This is a presentation I gave at SLCSEM's DMC2017 conference. It is the culmination of all that I have learned over the last two years selling consulting work, seeing over 1,000 marketing projects, and speaking with 250+ agencies and consultants as well as the Digital Marketing Pricing Survey released in February 2017 on GetCredo.com - https://www.getcredo.com/digital-marketing-industry-pricing-survey/

1. Pricing in the
Digital Marketing
Industry
John Doherty
Founder, GetCredo.com
SEO consultant
@dohertyjf

2. Let me tell you a story about pricing
@dohertyjf

3. My background
I have seen a lot of digital
marketing projects
1,000+
Ranging in budgets from
$500/mo to $30,000/mo
I’ve sent a lot of work
to marketers
$6,000,000+
In the last two years
I’ve discussed work
with a lot of marketers
250+
In the last two years
alone
@dohertyjf

4. I have seen a lot of pitches and proposals
@dohertyjf

5. How most people approach pricing
¯_(ツ)_/¯
@dohertyjf

6. No one wants to talk about
how they price or how
much/little they make!
@dohertyjf

7. Too many end up too
hungry to eat.
@dohertyjf

8. Today I try to change that
@dohertyjf

9. Today’s goals
1. What do agencies/consultants charge for their digital
marketing work?
2. How to price your own work
3. How to sell better consulting projects
4. How to buy marketing services
@dohertyjf

10. Bringing clarity to pricing
What do agencies/consultants charge for their digital marketing
work?
@dohertyjf

11. https://www.getcredo.com/digital-marketing-industry-pricing-survey/

12. Pricing in generalities (consultants)
• Solo consultants charge less per hour than agencies on average
($153.75 vs $161.58-$185.49 depending on size).
• US solo consultants charge $165.02 per hour on average. This is more
than the worldwide average for consultants - $153.75.
• Solo consultants price themselves consistently based on their years of
experience, with all of the three major areas we looked at (hourly,
minimum monthly, and minimum project) going up as the years of
experience went up.
• More experienced solo consultants on average charge less per hour
than less experienced consultants, but their minimum projects are
bigger.
@dohertyjf

13. Pricing in generalities (agencies)
• Agencies who do only strategy charge a 66% higher hourly rate than
agencies who do only services ($194.55 vs $120 per hour).
• Agencies do not price themselves consistently based on the amount
of time they have been around.
• US hourly rates range from 35.54% to 222% more expensive than UK
hourly rates, depending on the size of the agency.
• Strategy consultants and agencies command higher hourly rates,
minimum projects, and one-time project fees. It pays to work on
strategy as well as services, or just strategy at the expense of services.
@dohertyjf

14. A word about benchmarks
@dohertyjf

15. Average rates by company size
@dohertyjf

16. Agency/consultant prices by type of work
@dohertyjf

17. Consultant pricing by years of experience
@dohertyjf

18. Takeaways for pricing
• If you are an agency and charge less than $120/hr, $1,500 monthly, or
$1,250 for a single project, you are below the average.
• If you are a consultant and charge less than $150/hr, ~$1,000 as a
minimum project, or ~$1,000 as a retainer, you are below average.
@dohertyjf

19. How to price your own
work
Everyone’s needs are different
@dohertyjf

20. You should never be able to say this
“We agreed to work together after I significantly came down on
my pricing.”
@dohertyjf

21. So how do you price your work?
No one prices themselves the same, but there are some rules of
thumb that you need to follow (IMO).
And my advice might be a bit contrarian.
Stick with me.
@dohertyjf

22. Pricing is dynamic
As you get more experience, your types of clients change, and
your business changes to keep up with the market, your pricing
will necessarily change.
How you price as a solo consultant is very different from how you
price as a small agency is very different from how you price as a
larger agency.
@dohertyjf

23. Traditional pricing advice
Most pricing advice follows along these lines:
1. As a solo consultant, figure out your desired income, then
work backwards according to the number of hours you want to
work a week and number of weeks per month you want to
work. That’s your hourly rate.
2. In an agency, you need to bill a client at minimum 3x per hour
what it costs you to pay the people doing the work.
@dohertyjf

