Jul 19, 2018
This video is all about digital agency pricing. What should your agency be charging for its services? What is the 10X rule I always talk about?
Proper pricing plays a major role in your agency's profitability. So let's get into it and get your questions answered!
"I watched your video about the 10X rule and just wanted to verify something. I have a client who does $1 million in sales, does that mean I should be charging them $100,000 for marketing service? That seems like a lot. Can you explain further?"
The key point here is to look at the results you're delivering to your clients, not the revenue. So no, if they're a $1 million business that does not mean you charge them $100,000. You have to qualify the value of the results you're delivering. The only way you would charge $100,000 is if your marketing services/efforts were directly related to $1 million worth of their business - and even then, you'd want to slowly escalate the client by walking them up a service offering ladder.
Try watching this video to get even more clear on the 10X Rule: https://youtu.be/8M2W8btowHg
"I'm having difficulty imagining a scenario where I can afford to hire even one additional employee during my first year of business, due to costs and pricing. I'm trying to start a small agency targeted to smaller businesses who may be willing to pay less for a recent college graduate (I do already have one client). How can I be sure to price correctly so I can afford to hire help, or should I just outsource occasionally?"
First, don't undercut your worth just because you're right out of college. Don't charge less than anyone else. And furthermore, I want you to stop looking at what others are charging because it's irrelevant. Instead, figure out how much you want to make in the next year. Then, figure out how much does the business need to make in order for you to pull that salary out. Also, what resources do you think you need so you don't have to do everything yourself. From there do some backwards math to determine how many clients you need and how much you need to charge.
If your current clients can't absorb the pricing you need to charge then you need to go after the ones who can. And always make sure you're building trust so prospects and clients understand why you're charging what you are.
This pricing plan is a long term one -- be patient and you'll see results in 3 months or 6 months down the road. So raise your pricing and be consistent.
So, what questions do you have? Comment below and tell me how I can help you and your agency.
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JASON SWENK IS AN AGENCY ADVISOR THAT GUIDES MARKETING AGENCIES THROUGH A PROVEN FRAMEWORK FOR GROWING THEIR AGENCY FASTER & EASIER.
Fresh out of college Jason was off to work for Arthur Anderson, one of the big 5 consulting firms. He quickly realized that he could never work for anyone other than himself. He decided to change direction, launch a digital agency that quickly grew to a multi-million dollar operation working with brands such as AT&T, Hitachi and Lotus Cars. After 12 years of steady growth, the agency caught the attention of bigger agencies and Jason sold it in 2012.
Now, Jason leads http://JasonSwenk.com, a unique media
company & consultancy helping marketing agencies grow &
scale their agencies faster by applying the framework that he used
to grow, scale and eventually sell his agency. Jason has helped
over 10,000 agencies in 23 countries meet or exceed their business
Jason currently hosts two shows that are available for download…
The Smart Agency Master Class Podcast, dedicated to providing tactics and strategies to agency owners and decision makers that cut through the BS, focus on exactly what works and what doesn’t; and
SwenkToday a VLOG that documents the entrepreneur journey of
building another multimillion dollar business, where he share the
latest strategies, and answers the most burning questions
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