You are a digital services specialist and have finally taken up the courage to start your own agency. Good thing is that you are an expert in the technical stuff of the job. Bad thing, you haven’t much of a clue on how to price the services you plan to offer. Well, this is okay as nobody is a monopoly of know-how. As it is, money matters are a bit tricky so when you throw in things that are a bit difficult to quantify, the waters get murkier. It really is a delicate balance to value your work versus charge clients what is reasonable. Without further ado, here is a guide you can use to price your digital agency’s work.
How to price different resources
The big question here what resources you are investing. When the resources are identified, it becomes much easier to know what your cost should be.
- Time – when they say “Time is money”, they are absolutely right. This is the most popular way of pricing of your services. The time you spend doing a client’s task can range from hours to months. Many consultants charge hourly. Others include a minimum rate based on their years of experience. Is this a good approach? Yes, it is, if you are performing complex technical work, you have a regular client whose assignments are similar, or if you are a freelancer. If you apply this approach, be sure to do thorough documentation and communication with the client.
- Value – In many cases, a single solution doesn’t solve all different clients’ problems or assignments. Some solutions are worth more to some clients than others. This means one client may be willing to pay more for a valued service than another client. Capitalize on this knowledge of demand to do your pricing. This model works for those who have made a name for themselves and are considered experts.
- Market research – Businesses thrive on market research. Market research can range from customer surveys, research on current trends, the industry to competition, etc. Price this resource based on the complexity of the research. Is it an informal one-on-one survey, an online survey, or an in-depth analysis of voluminous amounts of data? What is the sample size? Such questions should guide you on how to price this service.
Packages and create recurring revenue streams
Providing some of your services as packages can be both advantageous and disadvantageous. Startups who lack experience and may not know the nitty-gritties of say branding a business, may truly appreciate packages offer. So, you are likely to attract those kind of clients. However, it could be bad for you since you will not have negotiating pain points as you have fit all of them in one package.
To create a recurring revenue stream, you need to do a retainer deal. This is workable with large projects that take long periods of time. Here strive to develop a cordial long-term relationship. You can price this by a certain amount of money for specific amount of time per month.
For instance, there are various app development companies India firms, offering retainer packages that include app development and monthly maintenance.
In summary, you need to clearly identify the digital agency services you can perform well and use the above tips to figure out which method works the best for you.
About the Author :
Manoj Rawat, a Growth Hacker, Ideator, Innovator and Experienced SEO, SMM and Marketing Consultant with over 7 years IT experience. He loves to share marketing tips & strategies among online marketers. He is an avid sports person, traveller, explorer & nature lover. You can find Manoj on Quora, LinkedIn and Twitter.