THE MARKETING AGENCY PRICING EQUATION – HOW TO PRICE AGENCY SERVICES
Let’s talk about the magical pricing equation for your marketing agency. Isn’t it time to STOP trading time for money and price agency services for what you’re really worth?
A lot of agencies get into the predicament where they are charging by the hour and then as they start working more efficiently they complete the work faster and actually lose money. That’s right! As you get smarter, you make LESS MONEY. Don’t let it happen… or if it is already happening to you, here’s how to make it stop.
1. Understand the client’s expectations. If you price lower than the client is expecting it raises questions as to why you’re too low. Think about if someone offered to sell you an amazing sports car for only 0. You’d wonder what’s wrong it. The same is true for when you price agency services. If it’s too low, they’ll wonder what’s wrong and more than likely you’ll lose the pitch.
2. Fill in the pricing equation and start charging based on value. To do this, look at the value you have provided to your clients over the last 6 months and then divide it by 10. That way you can rationalize results to your new prospects and give them actual (average) numbers. And, you can promise them a 10X ROI.
So that’s: (REVENUE * # OF CLIENTS) /10 = PRICING
So, if you want to make more revenue you can’t just “willy nilly” raise prices. But when you understand expectations and past results you can apply them to the agency pricing equation and price your services according to VALUE.
How does your agency determine pricing? If you’re charging hourly, have I convinced you to stop losing money? 🙂 Comment below and tell me your story. Your success is my why.
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JASON SWENK IS AN AGENCY ADVISOR THAT GUIDES MARKETING AGENCIES THROUGH A PROVEN FRAMEWORK FOR GROWING THEIR AGENCY FASTER & EASIER.
Fresh out of college Jason was off to work for Arthur Anderson, one of the big 5 consulting firms. He quickly realized that he could never work for anyone other than himself. He decided to change direction, launch a digital agency that quickly grew to a multi-million dollar operation working with brands such as AT&T, Hitachi and Lotus Cars. After 12 years of steady growth, the agency caught the attention of bigger agencies and Jason sold it in 2012.
Now, Jason leads http://JasonSwenk.com, a unique media company & consultancy helping marketing agencies grow & scale their agencies faster by applying the framework that he used to grow, scale and eventually sell his agency. Jason has helped over 10,000 agencies in 23 countries meet or exceed their business goals.
Jason currently hosts two shows that are available for download…
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SwenkToday a daily VLOG that documents the entrepreneur journey of building another multimillion dollar business, where he share the latest strategies, and answers the most burning questions entrepreneurs have.
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