How To Price Your Services & Improve Agency Profitability
Dylan is a social selling expert and knows how to utilize that effectively in a modern sales process. Dylan is running his own digital marketing agency and his work has been featured by companies like Buzzfeed, Thrive, and Future Sharks. In this webinar, Dylan explains how to price your services and improve agency profitability.
PromoRepublic is a leading social media marketing platform that helps brands and marketing agencies easily manage hundreds and thousands of social pages: https://promorepublic.com/en/
- Common Pricing Mistakes & How to Fix Them
- How to Select Your Pricing
- Tips to Improve Agency Profitability
How often are you thinking about your pricing this year?
Set and Forget Pricing
- Don’t treat pricing as an afterthought, it should be a core competency.
- We spend so much time thinking about sales & marketing for our business, why is pricing not thought about as much?
- Make sure to frequently revisit your pricing strategy.
- When was the last time you experimented with your pricing?
- Introduce some different packages, switch up the price point, A/B test.
- Even companies that regularly check in on their pricing often don’t experiment to figure out what their customers want, and what they’re willing to pay, in order to make changes.
Too many or Too Few Options
- Too many options can confuse your buyers and give them more reasons to become picky.
- Too few options can only capture certain points along the demand curve, you may be underselling yourself. For example, your customers need social media management and growth, but they also need more traffic. If you don’t have this option you can’t sell it and lose your customers.
- Realign the number of tiers you have to be right in the Goldielocks zone - not too many, not too few. How do you know how many? Only from your experimentation & persona research.
- Once you condition your customers to expect discounts this conditioning is very difficult to reverse.
- If you must offer a discount, make sure you benefit in return. And make sure that your customer knows it.
For example, if your client can pay 3-4 months in advance you can give a 10% discount for a service package.
How to Select Your Price
There is no right or wrong way and there is no silver bullet. You should try and experiment.
What to consider when pricing
- Hourly Pricing vs Retainer vs Value-Based Pricing vs Performance-Based.
- Your overheads - not only staff costs but time, software, taxes, accounting, day-to-day business costs, etc.
- Productizing your service.
- How are your competitors pricing?
Tips to Improve Agency Profitability
- Move away from pricing based on time or effort.
- Optimize your operations - audit costs.
- Introduce automated invoice collection.
- Upsell current clients additional services.