24. Some problems with this
As we see with pricing, generalities are a starting point.
1. Solo consultants often overestimate how many hours per
week they can bill. Realistically you’ll bill 30 maximum, not 40.
2. If you start with what you want to make, you’ll likely
undervalue yourself. Why put a limit on it?
3. To build a profitable agency, you need to pay your people as
little as possible and charge clients as much as possible. Not
good!
@dohertyjf

25. Price (and pitch) on value
Start with what you need at minimum to cover your costs
(whether a consultant or an agency). That’s your floor, not your
maximum.
Good pricing involves going deeper than hourly rate.
What is your work worth to your client?
@dohertyjf

26. That is your price
Why should someone pay more for services than someone else?
Because the payoff is bigger. There’s more at stake for them.
And often, the work is a lot more involved and specialized.
Any decent marketer can make someone $500 more per month.
@dohertyjf

27. It’s a lot harder to make someone an extra $500,000 per month.
If you can make them that, then they should pay more than the
$500/mo extra client.
@dohertyjf

28. Agency pricing
The industry standard is that you need to be billing 3x salaries
paid to run a healthy agency. Less than that you'll run out of cash
or come into a crunch if you lose a big client.
Of course if you can bill 4-5x salaries then do it!
If you can’t, then you either need to automate some pieces or
move into clients that can pay it.
@dohertyjf

29. Solo consultant pricing
If you are a solo consultant, it's cleanest and easiest to price as a
retainer.
It’s much easier to build a successful consulting practice of
retainers than one-off projects. Less overhead to get new clients,
do sales, etc.
That said, you can build a great life off high-priced one-off
projects.
@dohertyjf

30. My pricing rubric
Hourly rate (to reach base expenses and income after tax) *
hours needed per month + 20%
@dohertyjf

31. Why +20%? Isn’t that price gouging?
No.
An extra 20% when it’s within your client’s budget covers scope
creep (for a while).
It can also mean the difference between a profitable and
unprofitable project when unexpected expenses come up (new
tools, etc), especially on lower priced projects.
@dohertyjf

32. Sales tips for marketers
How to sell better consulting projects
@dohertyjf

33. How to sell a retainer project
Retainers can take a bit longer to sell, but they are ultimately the
best way to build a consulting practice/agency.
To sell them, you must:
1. Tell them the results you are hoping to see based off past
experience.
2. Outline the first few months of effort (no results without effort).
3. Explain how results are seen (especially in SEO, not one
month).
@dohertyjf

34. How to sell a single project
One-off projects are much easier to sell than retainers. You need
more of them each year to meet (and surpass) your revenue
goals, which means increased overhead.
To sell a single project (eg an audit):
1. Have an example of that deliverable ready to go
2. Have case studies from prior clients like them
3. Be clear what is included and what is not
4. Set expectations for what you need and time to completion
from start date.
@dohertyjf

35. Selling hourly pricing projects
I almost never do hourly-based consulting. You shouldn’t either
because then your income is directly tied to the hours you
work.
If you must do an hourly project:
1. Only do it for people you know and trust;
2. Try to set a minimum number of hours (eg a retainer)
3. Take your retainer hourly rate and increase it by 25%
@dohertyjf

36. What about pay + equity/profit sharing?
I have a lot of startups asking if agencies/consultants will work on
the basis of lower hourly rate + equity.
My advice is to not do this.
If you cannot control the outcome and don’t understand startup
equity, you will likely get screwed.
Not everyone is your client.
@dohertyjf

37. Negotiating pricing
When someone asks you will do the work you pitch to them for
cheaper, you need a good way to respond.
Something that works well:
“I negotiate on scope, not base pricing.”
If they want $5,000 of work for $2,500, show them what they can
get for $2,500. Do not give $5,000 of work for $2,500.
@dohertyjf

38. Discussing budgets
Most businesses are reticent to tell you how much they have
budgeted. Some businesses also do not know what they should
expect to pay for good SEO/PPC/marketing because they are not
marketers.
Everyone has an upper limit though.
@dohertyjf

