During my experience as a marketer, the question “What budget would you take for that marketing service?” regularly comes up. And, behind its apparent ordinariness, it is more tricky than it looks: Can a client ask me to set a price before any talk about a project? How do I manage in these circumstances? That’s what I am going to show you now.
Help your client think about his budget without getting stuck in a price range
I don’t always get why few clients speak of their marketing efforts during the first talks. A consultant needs to know his client’s budget or take part in the thinking process. This can be time-saving for both. On the other hand, a client knowing a freelancer’s rate may guess his level of expertise, but not much else.
Then, giving a price indication to a client for work without discussing the project first is absurd. Agreeing on a price without precisely defining the amount of work to be done is risky. And often, it is just impossible to plan the human resources needed for a campaign in every detail. As a result, non-agile billing methods are, in many cases, not very suitable for marketing services. And I would not recommend defining the budget to the penny before the project begins.
That said, I believe that a consultant should never lose an opportunity to help his client in the thinking process. When a client wants to know what to expect in terms of investment, I think it is helpful to share some information based on knowledge of the industry and experience.
Give your clients real numbers on marketing spend
Any experienced consultant will tell you: his added value depends on how much time he can save his clients. Depending on the degree of expertise that is required, its scarcity, and how long it is needed, 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 about 11% of their revenue. Social media spending represents 12% of the marketing budget, and it is expected to top 22.5% in the next 5 years, according to Deloitte’s most recent CMO Survey. On average, businesses that outsource their social media marketing spend about $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.
Help your client identify his real needs
When a client does not yet have a clear idea of his objectives, the skills he is 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, you can start with basic questions during your interviews: What are the objectives to be reached? What level of expertise is expected? At what stage is the project? What help is needed? Strategic input, complete ownership? When would the project start?
You can continue with more personalized questions that try to anticipate the possible strategy that may be recommended: is it for a new product or a product with certain notoriety? 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 that truly understand marketing not only think budget in terms of 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!