During my experience as a marketer, the question “What is your price for [your random marketing service]” regularly comes up. And, behind its apparent ordinariness, it is more tricky than it looks: Can a client ask to set a price before any talk concerning their project? How to manage in these circumstances? That’s what I am going to show you.
You can talk of a budget without getting stuck by agreeing on two simple rules
Few clients like to talk about their marketing budget. Even fewer think about it in detail. Thus, when someone requests your services without sending you a detailed RFP, it is an invitation to participate in the thinking process that leads to the formalization of their needs.
During the process, agree with your client on one rule of common sense: you cannot give them a price indication without discussing their project. How would you know otherwise the amount of work that their project requires?
Then, agree with your client that unicorns don’t exist, as quotes detailing 100% of your work for a whole time-frame. You meet so many variables throughout a marketing campaign, budgeting in advance its total cost is absurd. Agile billing methods are likely the only suitable.
That said, don’t lose an opportunity to help in the thinking process. It is logical to try anticipating what to expect in terms of investment. In some cases, I think it is helpful to share some information concerning marketing spend.
Don’t be afraid to talk real numbers on marketing spend
Any experienced consultant will tell you: their added value depends on how much time they can save their clients. Depending on the degree of expertise your client requires and how long they need it, the investment in consulting services will vary greatly.
In all successful companies, the marketing budget takes a significant share of their revenue. Gartner 2019-2020 CMO Spend Survey found that marketing budgets actually averaged 11% of their revenue. Social media represented 12% of the marketing budget and will top 23% in the next 5 years, according to Deloitte. On average, businesses that outsource their social media marketing spend around $200-$350 a day. That is between $4000 and $7000 per month, $48,000-$84,000 per year.
These figures are averages for all companies regardless of the industry. But according to my experience, any business spending less than 10% of its projected revenue in marketing is making a strategic mistake.
Sometimes it’s just too early to talk about the budget
When a client does not yet have a clear idea of their objectives, the skills they are looking for, and the project deadline, it is too early to propose anything. If what the client is looking for is simply an exchange of ideas, it is up to you to see if you are willing to help.
To assess a project and determine what value you can add to it, start with basic questions during your interviews. What are their objectives? What level of expertise do they expect? At what stage is their project? What help do they need? When would the project start?
You can continue with more personalized questions that try to imagine a possible strategy: is it for a new product or a product with some publicity? Is the sector competitive or niche? How much time does your target need before making a purchase decision?
Performance-Based Pricing is a good idea in specific cases
Many marketing consultants are literally prisoners of the budget issue, just as clients are. The reality is that, after some time on a project, a consultant knows what results from successful viral and paid campaigns he gets, as long as the strategy and the marketing process stay the same. What if this performance could reward the consultant for the part he is managing directly?
Businesses truly understanding marketing don’t think only about their budget as an investment they are willing to spend. They think about the results they want to achieve.
I believe all the more in this model that, as a freelance consultant, it’s the only way I work with long-time clients. It allows the client-freelancer relationship to become a true partnership, with everyone looking in the same direction.
What do you think? Your turn to share your opinion and experience!