The Agency Profit Podcast
PM/AM Time in Pricing, With Carson Pierce
Episode Summary
About this Episode In this episode of the Agency Profit Podcast, Marcel Petitpas is joined by Carson Pierce to unpack one of the most persistent and misunderstood profit leaks in agencies: how account and project management time is priced (or not priced) into client work. Drawing on years of operational experience, they challenge the outdated belief that clients won’t pay for PM and AM effort and argue that the real issue is usually agency-side insecurity and weak pricing models. The conversation explores why PM and AM work is inherently difficult to track, how excluding it distorts metrics like average billable rate and utilization, and why many agencies unknowingly erode margins by treating these roles as overhead. Marcel and Carson break down two viable approaches to pricing PM and AM time—directly through scope or indirectly through margin targets—and explain when each makes sense based on the nature of the work. The episode closes with practical guidance on role design, delivery overhead vs. true overhead, and how agencies can structure pricing to protect profitability without creating unnecessary client friction.
Episode Notes
Points of Interest
- 00:01 – 01:04 – Framing the PM/AM Pricing Question: Marcel welcomes listeners, introduces Carson Pierce, and frames the central question agencies face around whether and how to charge for account and project management time.
- 01:04 – 02:14 – Why This Issue Persists: Carson explains why underpricing project and account management work continues to surface across agencies despite increased industry maturity.
- 02:14 – 03:28 – The Myth That Clients Won’t Pay: Carson challenges the belief that clients resist paying for PM and AM work and reframes these roles as valuable parts of delivery.
- 03:30 – 04:32 – Why PM and AM Time Is Hard to Track: Carson outlines how fragmented tasks, short work intervals, and multi-client meetings make accurate time tracking impractical.
- 04:33 – 06:20 – Pricing Model Confusion as the Root Cause: Marcel connects PM/AM underpricing to weak separation between price, scope, and cost, especially in time-based billing models.
- 06:21 – 07:25 – The ABR Distortion Effect: Carson explains how excluding PM time inflates average billable rate and hides true delivery economics.
- 07:25 – 08:24 – Two Ways to Price PM and AM Work: Marcel introduces the two viable approaches—pricing PM/AM directly in scope or absorbing the cost through margin targets.
- 08:24 – 09:50 – When Client Pushback Actually Appears: Carson explains why most clients accept reasonable PM allocations and why resistance typically signals excessive or poorly designed PM effort.
- 09:51 – 14:02 – Why Time-Tracking Fixes Often Fail: Carson reviews common PM tracking approaches and explains why they frequently add overhead without producing actionable insight.
- 14:03 – 19:59 – Building PM Costs Into Margin Targets: Marcel explains how agencies can model PM and AM costs directly or indirectly based on tracking feasibility and role structure.
- 20:00 – 29:00 – Structuring Account and Project Management Roles: Marcel and Carson discuss when to separate AM and PM roles, referencing Brett Harned’s perspective and tying structure to work complexity.
- 29:01 – 36:13 – Sales Allocation, Overhead Clarity, and Wrap-Up: The episode concludes with guidance on allocating AM time to sales only when explicit, avoiding circumstantial overhead, and reinforcing intentional PM pricing.
Show Notes
Love the Podcast
Leave us a review here.