This document discusses pricing methods for digital marketing services. It presents four common pricing models: time and materials, fixed bid projects, retainers, and value-based pricing. For each method, it outlines the description, pros, cons, and typical opportunity types where each method may apply. The document provides examples and considerations to help digital marketing agencies determine the most appropriate pricing approach for different types of client engagements and projects.

1. How
to
Price
Your
Digital
Marke3ng
Services

2. Speakers
Rob Eleveld, CEO, Optify
Rob Eleveld, CEO of Optify is a 20-year tech veteran with deep
experience in B2B sales and marketing.
Rob is passionate about growing business through partner channels at
Optify and excited about the opportunity that inbound marketing affords
to forward-thinking digital marketing agencies.
Follow Rob on Twitter - @RobertEleveld
John C Stone III, Founder and CEO, Revenue Architects
John Stone is the founder and CEO of Revenue Architects – a services
firm that helps clients build innovation and new architectures for
revenue growth.
Prior to starting Revenue Architects, John was President of CrossTech
Partners, a digital marketing agency, and held leadership posts at PA
Consulting, Viant (digital business), AT&T and IBM.
Follow John on Twitter - @jcstone3
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3. About
Op3fy
Optify delivers a simple digital marketing software suite for agencies. Our
complete cloud-based software eliminates the need for standalone tools and
empowers agency marketers to easily create and manage demand
generation programs across multiple websites, nurture prospects, prioritize
the best performing programs and streamline reporting of client results - all
from one login.
Optify, Inc
710 2nd Ave, Suite 840
Seattle, WA 98104
1 (206) 388-4234 (phone)
1 (877) 2-OPTIFY (toll-free)
1 (206) 787-1410 (fax)
Sales: sales@optify.net
Help: support@optify.net
Other Inquiries: info@optify.net
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4. Agenda
• Pricing
prerequisites
• Four
pricing
methods
• The
service
model
• Final
3ps
• Q&A
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5. Poll
Ques3on
#1
• How
do
you
feel
about
your
current
pricing
?
Score
your
pricing
maturity
level:
0%
10%
20%
30%
40%
1. I’m
just
star3ng
and
not
sure
what
the
right
pricing
model
for
me
2. I’m
really
struggling
with
seTng
it
3. I’m
not
sure
if
I
have
it
nailed
4. I
think
it’s
okay,
could
use
some
adjustments
5. I
have
it
nailed
down
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6. Pricing
Prerequisites
–
Cost
Structure
• Fixed
&
Variable
• Margins
• Create
a
baseline
blended
rate
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7. Pricing
Prerequisites
–
Market
Condi3ons
• Market
prices
• Price
elas3city
• Differen3a3on
US
UK
Source:
h_p://www.seomoz.org/blog/seo-­‐pricing-­‐costs-­‐of-­‐services
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8. The
Four
Pricing
Methods
for
Your
Services
Descrip0on
Pros
Cons
Opportunity
Type
Time
&
Material
Fixed
Bid
Project
Retainer
Value-­‐Based
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9. Time
&
Material
Google
server
farm
(source:
VentureBeat)
Pros
Cons
Opportunity
Type
Your
firm
maintains
profitably
if
Client
may
begin
to
not
include
you
Any
project
lacking
3ght
defini3on
scope
increases,
or
the
scope
isn’t
in
key
conversa3ons.
Percep3on
or
deliverables.
Olen
clients
will
well
understood.
you
are
always
“on
the
clock”.
s3ll
want
at
least
an
es3mate.
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10. Fixed-­‐Bid
Project
Pros
Cons
Opportunity
Type
Client
feels
they
can
budget
a
If
you
don’t
ac3vely
manage
Good
way
to
earn
trust
with
a
new
project,
so
they
olen
prefer
this
expecta3ons
and
scope
creep,
a
client
on
a
small
project,
or
a
type
of
method.
project
can
quickly
become
project
you
do
olen.
unprofitable.
General
rule:
20-­‐30%
premium
for
fixed
bid
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11. Retainer
Pros
Cons
Opportunity
Type
Improved
cash-­‐flow
visibility
and
Very
few,
except
that
you
may
Olen
proposed
aler
trust
resource
planning.
Clients
can
need
to
manage
client
expecta3ons
established
with
ini3al
project,
or
if
budget
a
consistent
number.
so
as
to
not
let
scope
of
services
you
have
well-­‐defined
services
and
grow.
client
references
(professional
website,
case
studies,
published
pricing,
etc.).