39. Discussing budgets
Ask them this:
“If I told you that what you want is going to cost $XX,XXX
per month, what would you say?”
XX,XXX is variable depending on who your client is (Fortune 500
vs SMB, for example).
Their reaction will help you gauge their ability to pay.
@dohertyjf

40. Hiring the right marketing
agency/consultant
How to buy marketing services
@dohertyjf

41. For the inhouse folks in the room
Sometimes you need backup from an agency because you have
too much on your plate.
68% of large enterprise companies have an SEO team of less
than 5 people (study on Moz). Compare to 77% of 501-1000
person companies.
@dohertyjf

42. So how do you hire the right help?
If you’re looking to hire an agency/consultant to help you out, you
need to take the following into account:
1. What do you need help with? (strategy, services/production,
combination?)
2. Do you need them onsite (either in your city or to travel to
you)?
3. Are you set up internally to get their work done?
4. Who will manage them?
@dohertyjf

43. So how do you hire the right help?
There are 4 factors to look at when hiring an agency/consultant:
1. Do they have proven experience with your type of website (to
do the marketing)?
2. Can you afford them?
3. Is their work style similar to yours?
4. Can you trust them in front of your executives?
@dohertyjf

44. Doing great work is not enough
To be successful in working with an agency/consultant, you must
find the right combination of ability to do the work and ability to
help you get things done internally.
Culture matters very much when working with a marketing
provider. Most people overlook this.
Would you want to hire them fulltime? If not, why are you hiring
them part time?
@dohertyjf

45. You get what you pay for
Bargain hunting will not serve your end needs. Would you hire a
babysitter for your child simply because they are cheaper than
another?
@dohertyjf

46. Get clear on what you will get
Asking the agency/consultant to break out what you will
specifically get for the prices they are charging is totally
reasonable.
You set your own expectations.
@dohertyjf

47. Hourly rate doesn’t matter
Knowing their hourly rate doesn’t serve your end goal.
Better to understand what you'll accomplish by working with them
(get them to help you forecast based on data)
@dohertyjf

48. NDAs and non-competes
Asking them to sign an NDA before you share any details with them is
counter productive. Avoid at all costs. Most good agencies won't do it.
Getting an NDA or before sharing your Analytics/Search Console data
with them *is* ok.
Depending on your type of business, non-binding non-competes can
be ok. Ask if you can trust them though.
Caveat - I am not a lawyer.
@dohertyjf

49. “How much does it cost?”
Don't come to an agency or consultant with what you need and
ask what it costs.
Anyone who gives you a flat rate won't get you the results you
want (broadly). Instead, come with what you think you need, ask
them to come back with a proposal based on data, then go from
there.
@dohertyjf

50. Be willing to commit
Doing something as a "test" for just a month will never turn out
well for SEO. Similarly, marketers shouldn’t agree to this.
PPC, it might make a bit more sense (I’m no PPC expert)
depending on the project.
@dohertyjf

51. In conclusion
@dohertyjf

52. Pricing is really hard
@dohertyjf

53. It’s dynamic
@dohertyjf

54. It’s different for each client
@dohertyjf

55. Set your minimum to meet
your needs
@dohertyjf

56. Know benchmarks, but
don’t treat them as law.
@dohertyjf

57. Goal is to price on value,
not hours worked.
@dohertyjf

58. I’m writing an ebook (will
be paid) on pricing.
Sign up here:
Johnfdoherty.com/pricing-book/
@dohertyjf

59. The whole survey results
can be found here
https://www.getcredo.com/digital-marketing-industry-pricing-
survey/
@dohertyjf

60. Thank you SLC!
@dohertyjf

61. Thank you.
Find Credo online:
 GetCredo.com
 Twitter.com/getcredo
 Facebook.com/getcredo
Find me online:
 Johnfdoherty.com
 Twitter.com/dohertyjf
 Facebook.com/mrjohnfdo
herty
My weekly newsletter:
 johnfdoherty.com/email-
newsletter/
John Doherty
Founder of digital marketing
marketplace/platform
GetCredo.com
Former Growth Lead and
Marketing Lead at Trulia
Rentals and HotPads.com,
part of the Zillow Group
family
Former consultant at Distilled
in New York City
Based in Denver, Colorado