How to Determine The Price For Your Business/Service:
Our price calculator is designed to be simple and easy to use. It covers everything you need to price your marketing agency
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How To Price Your Marketing Agency
One of the most challenging aspects to starting a marketing agency is determining how much to charge for your marketing agency.
When businesses under-price their product, this can be extremely detrimental to their bottom line and reputation.
Often times, businesses under-price their products to drive demand and volume, but that last thing you want is for customers to view your product/service as "cheap." Additionally, this can have a big impact on the type of customer you attract, which can be difficult to recover from.
On the other hand, when businesses over-price, this tends to be just as damaging to the business.
When customers buy, it's likely that they will explore the internet and look at other competitors to ensure they're getting the best value + deal. This is why it's so important that you research your competition and understand where you land in the marketplace.
Here are some factors to consider when pricing your product:
Understand your customer
It's important that out of the gates, you identify the type of customer you want to attract and how much they're willing to pay for your service. One great way to do this is by surveying your customers. Here are some important items you'll want to takeaway:
- Customer demographic: Age, gender, location, etc.
- Buying habits of your customer: What they buy + when they buy
- Level of price sensitivity with your customer
All of these segments will help you identify the type of customer you're attracting and how to price your product accordingly.
Understand your costs
When pricing your marketing agency, it's critical that you first identify all of your costs and consequently mark up your marketing agency so you can factor in a profit.
The actual cost of your marketing agency may include things like:
- The actual cost to make the product (ie. raw materials, supplies, manufacturer).
- Shipping + overhead fees
- Operating costs to run your business
You may want to consider creating a spreadsheet with every single expense involved in operating/owning your business. This will give you an idea as to what you need to generate in order to at the very least, break-even and will help you price your products to factor in a profit.
Create revenue goals
When determining the price of your marketing agency, you'll want to create goals for revenue + how much profit you want your marketing agency to make.
This process is simpler than you may think:
- Think about your breakeven cost (by completing the above step).
- Create a revenue goal based on your break-even cost
- Evaluate the # of items you plan to sell in a given period (make sure this is a realistic number)
- Divide your revenue goal by the number of items you plan to sell
This figure will help determine your estimated price per product in order to meet your revenue goals.
Evaluate your competition
The last piece in determining how to price your marketing agency is by simply looking at your competition.
The best way to do this is by finding like-minded businesses that offer product(s) with similar perceived value. Then, you can compare prices of the different businesses and determine where your marketing agency fits best in the marketplace.
All of these factors play an equal part in pricing your marketing agency, so it's important you evaluate each one individually to come up with an accurate price that will help optimize your business from the start.
More Tips On Pricing Your Marketing Agency
Lauren Costanza, founder of Bluminary provides us with a detailed spreadsheet of all of her costs associated with running her business:
I knew this would be a self-funded adventure, and I set aside $3,000. During the first three months, I had a detailed spreadsheet where I tracked where the money was going and what was going toward products versus researching and developing new products.
The spreadsheets involved columns and rows of numbers to craft a budget and gain an understanding of how much would need to be invested at each stage of the process - from gathering supplies to building a website, and shipping materials.
Thanks for reading. We wish you success in your business endeavors.
Examples of a successful marketing agency
8. Madwire ($102M/year)
JB Kellogg (from Fort Collins, Colorado, USA) started Madwire over 13 years ago.
Hi, I'm JB Kellogg and I'm the Co-Founder & Co-CEO of Madwire®. I co-founded Madwire with my Dad when I was 28 years old and grew it from just the two of us, in a tiny little office, to over five hundred people and a hundred million dollars in annual revenue in under 10 years. I guess that's pretty rare to achieve, so they call companies like that "rocketship companies".
In between all the "madness" and spending precious time with my amazing wife and kids, I enjoy sharing tips and lessons I've learned over the years with regards to marketing, leadership, and more across my social media channels. Why do I do this? Because a lesson learned should be a lesson shared. If I can help just one person, I've increased my radius of impact while at the same time helping someone else increase theirs.
9. Visiture ($10.8M/year)
Brian Cohen (from Charleston, South Carolina, USA) started Visiture over 14 years ago.
Hello, my name is Brian Cohen and I’m the Co-Founder and CEO of Visiture.
In addition, our monthly revenue and profit exceed what our entire revenue was in 2015. Our MRR is approaching $1MM. It’s been a tough road to get here, but we’re going to leverage our momentum and plan to double the company annually for the next 2-3 years.
10. TribalVision ($8.4M/year)
Chris Ciunci (from Boston, Massachusetts, USA) started TribalVision almost 13 years ago.
My name is Chris Ciunci and I’m the Founder and Managing Partner of TribalVision. We are an outsourced marketing department for hire, dedicated to helping organizations grow. We do this by first crafting an overall marketing strategy tailored to the client’s specific needs. From there, we execute that strategy tactically, acting as our clients’ marketing team and keeping their best marketing interests in mind. Digital marketing tactics that we implement include; Google Ads, SEO, retargeting, social media marketing, email marketing, account-based marketing, and more.
