As a marketer, cultivating and nurturing new leads for your business is the easy part, but converting them into paying clients can be challenging. Stiff competition, an influx of AI tools, and a changing marketing landscape create unique challenges, but one of the trickiest is pricing your services effectively.Â
On the one hand, you want to offer competitive pricing that helps you stand out among the crowd. On the other hand, you don’t want to undercut your bottom line and stretch your profit margin too thin. Unfortunately, part of the challenge is that there is no set guideline for pricing these services across the industry, so they change from one marketer to the next.
But you don’t have to go into this process blind. Whether you’re a freelance marketer or an agency, here’s everything you need to know about how to price marketing services so you and your clients are satisfied.
How to price marketing services as a freelancer
Here’s a quick rundown of the most common pricing methods freelancers use. It’s also important to note that no one option is better than another. Ultimately, the best way to price your services will depend on a variety of factors, which we’ll discuss later.
Hourly
Since most people work for an hourly rate, it makes sense to charge your clients the same way. In this case, you can determine the value of each hour of your marketing services and invoice accordingly. The downside, however, is that some projects may not require that much time, or some clients may not have the budget to pay per hour.
As a rule, hourly marketing prices are best for small projects with a defined scope and deadline, allowing you to estimate the total number of hours during the negotiation process.
Project-based rates
Because marketing is an ongoing process, projects often need to run for several days, weeks, or months to gain traction for the client. For example, you may be hired to run a social media campaign for three months, with benchmarks and reviews along the way.
For this reason, project-based pricing often makes the most sense. Rather than billing for a specific number of hours, you get paid a flat rate, no matter how much work is involved. The advantage of this method is that you’re not penalized for working quickly, but it can be difficult to estimate how much time each piece of the project will take.
Typically, project-based pricing works for individual campaigns with set deadlines and deliverables.
Partnership
While projects are the cornerstone of freelancing, you may have the opportunity to provide ongoing work with a particular client. In this case, forming a partnership allows you to do various jobs without having to invoice for each one.
Usually, the best way to format partnership pricing is to work on retainer. The client pays an upfront fee, you work for them until the retainer runs out, and then they decide whether to pay again. The advantage of this pricing structure is that it can offer a reliable income, and you can renegotiate the amount of the retainer as needed.
Menu packages
Sometimes, clients want specific marketing elements and don’t want to negotiate details. Examples can include logos, content pieces (i.e., blog posts), web pages, or social media packages.
In this case, you’ll need to create a priced menu of services and let prospective clients pick and choose what they want. It’s also a good idea to offer bundling packages at a discount so clients have more flexibility.
How to price marketing services as an agency
Running a marketing agency is much different than working as a freelancer, particularly because of higher overhead costs, including labor, tool subscriptions, and utilities (for example, if you rent office space). However, the benefit of being an agency is that you can work with larger clients and negotiate bigger, more long-term contracts.
Most agencies use either retainer or project-based pricing. Here’s a quick overview of how they work.
Monthly subscription/retainer
Typically, clients don’t hire a marketing agency for small jobs or short-term projects. Instead, the goal is to foster a long-term relationship, allowing the agency to develop stronger campaigns, analyze data, and scale results.
For this reason, retainers or monthly subscriptions often work best, especially when part of a longer contract (e.g., 6 or 12 months). This way, you can adapt your marketing strategy to the client’s needs and guide them toward their goals without having to invoice for everything along the way.
Project-based services
Sometimes, a client will hire a marketing agency for a specific campaign or marketing project. That said, setting marketing prices for a project as an agency requires greater diligence, since more factors are involved. In most cases, it’s best to set a minimum price for each project type and negotiate from there.
What is the best way to price your marketing services?
The best way to price your marketing services, whether as a freelancer or an agency, is to focus on the value you deliver to your clients. This means highlighting your expertise, your unique value proposition, and what clients can expect as a return on their investment.
Overall, frame your marketing prices as a means to an end, not a sunk cost. Many clients tend to look at the sticker price instead of paying attention to the bigger picture, so it’s up to you to help them see what’s possible with your services.
Factors that go into pricing your marketing services
Overhead
Typically, freelancers have much lower overhead because they’re a one-person show. As we mentioned, agencies have to consider how many people are working on a project, utility costs, and other expenses (like software or equipment).
Project scope
When discussing a marketing project with a client, it’s best to go into as many details as possible, including deliverables, revisions, status updates, and more. The more complex and time-consuming a project is, the higher the price should be.
Deadlines
As a freelancer or an agency, you should charge extra for expedited or rush services, as they can often require additional work or disrupt other projects you’re working on.
Market demand and competition
Ideally, clients will chase you for marketing services, but the competition is fierce across industries. That said, while knowing your competitors’ prices can provide valuable insight, prices should be based on your skill level and experience, not someone else’s.
Performance bonuses
If your marketing services lead to a much higher ROI than expected, you should reap some of the rewards. Adding performance incentives to your pricing structure is often a win-win and a compelling selling point.
Scaling
Marketing is never a one-and-done process, so satisfied clients will likely want to use your services again and again. As their goals scale up, so should your price points.
Tips for negotiating prices with clients
In a perfect world, clients would always agree to your pricing. However, in many cases, you’ll need to negotiate the terms of your contract. Here are a few ways to make this process go as smoothly as possible.
- Anticipate questions and objections – Clients may ask things like, “How much do marketing agencies charge?” or “What guarantees do you provide?” Knowing how to respond ahead of time puts you in a much better position and makes you look more professional.Â
- Highlight your unique value proposition – Not all marketers are the same, so showcase what makes you different. For example, do you have experience running specific types of campaigns? Do you offer better content creation than other marketers? Are you faster than the competition?Â
- Focus on their goals – Remember that working with a client means building a relationship. Asking questions about their marketing goals helps reframe the discussion to be less about costs and more about achieving those goals.Â
Mistakes to avoid
- Don’t rely on static pricing. Instead, customize each contract to fit the client’s budget and your needs.Â
- Don’t focus solely on pricing. Highlighting the ROI of your services can make clients more agreeable to your terms.Â
- Don’t ignore your bottom line. When setting prices, give yourself some negotiating room instead of starting as low as possible.
Why pricing your marketing services correctly matters
All too often, freelancers and agencies tend to underprice themselves when trying to land clients. Unfortunately, lowering your prices rarely delivers better results. First, it usually attracts low-value clients who may try to monopolize your time. Second, it can lead to burnout when you’re stretching yourself (and your budget) too thin.
Instead, determine the minimum pricing structure that will keep you comfortable and happy and negotiate with clients from there.
FAQs
When should I offer discounts or reduced fees to clients?
Generally speaking, discounted rates should be reserved for repeat clients to foster long-term relationships. Alternatively, you may offer reduced rates for specific types of clients, such as nonprofits or charities.
When should I raise or lower my rates?
As with any business, follow the law of supply and demand. If you are struggling to find new clients, it may be best to lower your rates slightly to be more competitive. If you’re struggling to keep up with your workload, raising your rates can help sort your client list or allow you to hire assistants or collaborators.
