive analytics tool will grow across all channels so it doesn't matter where the ad is for us to benchmark against. Ultimately if you say, here's my business, here's my budget, here's my region, we can tell you based on people like you exactly how you should break up your budget, and we give you suggestions on how you should create your ads, and tell you what kind of yield you should expect.
If you're interested in finding out more, you can sign up at pricingengine.com/econs and get your own report card for your business today.