Since 2010, we’ve served a variety of industries, including manufacturers, professional service firms, non-profits, startups, and a myriad of B2C organizations. Our Google reviews speak to the caliber of work we provide and reflect our rapid growth trajectory over the past decade. We’ve been listed as an Inc. 5000 Fastest Growing Company on multiple occasions and are also frequently recognized as the Best Place to Work in the Boston and Rhode Island markets.
11. DSM ($6.19M/year)
Darren Magarro (from Mahwah, New Jersey, USA) started DSM over 15 years ago.
Morning all, my name is Darren Magarro and I am the founder and president of DSM. We’re a full-service marketing and PR firm in Mahwah, NJ.
Our three main digital media (both organic and paid), traditional media and our full-service creative team. DSM has been a passion project that literally started from nothing. When I started, I had no clients or income. Everything that we’ve made has gone back into growing the company to where it is today. To understand the trajectory of our growth, we’ve increased the size of the company by 334% since 2014...and we still have 2 months left in 2019.
12. Jakt ($3.6M/year)
Anthony Tumbiolo (from New York, New York, USA) started Jakt over 10 years ago.
I am Anthony Tumbiolo, the founder of Jakt–a digital product and innovation studio based in NYC.
I am also the moderator of ServiceBasedBusinesses.com, a private community for agency owners and the creator of FinanceForAgencies.com, a course that teaches agency owners the exact financial system used to help us achieve those nice profit margins in 2018.
13. Impressions Agency ($1.2M/year)
Travis Richardson (from Denver, Colorado, USA) started *Impressions Agency * over 9 years ago.
Our product offerings include everything from SEO strategy and implementation, building significant sales funnels, building paid marketing channels, branding and brand management, web development, and more. Since our primary clients are small business owners their identities are changing year in and year out. Our goal is to be nimble alongside our clients so we can help them overcome their marketing hurdles as they are growing their companies. We have since grown into a healthy, prosperous company with a mobile team that spans around the globe.
14. Never Settle ($1.8M/year)
Kenn Kelly (from Denver, Colorado, USA) started Never Settle over 10 years ago.
Hello, I’m Kenn Kelly and co-found Never Settle with two dear friends Andrew Lundquist and Shaul Hagen. Never Settle is a Digital Agency where relationships with our customers come first - after all, they are everything in our business. Although small, we’ve been globally recognized as a leader in mobile, website & marketing solutions.
In seven years, our team has now built over 1,000 business sites and apps to which we’re seeing momentum pick up even more. With that kind of volume, our team can leverage that experience for our current and future clients providing even more value. Our growth is consistent and moderate, which falls right in line with our focus on being a ‘legacy based’ company, not a high growth one. Our goal is to take care of our people, create sustainable value, and be a company that is around for decades to come. High growth comes with a different focus and different result, neither is better than the other we just felt this was the best path for our team. The team is everything at Never Settle and below are just a few of our guys having a good time together.
15. Half a Bubble Out ($1.18M/year)
Kathryn & Michael Redman (from Chico, California, USA) started Half a Bubble Out over 20 years ago.
Hi there! We’re Michael and Kathryn Redman. We started a company eighteen years ago called Half A Bubble Out, which is a full-service marketing and advertising agency based in Chico, California. We’ve helped business leaders around the world grow their companies through traditional and digital marketing, business coaching, and leadership development. We’ve made millions of dollars for our clients across industries such as property management, medical, agriculture, and various nonprofits.
And if you’re wondering about our name, Half a Bubble Out is a metaphor from the carpenter’s level. When something is slightly out of level, the “bubble” becomes “half-out.” We view this two ways. First, half a bubble that is “out” reminds us to look at our clients and their challenges with a fresh perspective and not through the same old grid. The half a bubble that’s “in” represents the need to maintain a strong foundation in the quality and skills of our craft as marketing and business consultants.
16. Prodigi ($1.56M/year)
Aida Vopyan (from Yerevan, Armenia) started Prodigi about 5 years ago.
Hi there, I'm Aida, and I'm CEO & Co-Founder at ProDigi. Let me tell you our story.
17. Dream Client Academy ($1.2M/year)
Alex Albarran (from Hollywood, Florida, USA) started Dream Client Academy almost 5 years ago.
Hey everyone ! My name is Alex Albarran and I’m the founder of Dream Client Academy . We’re a consulting & marketing firm based in Hollywood, Florida. I launched the company when I was 19 years old and working on my undergraduate degree.
I’ve been the only full-time member of the company up to this point (with part-time contractors). Moving into 2020, I’ll be pushing to scale DCA to high 6-figures in yearly revenue, improve our client-retention, build out our social proof base, while adding full-time members to the team so I can leverage my time and accelerate our growth.
18. Nomads with Solutions ($240K/year)
Michael Gardiner (from Stuart, Florida, USA) started Nomads with Solutions almost 7 years ago.
My name is Michael Gardiner, and I am a 20 years old digital nomad and serial entrepreneur born in Stuart, Florida. I have been an entrepreneur since the age of 15 when I started my first business.
