It’s Probably Your Fault And Any Inbound Marketing Agency Owner Can Change It Today!
I’m not trying to be confrontational. I hear this from a lot of agency owners. They feel like they can’t charge more because they’re competing with other agencies who charge less or their smaller clients can’t afford a larger retainer. Sound familiar?
I’ve even heard some misinformed owners say, “we’re not Square 2 Marketing so we can’t get $10,000 retainers.” That’s total bull shit. What you charge is 100% related to what you think your value is worth. The reality of this situation is those agencies charging too little are not sure they know what they’re doing. They don’t think they’re worth full value.
Want to charge more? Here are some changes to help you with pricing inbound engagements to produce larger retainers and help you feel more confident that what you are charging is fair value for the business results you’re delivering to your clients.
You Have To Be Different
There’s nothing different about being an inbound agency. There was a time when that was interesting and maybe even a little different but with over 3,000 agencies in the HubSpot community alone, those days are over. If you look like all the other agencies competing for the same clients then how do clients choose who to work with? Yes, price! They pick the cheapest option, driving down revenues and profits for all of us.
But if your agency is different, then their chose might be based on that difference and not on price. If that difference is dramatic enough and valued enough, then your pricing is aligned with that value. Short story, the more remarkable, the more you can charge. The more remarkable, the more new clients you’ll sign. The more remarkable you are, the more you’ll grow your agency.
Quantify The Business Value Your Delivering
You’re thinking $15,000 a month is a lot of money. Who can afford that? My clients are small businesses, they could never afford that. But that’s your perception of value NOT your client’s. They each have their own perceptions which of course is their reality. Your job is to help them see that $15,000 is a great value if you're getting them one new client a month worth $200,000 a year. Can you do that?
You must help them understand exactly what they’re asking you to do. They’re asking you to build a marketing machine that finally delivers repeatable, predictable, scalable lead generation for their business. Something they’ve never had before. If you’re doing sales enablement, you’ll be creating a sales process that helps them close more leads and close them faster than ever before. What is that worth? It’s worth a lot more than a few thousand a month.
When you can communicate the true value of what you’re doing and the business impact it has on their business you’ll be able to charge more and grow your business faster and more profitably.
Build A Sales Process That Lets You Shine
In a recent research study, we found that 75% of the people surveyed said it was our sales process that convinced them to choose us over all the other options. How is your sales process? How good is it at making prospects feel safe? How well does it educate and advise? How does it stack up to your competitors and other inbound agencies? You can make upgrades and changes to your sales process today and it will help you close business later this week.
Start by building a process that makes your prospects say “wow” and you need a process that gets your prospects to say, “we have to hire this company.” Whatever it takes to get them to say that—should be your goal when it comes to sales process.
Get Your Clients To Tell Your Story
Prospects don’t typically believe you, but they might believe your clients. You do have an agenda, you want them to hire you and your clients don’t really have an agenda, usually. Getting your clients to help you tell your story is critical to closing more new clients and charging more money.
Would you pay $10,000 a month for an agency whose clients were telling you how amazing they are to work with when compared to $6,000 for an agency with only one or two published case studies. I know the answer already.
People make purchase decisions emotionally and they make purchase decisions ONLY when they feel safe. The safer you make them feel and the better you connect with them emotionally the more they’ll be willing to pay you. For those who don’t value what you do or consider what you do a commoditized service—you have to be willing to walk away from those deals. If every agency passed on these types of clients, they’d change their behavior and we’d all make a lot more money.
Show Your Confidence – Performance Based Agreements
Want to charge more? Then you better sound like you know what you’re talking about. You better be able to stand by your commitments and you better be able to put your money where your mouth is. We’ve been offering performance based agreements at Square 2 for years and the story it tells is very powerful.
In all honestly, a lot of prospects don’t take us up on the idea because the variable payments make them nervous, but they see how sure we are of our own abilities and that warrants more confidence in us and a higher price point. You should do some experimenting with this story line. You might find a similar experience. It lets you charge more without the risk of performance. But it’s a gamble you better be willing to take if they accept your offer.
Bottom line, you’re the reason you don’t charge more. It’s not the local agencies, it’s not your market, it’s not your abilities, it’s not other inbound marketing agencies. It’s all about you. Once you feel like you’re worth $10,000 a month, you’ll start charging $10,000 a month and your business will grow.
I want you to think about your business with five active $10,000 a month engagements for $50,000 a month vs. 10 active $5,000 a month engagements for the same $50,000. Which is easier to execute, manage and run? Which is more profitable? Which is a better agency? Which is a better life for its’ owner? Yes, the first option is much better. Take if from me, I’ve had both.
Making the change is all up to you and your perception of your own agency. Change that today.
Start Today Tip – Ready to jump in with both feet. Here’s what you do. Next time you have a prospect and you’re putting together pricing and the pricing comes out to $7,000 a month, just increase it to $9,800. Keep bumping up your pricing and keep tabs on average MRR per client. You want to proactively drive that number up as high as possible and the only way to do that is to consistently start charging more than the current average MRR per client. By doing that you’ll be forced to justify the investment level, which gets you good at telling that story but it also drives up profitability so you can hire the right number of people and take home a fair salary for you while making a profit that you can reinvest in the company, if you so desire. Simply by charging more you can transform your business. Stop holding yourself back.
Agencies 2 Inbound – Helping You GO ALL IN ON Inbound!