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Are You Afraid To Sell $20,000 A Month Retainer Engagements?

Posted by Mike Lieberman on Jan 31, 2018 7:49:00 AM

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Selling larger inbound retainer clientsI hear this all the time. I can’t charge what I want because…fill in the blank here. “We’re too new,”  “We’re too small,” “Our customers are too little,” “They can’t afford a bigger retainer,” “We’re not good enough yet,” “We’re trying to win the business,” “We’re not a Diamond Partner yet” or “We’re not Square 2 Marketing.” It’s all bullshit, honestly. You don’t have to be any of these things to get paid true value for the services you’re providing your clients.

I’m speaking from personal experience. You might not know this about us, but we used to be just like you. Much smaller, hungry for new clients and much less certain about our abilities to produce big time results for our clients. We used to sell $3,000-a-month engagements. We sold these for years and signed up a lot of new clients at that level. But we quickly learned these were click crack, a fast track to unprofitable, unhappy clients and a team of unhappy people servicing these unhappy clients. It was dark times for Square 2 Marketing.

But we learned a lot through those experiences and what we learned was that the clients are happy to pay it, if you ask for it, if you provide the right services, if you hire the right people and if you position your agency correctly.

Here’s how you can sell $20,000-a-month engagements too.

Understand the True, Long-Term ROI Of What You’re Doing

This is huge. You’re not selling websites, content, blog articles or email campaigns anymore. I think that’s one of the biggest hurdles facing the inbound agency owner community. If you were selling “stuff” then your approach to pricing is right on. How much stuff do you want? Here’s the price.

But you’re not selling stuff. You’re selling your prospects’ lead generation and in some cases revenue generation. You’re actually going to build them a lead generation or revenue generation machine that will run and run and run and run—whether you’re with them or not. What is that worth? Is that worth more than a few thousand a month? I think so.

In most cases, you’re teaching them an entirely new way to generate a sustainable and ongoing flow of leads.  This is something they have never had before in their businesses. In other cases, you’re teaching them a new way to sell and if you’re doing it right, you're teaching them a new way to generate leads, close those leads and better predict revenue for their company. It’s kind of like the holy grail of business. People have been searching for this secret for years and you have it. What is that worth?

You should ask your prospects, “What would you pay for a predictable, scalable, repeatable lead generation machine?” Every month, it just works to generate leads.  It works month after month, never taking a break or a vacation. What is that worth to your business? What would you pay for that machine? $1 million dollars? $5 million dollars? Probably, but good news - I’m going to do it for you for just $240,000 over the next 12 months. When would you like me to get started?

Small Clients Take Just As Much Time (or more) Than Large Clients

Small clients take just as mnuch time as big clients.A lot of agency owners who I talk to think two things about small businesses. One, there are more small companies out there, so we need to have pricing that appeals to the mass market. False! Yes, there are more small businesses than mid-market and enterprise companies. But you don’t need 500 customers to be successful, you just need 50. Which means there are plenty of slightly bigger businesses that can afford a higher retainer.

Second, small companies are going to be harder to work with and cost more to service than bigger businesses and the $3,000 they’re paying you feels like $20,000 to them. They’re going to expect big results for their little retainer and they won’t care how much work it’s taking you to deliver those results because you promised them results. A lot of smaller companies have never worked with an agency of any kind before, so you now have to teach them what that’s like, what you expect and how to work with you. Smaller companies have a tendency to change their mind frequently, making it difficult for your marketing work to gain traction. Do I have to go on?

In the end, bigger businesses will pay you more, be easier to work with, and allow you to do more of what you want to do to get them the results they expect.

Realize What Prospects Are Asking And The True Work Involved In Delivering

When a prospect comes to you and says, “We’re doing $1 million now and we want to do $2 million next year.” You have to ask the hard questions to understand what’s buried in that statement. Here are some of those questions.

