November 7, 2017
Pricing digital marketing services is always a delicate subject. It’s important to stay competitive but you still need to be profitable. Keep your company competitive and profitable with these tips to help you find the best digital marketing pricing model.
In this post, we’ll cover the ten best practices for pricing digital marketing services, from the presentation of costs to conversion optimization. You’ll likely need to do some testing before you decide which combination of pricing models are best for your company, but don’t get discouraged! No one model works for all, so expect some trial and error before you find the right pricing strategy for your business.
1. Public pricing
One strategy is to provide your prices to potential clients upon request only; however, we believe public pricing is a better option. This allows clients to easily compare different digital marketing agencies, saving them time. Not only does public pricing improve the user experience, but it also lets your target audience know that you’re transparent with your costs and there are no hidden fees.
If you’re confident with the value you offer, then public pricing shouldn’t be a problem. Private pricing is often only successful if you have a reputation that precedes your work, or you don’t have much competition in your niche.
That said, there aren’t many digital marketing agencies that are without competition. Considering there are hordes of other agencies waiting to steal your potential clients, you’ll have more success if you are upfront about your pricing model.
We’ve found that there are three main reasons digital agencies with public pricing are at an advantage:
No invasion of privacy
Having your prices posted publicly allows potential clients to review your costs without having to provide an email address or phone number. People can be wary about giving their personal information because they don’t want to be harassed by unwanted calls and messages.
Option to compare agencies
Sales leads will (almost) always strive for the best deal. If your competitor’s price is just a click away, but people can’t find your information, they may not include you in their options.
No time wasted
If you have to request a price through a contact form, you’ll typically wait 24-48 hours for a response. Would your business want to take a chance at losing those conversions during that period? Agencies that display their prices are demonstrating that they value customers’ time.
Pro: You will be viewed as a transparent and honest company if you’re upfront about your pricing.
Con: Potential clients might exclude your services from their ultimate choice if they see your price as too high without understanding the value offered. With public pricing, the numbers speak for you.
2. Packaged pricing plans
Digital marketing pricing packages can help simplify the selection process for clients. You can combine this with add-ons or custom packages that can be quoted on request.
As a digital agency, you should provide packaged pricing plans if you have the experience to deliver the project. Packaged plans are also useful for startups or people who are somewhat clueless when it comes to digital services.
Let’s look at a sample pricing package from SpiderHousePr.
They offer a variety of services and divides them into packages with clear pricing for each.
You’ll notice SpiderHousePR also provides a contact form so potential clients can easily get in touch and discuss their digital goals.
Pro: Packaged plans can make the process easier for clients who are new to digital marketing.
Con: If you don’t have the experience or expertise to deliver a project, you will have trouble marketing a packaged plan. You may also lose out on more seasoned clients because your services are targeted to inexperienced ones.
3. Highlight the ‘best’ pricing plan
Clients new to digital marketing can struggle to choose the right pricing plan. You can help them by highlighting the package that you believe provides the best value, usually a mid-range package.
Highlight the package by using a different colour or a phrase like “most popular.”
Pro: You’re helping your clients to choose a popular option (and the one you want them to pick!) so that they don’t feel overwhelmed by choices.
Con: You may miss out on a customer choosing a more expensive or comprehensive plan because they were drawn to the highlighted plan.
4. Table vs plain text
For the display of your packages, user experience is again paramount. You should try to fit all your digital marketing pricing packages on the same page for simple comparison (a comparison table is perfect for this), or iconify the packages with brief explanations. Check out the table from WooRank, an SEO audit tool, below:
Not only is this table visually appealing, but it also allows potential clients to review and compare how each pricing plan differs. This makes it easier for a user to choose the plan that’s right for them without having to navigate multiple pages on your site.
Pro: Pricing tables give your customers a chance to review their options in a comprehensive and visually competent way.
Con: Clients might get overwhelmed with information and need help deciding what option is best for them.