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12. Value-­‐Based
Pros
Cons
Opportunity
Type
Usually
much
higher
gross
margins.
Tougher
to
do
repeatedly
without
Ongoing
service
or
campaign
where
significant,
tangible
differen3a3on
replacement
cost
would
be
a
from
compe3tors
(defined
headcount
or
more.
deliverables,
specific
reports
and/or
(Note:
a
blended
team
could
do
that
insights).
too)
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13. The
Four
Pricing
Methods
for
Your
Services
Descrip0on
Pros
Cons
Opportunity
Type
Time
&
Material
Most
common
Your
firm
maintains
Client
may
begin
to
Any
project
lacking
services
billing
profitably
if
scope
not
include
you
in
key
3ght
defini3on
or
method
for
any
type
increases,
or
the
conversa3ons.
deliverables.
Olen
of
engagement.
scope
isn’t
well
Percep3on
you
are
clients
will
s3ll
want
understood.
always
“on
the
at
least
an
es3mate.
clock”.
Fixed
Bid
Project
Your
firm
commits
to
Client
feels
they
can
If
you
don’t
ac3vely
Good
way
to
earn
a
fixed
price.
Services
budget
a
project,
so
manage
expecta3ons
trust
with
a
new
firms
olen
build
a
they
olen
prefer
this
and
scope
creep,
a
client
on
a
small
20-­‐30%
premium
in
method.
project
can
quickly
project,
or
a
type
of
bid
to
cover
risk.
become
unprofitable.
project
you
do
olen.
Retainer
A
fixed
monthly
or
Improved
cash-­‐flow
Very
few,
except
that
Olen
proposed
aler
quarterly
fee
for
an
visibility
and
resource
you
may
need
to
trust
established
with
ongoing
service
or
planning.
Clients
can
manage
client
ini3al
project,
or
if
campaign.
budget
a
consistent
expecta3ons
so
as
to
you
have
well-­‐
number.
not
let
scope
of
defined
services
and
services
grow.
client
references.
Value-­‐Based
Pricing
a
service
Usually
much
higher
Tougher
to
do
Ongoing
service
or
based
on
gross
margins.
repeatedly
without
campaign
where
replacement
cost
or
significant,
tangible
replacement
cost
percep3on
of
value.
differen3a3on
from
would
be
a
compe3tors.
headcount
or
more.
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14. Poll
Ques3on
#2
• How
do
you
rate
your
service
delivery
process?
1. We’re
just
star3ng
and
don’t
have
a
process
in
place
2. We
have
some
internal
processes,
but
nothing
standardized
3. We
have
clear
internal
processes
for
delivering
our
service,
but
we
don’t
use
them
to
price
or
communicate
our
service
4. We
have
clear
and
communicated
process
that
our
customers
know
and
appreciate,
but
we
don’t
use
it
for
pricing
5. Our
delivery
process
and
method
is
used
both
internally
and
externally
and
is
the
core
of
our
service
1
2
3
4
5
15%
16%
15%
34%
20%
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Marke3ng
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15. A
Vision
for
Service
Pricing
1. Our
services
are
standardized
and
we
deliver
them
effec3vely
and
efficiently.
2. Our
services
are
perceived
as
high
value
by
our
clients
and
experiencing
strong
demand
in
the
marketplace.
3. We
easily
scope
and
price
our
services
profitability
while
delivering
high
levels
of
client
sa3sfac3on.
The problem is that clients want the latest advantage and skills,
resources and methods constantly evolve!
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16. So,
what’s
the
answer?
Service
Model
Solu0on
Services
Project
Services
SoluDon
offerings
that
have
a
defined
Custom
project
services
that
use
scope
and
standardized
pricing.
standard
phasing
and
methods.
A
service
model
helps
you
capture
client
value
and
adapt
to
a
rapidly
changing
marketplace.
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Services
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17. Service
Model
Benefits
Sell
Be;er
Sa0sfy
Clients
Drive
Profitability
ü Clients
gain
ü Be_er
align
ü Teams
work
confidence
in
expecta3ons
more
efficiently
our
ability
to
ü Higher
quality
ü No
reinven3ng
deliver
deliverables
from
the
wheel
ü Demonstrate
consistent
process
ü Greater
reuse
services
and
ü Joint
teams
are
ü Lower
project
approach
clear
on
how
to
risk
ü Can
show
work
together
ü Feedback
loops
sample
for
constant
deliverables
evolu3on
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18. Building
an
effec3ve
Service
Model
• Solu3on
Services
§ Develop
a
services
hierarchy
aligned
with
agency
strategy
Solu3on
level
§ Define
specific
service
components,
scope
pricing
model
and
value
parameters
§ Align
skill
disciplines
to
service
architecture.
