Question

Topic: Advertising/PR

Have Some Questions About Proper Pricing Structure

Posted byheidibisbee在7/30/2009 at 11:00 PM ET 250 Points
I have been in Marketing for about 15 years, however I started my own agency less than 2 years ago. My strength and background is in graphic design, however I have been expanding and helping more of my clients and start-up companies with Branding, Company names and tag lines. So far I have a set pricing on production, but my question is how do I properly charge for tag lines, etc? By the hour? Or, should I just charge a set price?

Also, is it a good idea to charge for a consultation? I do not at this time, but should I be?

I was also doing Marketing plans for companies free - I soon realized that this was eating up major hours, and I wasn't making any money. I started charging a flat fee based on their marketing budget, since the size of the budget depends on the intensity of the plan.

I would love to hear some input since I am a rookie on how other agencies are charging. I am very creative, but need some help with the detail oriented side of the business!

Thanks,

Heidi Bisbee
Bizzybee Marketing, LLC
"Creating a Buzz for your Business"
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RESPONSES

  • Posted bybill.hall在7/31/2009 at 6:18 AM Accepted
    The best thing to do is go to Target Marketing's website (google target marketing magazine) and purchase their book "who charges what" which will give you standard charges on all sorts of services so you can better position your pricing.

    In CT, logos usually run around $1500 roughly and taglines about the same amount - set price vs. by the hour where you can get ripped off for developing a winning tag line or logo sooner.

    I also would encourage you to work with some top copywriters since design is great, but without the sales pull behind it, you can only deliver branding related services vs. results oriented marketing.

    I hope this helps.
    Bill
  • Posted byGary Bloomer在7/31/2009 at 7:11 PM Member
    Dear Heidi,

    DO NOT CHARGE BY THE HOUR. Been there thank you and it's brutal because you wind up being treated like a slave.

    Follow the advice from Phil and Bill because they know what they're talking about. And also consider charging a day rate. But giving too much stuff away is the road to ruin.

    I hope this helps.

    Gary Bloomer
    Wilmington, DE, USA
  • Posted bymgoodman在7/31/2009 at 8:15 PM Accepted
    I can't resist: DO NOT CHARGE BY THE HOUR. It motivates you to be inefficient and it motivates the client to minimize the time he/she spends giving you the information you need in order to do a good job. Everyone is mindful of the meter ticking, and it sets exactly the wrong tone for a relationship.

    There's a large section of the bookRasputin For Hirethat's devoted to pricing of consulting services (including creative and other marketing services). You might want to check it out. It's also one of the topics covered in the special reportExperienced Consultants Talk About Consulting.

    后者是一个圆桌说cussion with five of the top experts here on the MarketingProfs Know-How Exchange in which they share experiences and advice. You can order either of these by clicking on the link above. (The special report is actually free if you order the book.)

  • Posted byheidibisbee在7/31/2009 at 8:20 PM Author
    Great input and advice. I'm definitely asking myself the question if I am in fact giving it away.

    So if you are designing say a postcard or a brochure, then you are recommending charging a flat fee? What if I charge a flat fee, and I get one of those clients (and I know we've all had them) who has a gazillion changes, and before I know it I have put hours upon hours into it?

    Also, I can't believe the $1500 price! I live in a small town outside of Toledo, Ohio - so not a big city, and it just doesn't seem like there is the business to support those kind of rates. Would those be the kind of rates in a city as in Chicago or New York?

    I just want to make sure I am not undercutting myself, but also not chasing my clients away. I know I was always taught to shoot hi, as that will reflect how I view my self worth, but am I turning people off being in a small town? I knew of a woman in Toledo that charged similar rates - did great work, but eventually lost many clients over her reputation of charging too much.

    谢谢你的建议和链接- I will follow them as well as any additional input you may have.

    And your right Phil, you can always recoup the time from meetings and consultations!

    Thanks,

    Heidi
  • Posted bymgoodman在8/1/2009 at 8:44 PM Accepted
    The key to setting a fixed fee and not getting used is to be very clear about what is included and what isn't. If you agree to one round of revisions included in the fee, then you can (and should) charge for additional revisions after the first one. It's possible the "change orders" will end up billing as much as the original project fee. In fact, one way to keep the initial price down is to limit the scope of the deliverable. Just be sure you're clear up-front, so the client isn't surprised.

    The key is being very clear and fair to the client.

    As for how much you can charge, it all depends on the value of what you do. If you're working for very small businesses, where a 10% increase in business would only generate $1,000 in incremental profit, then you can't very well charge $2,000 for the program that generates the 10% increase in business. So you have to somehow calibrate your fee to make good sense for the client.

    As for WHERE you live, it has almost nothing to do with the fee. The fee should be a function of the value you deliver to the client ... not a function of the zip code. We've worked for clients in New York, Chicago, Detroit, Seattle, Dallas, Charlotte, Wilmington, Washington DC, and a dozen other cities (including some in Europe). The fees are all essentially the same for similar work ... and always in some rough proportion to the value we expect the client to realize.
  • Posted bymgoodman在8/1/2009 at 8:57 PM Moderator
    P.S. I often make the speech to clients about how the fee shouldn't be their greatest concern. It should be the value they get, or ROI.

    If they want hamburger, then they should expect to pay hamburger prices. And if they want steak, they should expect to pay steak prices. But they shouldn't expect to pay for hamburger and get steak. It doesn't work that way.

    Very often the consultant with the highest fee will deliver the greatest value. If the fee is beyond your budget, then you need to cut back on the scope of the project, not hire a consultant who will deliver inferior work (and charge a lower fee). The cheapest consultant may ultimately cost the most.
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