How you price and package your services will ultimately determine how successful your agency is, so you need to get it right. Download the full Nail Your Pricing Strategy ebook here to get an in-depth look at value-based pricing and the tools that you can use to implement this pricing strategy: http://hubs.ly/y0Ff0z0
3. They often also wrestle with pricing…which is at
the root of the problem.
4. …But each day that you avoid nailing your pricing strategy
is another day you keep your agency from growing at a
desired pace.
5. If you’re like many agency owners, you might
say, “how I price depends on…”
6. If you’re like many agency owners, you might
say, “how I price depends on…”
• Agency Resources
7. If you’re like many agency owners, you might
say, “how I price depends on…”
• Agency Resources
• How desirable the client is, and why
8. If you’re like many agency owners, you might
say, “how I price depends on…”
• Agency Resources
• How desirable the client is, and why
• What the client needs to be successful, and if he’ll pay
what that costs
9. If you’re like many agency owners, you might
say, “how I price depends on…”
• Agency Resources
• How desirable the client is, and why
• What the client needs to be successful, and if he’ll pay
what that costs
• How hard you have to work (client politics, purchasing,
etc.)
30. 2
Billable Hours / Line-based Pricing
Agencies who use this model often have a
price sheet that shows the hourly rate each
service or line charges (e.g. creative, media,
workflow/programming).
32. 3
Fixed Package Pricing
This is another menu-driven option, but
instead of an hourly rate, it’s tied to
producing a specific number of deliverables
within a set period of time. These are sold as
one-off packages or in time-based retainers.
33. Download the full
Nail Your Pricing Strategy
ebook to learn more about transitioning
your agency to value-based pricing
here:
DOWNLOAD NOW
34. Ultimately, these cost based pricing models can be
vicious traps. You open the door for clients to
challenge you on…
35. Ultimately, these cost based pricing models can be
vicious traps. You open the door for clients to
challenge you on…
“Why do I need
blog posts,
wouldn’t PPC
be better?”
Expertise
36. Ultimately, these cost based pricing models can be
vicious traps. You open the door for clients to
challenge you on…
“Why do I need
blog posts,
wouldn’t PPC
be better?”
“Why should
producing an
ebook take 20
man hours?”
Expertise
Efficiency
37. Ultimately, these cost based pricing models can be
vicious traps. You open the door for clients to
challenge you on…
“Why do I need
blog posts,
wouldn’t PPC
be better?”
“Why should
producing an
ebook take 20
man hours?”
Expertise
Efficiency
Personnel
“Why use Ann
to design when
she costs more
than Steve?”
38. Ultimately, these cost based pricing models can be
vicious traps. You open the door for clients to
challenge you on…
“Why do I need
blog posts,
wouldn’t PPC
be better?”
“Why should
producing an
ebook take 20
man hours?”
Expertise
Efficiency
Personnel
“Why use Ann
to design when
she costs more
than Steve?”
Quality
“Stop using
stock or custom
photos, just use
Creative
Commons.”
39. All of which puts you in a tug of war with your client.
42. This is a method that quantifies your
agency’s value in ways a client can relate to
his profitability.
43. Once you understand your client’s context (their
goals, challenges, capacities, etc.), you’re able
to attribute your efforts to specific outcomes
which directly relate to profit.
44. There’s a formula you can use to
calculate your retainer costs based
on value.
45.
46. To do this calculation, you need two
data points from your client.
48. LTV is the estimated revenue that an
average customer will generate during the
entire span of his relationship with your
client. LTV helps you gauge the maximum
amount he should be investing in marketing.
10% of LTV
49. Precisely how LTV gets calculated depends
upon your clients business model – but
here’s a simple formula you can use to
estimate their LTV:
10% of LTV
57. Recap
10% of LTV is a good pricing metric to use when
your prospect wants to reduce his overall marketing
costs and still maintain his current growth rate
58. Recap
10% of LTV is a good pricing metric to use when
your prospect wants to reduce his overall marketing
costs and still maintain his current growth rate.
M-CAC is the pricing metric to use when company
growth, and using marketing dollars more
effectively, is the goal.