• Project
Services
§ Develop
standard
“Work
Architectures”
Engagement
level
§ Define
phase
entrance
/
exit
criteria
pricing
model
§ Develop
standard
ar3facts,
templates,
tools
and
deliverables.
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19. Example
Solu0on
Services
Solu0on
Service
Example
Scope
Parameters
eMail
Marke3ng
Program
ü Number
of
emails
per
month
ü Level
of
crea3ve
ü Number
of
words
ü A-­‐B
tes3ng
ü …
Lead
scoring
model
ü Number
of
lead
types
ü Tool
set
for
lead
scoring
ü Sales-­‐marke3ng
alignment
process
ü MQL
vs
SQL
ü …
Blog
ü Number
of
words
White
Paper/
Premium
ü Technical
depth
Content
ü Graphics
and
visual
design
ü …
Social
Media
ü Number
of
channels
ü Follower
and
engagement
goals
ü Source
of
content
ü Approval
process
and
compliance
ü …
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Marke3ng
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20. Example
Project
Service
Model
1
2
3
4
PHASE ENVISION BLUEPRINT EXPERIENCE LAUNCH
Develop high-level Conduct analysis Conduct detailed Build, test, and
roadmap, prioritize & requirements visual, functional roll out the system
initiatives, & build gathering and technical
business case necessary for design
detailed design
BENEFITS Clearly defined—and Well-defined scope of Well-defined scope of Well-tested, production-
prioritized—initiative(s) functionality to design functionality to build ready, documented
system
Multi-phase roadmap Understanding of the Well understood—and
problem domain validated—design Trained users
Design foundation
KEY Conduct brainstorming Assess current Refine requirements Construct the system
ACTIVITIES workshop situation/capabilities
Design and usability Conduct unit,
Conduct market Understand audiences test features integration, and user-
assessment acceptance testing
Design technical
Conduct prioritization Determine creative architecture Write documentation
workshops (prioritize by strategy
Create prototypes and Plan rollout and
strategic objectives and
Define requirements design explorations transition
technical and operational
feasibilities) Create experience plan Create style guide Rollout system and train
users
Develop economic model Create launch plan
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Marke3ng
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21. Summary
• Services
change
con3nuously,
but
a
service
model
helps
inform
pricing
and
drive
efficiency
in
the
organiza3on
• Incorpora3ng
the
service
model
discussion
during
the
sales
process
improves
client
confidence
and
sets
expecta3ons
• Sa3sfied
clients
with
higher
quality
delivery
drives
client
reten3on
and
share
of
wallet
• Evolve
toward
the
vision
state
with
repeatable
service
delivery
and
facilitate
more
accurate
pricing.
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How
to
Price
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Digital
Marke3ng
Services
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@op3fy

22. Addi3onal
Resources
• Op3fy
Pricing
Blog
Series:
Optify, Inc
§ h_p://www.op3fy.net/digital-­‐marke3ng-­‐agency/new-­‐blog-­‐ 710 2nd Ave, Suite 840
Seattle, WA 98104
series-­‐how-­‐to-­‐price-­‐your-­‐digital-­‐marke3ng-­‐agency-­‐services
1 (206) 388-4234 (phone)
§ h_p://www.op3fy.net/digital-­‐marke3ng-­‐agency/goldilocks-­‐and-­‐ 1 (877) 2-OPTIFY (toll-free)
the-­‐agency-­‐that-­‐posted-­‐its-­‐pricing
1 (206) 787-1410 (fax)
§ h_p://www.op3fy.net/digital-­‐marke3ng-­‐agency/3-­‐ways-­‐digital-­‐
marke3ng-­‐agencies-­‐can-­‐use-­‐pricing-­‐as-­‐a-­‐compe33ve-­‐advantage
Sales: sales@optify.net
Help: support@optify.net
• SEOmoz
SEO
agencies
pricing
study
–
Other Inquiries: info@optify.net
h_p://www.seomoz.org/blog/seo-­‐pricing-­‐costs-­‐of-­‐services
• Op3fy
Demo
–
h_p://www.op3fy.net/demo
• Free
trial
–
h_p://www.op3fy.net/sign-­‐up
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