As a UK-based digital marketing agency offering comprehensive services, what should be the appropriate pricing structure for securing monthly retainer clients? Despite generating leads, I am struggling to determine the right price point for my services given the disparity between high-end agency pricing and lower-end outsourced pricing. Specifically, if a client requires social media management across three channels, including content creation, design, lead management campaigns, SEO work, and two dedicated resources, what would be an appropriate monthly fee for this work?
I have created my share of pricing for outsourced activity. Knowing what my competition is charging both on the high end and low end helped me understand the landscape but I created my pricing based on my own value proposition for each specific partner. First I needed to understand where they were and where they wanted to go. Then what has typically stood in their path to achieving their goal. Knowing these things was a good start in creating a plan for them.
Next communicate to them what it would take for them to do it themselves in terms of manpower, management, infrastructure, investment and total cost without the guarantee of success. Are they experts in the problem you are solving? Position yourself as the expert solution provider.
Then communicate to them how your team would manage this process and produce results for them. Not only reducing the complexity and reducing the cost but the additional value of partnering with your team.
If you lead with your product and solutions then the number one objection will be price. If you take a consultative approach and tailor a plan based on results and value the objections will be around the inputs and desired outputs. These will be objective discussions and basis for negotiation.
Of course my explanation is a simplified approach but hopefully gives you food for thought and creativity.
In my agency at Vevol Media, we have extensively tested various pricing strategies to determine what works best for our agency, and we have found that gradually increasing prices over time has been effective for us. Additionally, pricing strategies such as anchoring are crucial when selling and retaining retainer clients.
In your case, when it comes to determining an appropriate monthly fee for a client requiring social media management across three channels, including content creation, design, lead management campaigns, SEO work, and two dedicated resources, there are several factors to consider. These include the scope of work, the level of expertise required, the amount of time and resources needed, and the client's budget. YOU HAVE TO STAY PROFITABLE!
It is important to note that pricing can vary widely between high-end agencies and lower-end outsourced providers. While lower pricing may seem attractive to some clients, it is important to consider the value and expertise that your agency brings to the table. Offering a comprehensive suite of services, along with dedicated resources and a high level of expertise, justifies a higher price point.
In terms of pricing, I recommend using an anchored pricing strategy, where you present a higher-priced package as a reference point before offering lower-priced options. This can help to establish your agency's value and expertise while also providing clients with options that fit their budget. Let them choose the price/plan (you want them to choose - if you get me)!
I have developed and restructured pricing models across multiple organizations over the years and one thing has always been true, when it comes to pricing one size does not fit all. There are many models that can be deployed based on a variety of factors including; the scope of the services being provided, duration, resource requirements, business impact etc.. At a minimum, I suggest you start with capturing the scope of services, and clarifying the duration of the project (i.e. is this a 1-month commitment or a 12+ month commitment etc..) also if I understood the question this will require (2) resources? Will need the daily, weekly, and monthly costs (loaded) for those resources? Will they be fully dedicated to this client/project? If yes, is this for the duration/all phases or only certain aspects/phases of the project? Once you have this information you can assess the investment your firm will be making in delivering the work and from there be in a better position to value that in terms of retainers and fee structures.
If you would like help please feel free to schedule a call and I will help you flesh this out and create a pricing model that you can apply for not only this client but your future clients as well.
Pricing your digital marketing agency services can be a complex process that depends on several factors. Here are some steps and considerations to help you determine the pricing for your digital marketing agency services:
Define your services: Start by clearly defining the specific services you offer. Digital marketing encompasses various aspects such as social media management, search engine optimization (SEO), content creation, paid advertising, email marketing, web design, etc. Identify which services you specialize in and tailor your pricing accordingly.
Determine your costs: Calculate your overhead costs, including employee salaries, software and tools, advertising expenses, office rent, utilities, and any other costs associated with running your agency. Understanding your costs is crucial to ensure you cover your expenses and generate a profit.
Research the market: Conduct market research to gain insights into the pricing structures of other digital marketing agencies in your area or niche. This will help you understand the competitive landscape and give you a benchmark for your pricing strategy.
Consider your expertise and experience: Your agency's expertise, experience, and track record can justify higher pricing. If you have a proven track record of delivering successful campaigns or have specialized knowledge in a particular industry, you may be able to command higher rates.
Determine pricing models: Decide on the pricing models that align with your services and client preferences. Common pricing models in digital marketing include hourly rates, fixed project rates, monthly retainers, performance-based pricing, or a combination of these models.
Value-based pricing: Consider the value you provide to your clients. Focus on the outcomes and results you can deliver rather than solely basing your pricing on time or effort. If you can demonstrate that your services can generate significant returns on investment for your clients, you can justify higher prices.
Consider client budgets: Understand the budgets of your target clients. Small businesses and startups may have limited budgets, while larger corporations or established brands might have more substantial budgets. Align your pricing with what your target clients can afford, while still maintaining profitability for your agency.
Pricing tiers/packages: Consider offering different pricing tiers or packages that cater to different client needs and budgets. This allows clients to choose the level of service that best suits their requirements, and it can also help you maximize your revenue potential.
Test and refine: Initially, you may need to test different pricing strategies and gauge client responses. Monitor the market, collect feedback, and make adjustments as necessary to ensure your pricing remains competitive and profitable.
Remember that pricing is a dynamic aspect of running a business, and it may need to be adjusted periodically based on market conditions, client demand, and the value you deliver. Regularly evaluate your pricing strategy to ensure it aligns with your business goals and positions your agency competitively in the market.