I have been able to leverage this business to meet incredibly successful people, travel full time to over 20 countries (+10~ independent territories) by the age of 20, and build myself a multiyear safety net. I can safely say, starting young in business was the best decision of my life.
19. Tao Digital Marketing ($540K/year)
Matt Tomkin (from Bolton, England, United Kingdom) started Tao Digital Marketing over 5 years ago.
Hey, I’m Matt Tomkin and I started Tao Digital Marketing. We’re a search engine marketing specialist agency based in Bolton, UK.
We’re now turning over £12-15k per month and this is growing rapidly with a team of 4. We’ve been working with our largest client now for over 12 months but have lost very few clients in the 2 years since birth!
20. Kairos Digital ($420K/year)
Stephen Freeman (from Jacksonville, Florida, USA) started Kairos Digital about 3 years ago.
After working at a marketing agency for many years, my brother and I decided to launch our own agency, specializing in clear messaging for businesses. I became the first StoryBrand Certified guide in my city and we started providing services for companies who wanted to clarify their brand message, launch websites that converted at a higher rate, and create marketing campaigns that had a strong ROI.
We closed out 2020 with over $230,000 in sales (during the pandemic) and are looking forward to continued growth in the coming years.
21. Maverick Media Lab ($120K/year)
Gilberto Rosas (from Los Angeles, CA, USA) started Maverick Media Lab almost 5 years ago.
Hi everyone! My name is Gilberto. I’m based out of Los Angeles and I am the founder of Maverick Media Lab. I started the company to make an impact and provide businesses with innovative online marketing systems that generate growth and more profitability.
At the time of this interview, we’re currently at $10k/month at the time and projected to double that in the next 6 months from our advertising campaigns. We’ll be building out a sales time, hiring more virtual assistants, and pushing for multiple six figures in 2021.
22. Tribecto Automations ($120K/year)
Sam Wilcox (from England, United Kingdom) started Tribecto Automations about 4 years ago.
Hey! I’m Sam Wilcox and my startup is called Tribecto Automations. Our core services are email marketing automation, custom CRM setup and custom integrations build for service-based businesses. We focus mainly on the sales and marketing side of things to help our clients nurture leads, book more meetings and make more sales.
I work out of a super cool co-working space called Works Social in Nottingham UK, which I love…
23. Kreatix ($120K/year)
Oliver Op de Beeck (from Lier, Flanders, Belgium) started Kreatix ago.
Hi, my name is Oliver Op de Beeck, I'm 22 years old, and I started Kreatix with my co-founder William Matthynssens.
Today, we’re servicing more than 150 clients with 15 more in the pipeline right now. We each bill about 55 hours a week, but we are always working.
24. Smart Yeti Creative Agency ($96K/year)
Jeremy Kanne (from Chicago, Illinois, USA) started Smart Yeti Creative Agency over 7 years ago.
Hello! My name’s Jeremy Kanne and I founded Smart Yeti, a creative agency that helps technical companies in their messaging and marketing.
We’re still small and focused on exceptional quality in service, regularly taking in $8k/mo, but growing in revenues on average $1-2k/mo in 2019. This is thanks to technical companies loving that we speak their language.
25. Draft.dev ($1.08M/year)
Karl Hughes (from Chicago, IL, USA) started Draft.dev over 2 years ago.
My name is Karl, and I’m the founder of Draft. After almost a decade leading engineering teams at venture-funded startups, I decided it was time to leap into entrepreneurship. Draft is a productized service that provides technical content to software engineering blogs on a subscription basis.
August is my third month running the business and first month full-time, and I’m on track to bring in $10,000 in (mostly) recurring revenue this month. The business isn’t going to replace my salary as a CTO right away, but the freedom of running my own business has given me a lot of freedom to stretch my creative muscles and spend time with my family.
26. Entrepreneur Business Blog ($120K/year)
Emenike Emmanuel (from Lagos, Lagos, Nigeria) started Entrepreneur Business Blog about 6 years ago.
My parents told me that my name is Emenike Emmanuel. I’m the CEO of Entrepreneur Business Blog. In 2018, I was recognized as one of the top 100 social media marketing influencer to follow in 2019.
Currently, EntrepreneurBusinessBlog.com generates a monthly revenue of $1,500+ from those income sources I listed above.
27. Bryn Elizabeth Co. ($15.6K/year)
Bryn Elizabeth Bonino (from Austin, Texas, USA) started Bryn Elizabeth Co. about 3 years ago.
Hi guys! I’m Bryn Bonino and I founded the Bryn Elizabeth Co. I help micro-businesses connect with their ideal clients. My main goal is to help small and creative service businesses get set up with a digital system that will make the most of their ad spend and get the most distance out of their organic marketing efforts.
I recently shifted from working as a tactic-based hourly consultant to someone who offers entire packages to help my clients meet their business goals. Since this shift, I have been averaging $1,300 per month and I have a lot more flexibility to spend on marketing my business. Other positive signs that I’m headed in the right direction are that my email list and social media analytics are growing. I also have an increasing number of people booking discovery calls with me.
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