5. Custom quote calculator
If you do want to use private pricing for your digital marketing services, a custom quote calculator can be a great option as it provides the client with a quick quote, without them having to provide their contact information.
Webpagefx offers a quote calculator, which shows exactly how much something will cost based on project needs. This shows that Webpagefx values a client’s time and understands that some users are unwilling or reluctant to share contact information.
Pros: A customized pricing plan allows your clients to pay only for what they need, making your services very cost-efficient and valuable.
Cons: Your potential clients may choose another digital marketing agency because they can’t immediately see a cost for your services.
6. Recurring revenue model
SEO and digital marketing projects tend to be long-term, so a recurring model is needed. The client is offered a discounted annual price on a flexible program, which also benefits the agency by developing an enduring client relationship.
Retainers are most valuable for larger projects that can be split into smaller segments over time. With a retainer rate, a client pays a discounted yearly price rather than a more expensive monthly rate.
Pros: You can attract clients who know they need your digital marketing services for an extended period. You’ll also develop a long-term relationship with your clients.
Cons: You may lose some revenue by giving a discount on a yearly rate.
7. Value, Time, and Cost
Always consider these factors when determining how to price your digital marketing services: value, time, and cost.
Value provided can be the hardest one to qualify without promising a result to the client, such as a traffic increase, which can be difficult to deliver definitively. Analyze the value you promise carefully. Conversions or traffic increases can only be determined by looking at your individual client’s resources and capabilities.
If deducing value is too difficult, then time and costs incurred (i.e. hours spent working and salaries) can be used as a pricing model instead.
Pros: Your clients know exactly the value they will get from investing in your company. You can tailor your services to your individual clients by analyzing their needs.
Cons: It’s hard to keep value promises to your customer when dealing with specific goals, such as conversions and traffic increase. In contrast, if you price your services based only on time and costs incurred, you may be undervaluing your company.
8. Multiple pricing models
Some clients may only want to try your services, whereas others are looking to create a lasting relationship. Combining hourly rates and recurring revenue models can accommodate everyone.
- Hourly SEO Consulting = $250/Hour
- Standalone SEO Projects = $2,000+
- Monthly SEO Retainers = $1,500 - $5,000
- Two Day SEO Boot Camp = $3,000
Pros: You’re providing clients with more options so that they don’t feel as though they’re wasting time or money. Clients who only need your services for a brief period will appreciate that you offer consulting services on an hourly basis.
Cons: You may find that you’re losing out on long-term clients with hourly services.
9. Competitor research
Regardless of which pricing model you choose, competitor research is essential. It allows you to see the pricing margins in your niche and shows you where you fall in the market.
By looking at your competitor’s pricing models, you can see if you’re overvaluing your product, or not pricing yourself competitively. If a competitor company has private pricing, you can ask for a quote using an unbranded email or phone number.
Pros: Potential customers will consider your services against your competitors.
Cons: You won’t know if you can necessarily offer the same services or value that your competitors can. Alternatively, you may be undervaluing your services just because your competitors are offering a specific rate.
10. Charge for technical support
It’s a critical question: should you charge for technical support? If you’re spending a large amount of time on maintenance for past projects without passing those costs on to the client, it’s time to start charging.
To do this successfully, you should define your policy well in advance, and you need to communicate it clearly to your clients. You need to establish what your post-project technical support involves, and when it takes effect. You can choose to set it up like an insurance policy or as one-off fixes. You can also include tweaks to your project in the original pricing model, such as offering two fixes before you start charging for maintenance.
If you’re a software development firm, you can charge for monthly maintenance at a discounted price.
Pros: Charging for technical support can be a new revenue stream. After all, it is a service. By being upfront about your post-project charges, you show your client that you are transparent about your pricing. It also demonstrates that your team will still be available and valuable to them even after the project has been completed.
Cons: By offering post-project maintenance, your clients might assume that your services are faulty and need major updates and changes long-term.
Pricing digital marketing projects might seem complex, but considering these approaches will benefit your agency in the long term with better quality lead generation, higher conversion rates, and improved profitability.
