In a market filled with many individuals and organizations competing to offer the same services (SEO, Digital Ads, Social Media Management, etc.), it can often be challenging to gauge how much to charge for these services. On the one hand, you want to offer a low enough price that potential customers aren’t willing to pay less for equal or better quality work. However, on the other hand, offering a high enough price that is equal to the level of work completed and meets your standard of living. Whether you’re running a marketing agency, part of one, or do freelance digital marketing, setting expectations for digital marketing can be broken down after taking a number of variables into consideration. Here are a few things to consider when considering how to set your costs.
Know your Worth
It’s important to know what you’re bringing to the table for your clients in the form of experience and expertise. Throughout your career, you have likely learned and developed various skills and knowledge many others may lack. Clients are not only paying for your services but also for the expertise you have evolved over your time working in the digital marketing space. For example, if you’ve gotten certificates for various digital marketing services. These courses take time, and often money, to complete and allow you to move forward with the appropriate knowledge to succeed. Setting costs equal to the expertise you can provide for your clients is essential. If you’re starting your digital marketing career, you may not have everything covered yet; perhaps you only specialize in social media marketing initiatives. As you build your portfolio with experience and knowledge, you will likely add more to your toolkits, such as SEO, SEM, Web Development, and more. The more tools in your tool kit, the more you can offer clients and begin to move the costs of your services higher.
Find Your M.A.R.
Your M.A.R. or Minimum Accepted Rate can be found by looking at what you need to cover all your costs and meet your necessary standard of living. Start with your monthly fees; assess what costs you or your company are taking on to find the least amount of income you can afford to make each month. Once you’re aware of this M.A.R., you can determine the base costs for each of your services. It’s helpful to look at how long certain services take to complete and how often you may have to work on them throughout the month. For example, Web Development should likely have a higher cost than Social Media Management. Even though you may spend an equal amount of time on Web Development and Social Media Management for the month, once the Web Development project gets completed, your organization will generate no more income. However, social media management will likely continue monthly and be a steady cash flow. Not all services will have the exact hourly cost because some benefits will last longer than others. Clients should consider this cost discrepancy as getting discounted over the time the entire service will take.
Consider Your Organization’s Size
If you are an independent digital marketing specialist, it’s easier to gauge how much to charge a client since you know the costs you need to cover for yourself. However, if you run an organization, you are now responsible for distributing revenue from clients among other individuals for their time and effort contributed to work completed for a client. Up front, clients may feel they are getting a higher cost for work to be completed by your organization compared to individuals or smaller organizations offering the same services. However, with a strong team, you’ll be able to achieve more work quickly and will be able to bill accordingly. The client must understand this as well. The client must realize that your organization will be able to manage a more significant workload and complete it faster than an individual. The cost of your digital marketing work as an organization includes both the knowledge and expertise provided by your organization and the speed and capabilities the size of your organization can handle.
Managing the Appropriate Workload
It’s essential to track how much time and effort you, and your organization, put into each client to ensure that you are not under or over-performing based on the agreed-upon workload. Having multiple revisions when designing various media pieces for a client can be pretty standard. While there is nothing wrong with numerous revision rounds, it can sometimes drag on longer than initially anticipated. These continuous changes can take away from time dedicated to working on other clients, which can often result in a loss in income. As an example, let’s say you’ve budgeted 10 hours a week, for $250, for one of your clients. If you reach your 10 hours that week, but the client is still not satisfied with the work completed, you now need to cut into additional time, potentially already budgeted for other clients, without any extra income being gained from this work. Even if the client does compensate accordingly for the additional hours you’ve worked for them, the time lost for other clients may result in a loss of income based on the rate of work set for them. Setting a fixed number of revisions offered without cost and then charging for additional rounds of revisions is usually an excellent way to keep both parties keen on hitting a final approval within a specific time frame. This method helps to keep the creatives paid for their extra work while also making the client incentivized to be clear about any dissatisfactions they have with the job done.
Setting the expectation of digital marketing costs begins with understanding why and how you set the prices. Your experience and your time are the two most important factors for determining the cost of your services. While setting expectations for digital marketing costs can often be daunting, it usually takes stepping out of the driver’s seat and looking at what you’re offering from another perspective to see the value of your services.