Although I am listed as an expert in digital marketing and advertising, pricing is an area that troubles me. I thought of asking a question to the experts.
I have been running an online marketing and advertising company for almost 2 years now. Having made mistakes and learning from them, we are now able to deliver services I am proud of.
I have had troubles scaling up and pricing our services properly.
I can't talk to a regular business consultant because pricing for digital marketing companies can be tricky.
Thanks a lot!
You're not the only one that struggles with this. Pricing can be tricky for any industry really, but in digital marketing especially so because many still don't understand the value in it. When you can sell the value, then you can sell the price.
When it comes to setting a price for anything you can look at it one of two ways, you are either selling value or you are selling your time. When you sell value you have to be at a price that the buyer agrees on the cost of the value being received. If you're selling your time, then you need to determine how much you need for that time and hope the buyer agrees that's what it's worth.
With that, you can provide a quote or you can estimate a total cost based on the number of hours you think the job will take.
The downside to a quote is that there is often scope creep, that is the client requesting things that you never really intended to be part of the project, or them expecting a certain result and suggesting you have to do whatever it takes to get that result. This is especially important in web marketing because because there is always something more to do to.
Many people shy away from hourly work because they don't want to be "nickel and dimed" on every little thing and for the project to end up costing much more than they anticipated.
I have found a mixture of the two to work. Provide an estimate based on a certain number of hours per month. Outline what that estimate includes but be flexible if you need to do things that were never included in that estimate. Just make sure the client knows that you stop at whatever hours you agree too each month.
Any solution will have issues. You just need to find the one that works best for you and your clients.
The first step is to understand the market price range for each one of your services. As you correctly stated its difficult to get this info from competitors but you can get it from their existing customers. My reccomendation is to target customers whom have services with a competitor and instead of calling to sell your services the purpose of the call should be to ensure your service offering and price is competitive. You will find your target customer is more open to listening to you and you also get some good Intel on your competitors prices and service offering.
The other analysis you must do is determine what your value proposition is. What differentiates you from competitor. You must be real honest with yourself in this analysis because the answer might be there is not much that is different from you to the next company. If this is the case then a low cost provider must be a strategy you consider. If you do have valuable, noticeable differences from the competition you have to do everything possible to make that be known to your target market. Tell them why are you different and right for them.
Hope this helps. I will be glad to have a quick call with you to discuss a common sense approach.
Hello... I totally understand where you are coming from.. I started a digital marketing company several years ago and let me tell you it has been quite a ride :)...
Anyway answering your question is not easy, I would start by defining and refining who you want your clients to be, small businesses, professionals, large corporations, etc...
Now there are many pricing strategies out there and all are good to take into consideration like pricing in the range of your competitors, or in the low range or in the high range.
My personal opinion is to first determine how much you need to price your services so you are NOT losing money, every business is different, you can compare 2 digital marketing agencies and even if they are both starting what they pay to employees could be different, the tools they are using could be different, you get my point right.. so please be sure you don't lose any money.
Once you have that price, go from there to wherever you want, it is all about how your prospect perceives the value, if you are helping him acquire 2000 dlls customers, then you can charge 500, 600, 700, etc... If you are helping him create facebook ads (which could be the same thing you were doing in the previous example, but your value proposition was different) maybe you won't be able to price your service as high.
There are many other considerations, but with the information you gave so far I wouldn't worry about my competition. I will define the perfect client, create your value proposition and price accordingly.
Hope this helps.. .If you need further assistance let me know.
Don't forget to upvote my comment and share :)