  1. How much of first $1 million is booked already and how much will have to be replaced? This tells you the true goal.
  2. How much money have you budgeted for your marketing to do a 100% increase in revenue? Most smaller businesses pull revenue goals out of the blue and have no correlation between their investment and that goal.
  3. How much is your current average revenue per new customers? This helps you know how many new clients you have to generate for them, how many leads and how many inquiries.
  4. What does your sales team look like? How many do you have? What is their close rate? This gives you some indication of how the sales team will do with your new leads.
  5. How many visitors are you getting to your website right now? This tells you how much needle moving you’re going to have to do.
  6. What is your timing and expectations around our ability to start generating leads and new customers?

Most of the time, the answers to these questions uncover a ton of required work on your part. It’s an indicator that they need a lot of help and might have to wait months before they see a real return in terms of leads and new customers. If you’re engagement does NOT take into consideration all the work required—again, you’re on the fast track to getting fired. You might win it with a low retainer, but you won’t keep it for long and you’ll have an unhappy ex-client telling everyone you suck. You’d be better to pass.

Create A Flexible Engagement Model

Inbound agencies typically offer new clients a 12-month engagement with a fixed fee retainer. This locks you into a certain level of revenue but also (or at least it should if you’re executing correctly) locks you into a service level, meaning you can only do so much. By creating a flexible retainer that moves with the desires of your clients, you can start slower and as you gain traction and trust, have your client increase their investment with you over time.

This works wonderfully for clients who are nervous about getting started, but after a couple of months enjoy working with you, see your early results, want to move faster and are comfortable with bigger investments.

This also helps when you recommend one level to start, but the prospects ask for a lower level. After a few months of prioritization and discussion about limits on what you can do for that budget, eventually they realize they under bought and want to fix that, buying at the appropriate level to move the needle more quickly and more dramatically. Flexible retainers make this very easy.

Want more tips like this? I offered to present a session at HubSpot’s Partner Day in May. They’re having all of you vote for the sessions you like. If you like the idea of learning how to sell more big engagements, vote for my session by clicking here. I titled it, How To Start Selling $20,000 Retainers, This Month! Anyone can vote. Thanks for the support.

You see, what we learned early on was that it’s just as hard to sell a big engagement as it is to sell a small engagement. And it’s just as hard to service a big engagement as it is to service a small engagement. We also learned that it’s better to have a firm with 10 big clients, then it is to have a firm with 30 little clients. That might seem counterintuitive, but it’s not.

We also learned that the less they spend, the more hand holding they need. Quite often, the $3,000 that a small client is paying is just as important to them as the $10,000 a bigger client is spending. There is no such thing as an easy client and their retainers have no correlation to how easy or hard they’re going to be to work with.

Finally, you need to keep your eye on the prize. That goal is to create as many referenceable clients as possible.

Who wants to work six to nine months with a client only to have them curse you out and fire you? Instead, working with clients who love you, who are happy to be a reference or write a review—that should be your goal. Taking on a small client, telling them you can get them results for $3,000 when you know they should be paying $8,000, because you need that $3,000 to make payroll, might sound like the right move, but it’s the absolute wrong move.

You’d be better off passing on that business and being able to take on the bigger client when they present themselves later—and they will present. If you are not providing enough services to move the needle, you’re going to get fired. No reference. Taking small clients, just to get business is the fast track to being out of business.

Inbound Marketing Agency Growth TipsStart Today Tip – There are a lot of moves you can make today to position you to start selling large engagements. First, increase your price. Like we said above, the true value of what you do is worth more than a few thousand dollars a month. Its strategic, its long-term, it has the potential to be transformational and it’s worth five figures almost every single time. Next, make sure you can accurately assess what NEEDS to be done to get them the results they expect. If you can’t do this, get help from someone like me. This is critical, and this is why I hate packages. Every client is different, every business is different, ever industry, every program. You must be able to assess, in the sales process, and set the investment level properly. But most importantly, just start charging more. Prospects won’t be mad, they’ll be impressed. Don’t discount and don’t budge on price. You’re going to be surprised how much business you win. You can thank me later.

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Topics: inbound Agency Sales Process, larger retainers

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