How to price a package that is high value, reasonable price, and profitable for us if outsourcing

23 replies
Phew...that subject line was a mouth full!

Anyway, what's up Offline Super Troupers!

OK, so I know we've had the "what services to offer and at what prices" threads before....but I wondered who is up for a bit of brainstorming.

I think it is fair to say that if you list services like SEO, PPC management, Facebook marketing (etc), along with a list of prices, then you are setting yourself up as a commodity -->>>>people are going to price shop....

So, it probably (possibly?) makes more sense to have a package which encompasses some of the above and simply call it a marketing campaign (with a slightly fancy name).

Now, while it's ok to maybe charge £150 for FB, £150-£200 for email marketing and so on, there comes a point when you may have 10-20 clients, and it would all become to much work, so you have to oursource the individual jobs.

So, my question is, what are people charging here for combined solutions, which allows them to outsource, make a profit, and of course offer real results to their clients.

Or.....is it better to only concentrate on two or three activities that produce the best results, ie setting up JVs and email marketing.

Well, would love to hear your thoughts. It is often interesting to see what people over the pond charge compared to the UK, or Australia....or anywhere in the world in fact.

Cheers
Phil
#high #outsourcing #package #price #profitable #reasonable
  • Profile picture of the author Voasi
    Services are just tools to the result: Sales.

    Don't sell services as packages, sell the end result. Sell them on what they're going to get with your packaged marketing plan: More Leads... More Revenue.

    If you can break it down for them, meaning how many leads you can generate, what an "approximation" on what their conversions would and how much money they'll make with your marketing plan, that's what they'll want to see.

    I created something like this for SEO that you can download:

    https://www.facebook.com/photo.php?v=10200713453413547

    By showing them what you can do for them and how much money you will generate for them, you take yourself out of the "commodity" business and you're someone that provides them results, rather then just a service they can price-shop.
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    • Profile picture of the author phil.wheatley
      Originally Posted by Voasi View Post

      Services are just tools to the result: Sales.

      Don't sell services as packages, sell the end result. Sell them on what they're going to get with your packaged marketing plan: More Leads... More Revenue.

      If you can break it down for them, meaning how many leads you can generate, what an "approximation" on what their conversions would and how much money they'll make with your marketing plan, that's what they'll want to see.

      I created something like this for SEO that you can download:

      https://www.facebook.com/photo.php?v=10200713453413547

      By showing them what you can do for them and how much money you will generate for them, you take yourself out of the "commodity" business and you're someone that provides them results, rather then just a service they can price-shop.
      Hey Voasi

      Thanks very much for your thoughts and the video you showed is great also. I think companies get bombarded with people selling SEO instead of explaining how this will translate into sales. I assume then when you are selling to clients, you don't call it SEO? I see you have an SEO link in your sig file, but I assume that's because people on a marketing forum already know what the purpose of SEO along with the benefits.

      Cheers
      Phil
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    • Profile picture of the author maverick8
      Originally Posted by Voasi View Post

      Services are just tools to the result: Sales.

      Don't sell services as packages, sell the end result. Sell them on what they're going to get with your packaged marketing plan: More Leads... More Revenue.

      If you can break it down for them, meaning how many leads you can generate, what an "approximation" on what their conversions would and how much money they'll make with your marketing plan, that's what they'll want to see.

      I created something like this for SEO that you can download:

      https://www.facebook.com/photo.php?v=10200713453413547

      By showing them what you can do for them and how much money you will generate for them, you take yourself out of the "commodity" business and you're someone that provides them results, rather then just a service they can price-shop.
      I have a slight issue/question with this spreadsheet. Your conversion rate is 2% how do you come to that figure being the conversion rate of traffic to sales? sometime the conversion of a website is an inquiry, then there is a sales process.

      What your spreadsheet is actually displaying is value of leads. Though i maybe wrong.

      P.S this may sound like a negative post but i mean this in a positive way. Also i did watch the video due to time.
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      • Profile picture of the author Voasi
        Originally Posted by maverick8 View Post

        I have a slight issue/question with this spreadsheet. Your conversion rate is 2% how do you come to that figure being the conversion rate of traffic to sales? sometime the conversion of a website is an inquiry, then there is a sales process.

        What your spreadsheet is actually displaying is value of leads. Though i maybe wrong.

        P.S this may sound like a negative post but i mean this in a positive way. Also i did watch the video due to time.
        I didn't take in negative

        You may want to add another column for website conversion rate. I keep it a little more simple with just the one conversion column.

        Either way, you'll want to get the conversion rate (from a sales perspective) from the client - only he will be able to provide you that data. Try and get him/them to interact with this process as much as possible, so the really SEE what high rankings in Google can mean to them.
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        • Profile picture of the author maverick8
          Originally Posted by Voasi View Post

          I didn't take in negative

          You may want to add another column for website conversion rate. I keep it a little more simple with just the one conversion column.

          Either way, you'll want to get the conversion rate (from a sales perspective) from the client - only he will be able to provide you that data. Try and get him/them to interact with this process as much as possible, so the really SEE what high rankings in Google can mean to them.
          You say get data lol. I find that to be hardest part. 80% of my clients of not more do not know the lifetime value of their clients. It is insane that people are unaware of their own business.
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          • Profile picture of the author Voasi
            Originally Posted by maverick8 View Post

            You say get data lol. I find that to be hardest part. 80% of my clients of not more do not know the lifetime value of their clients. It is insane that people are unaware of their own business.
            They never do. It's your job to help them figure that out as well. This is all part of my philosophy on RAPPORT BUILDING.

            I don't try and sell them what I have, I let them tell me what they need - and I typically do that by engaging them in there business, getting them to chat my ear off, continue to ask questions to "open them up" and eventually they'll tell you all the crap that's going on in their business - then you just fill the wholes with our services.

            The excelsheet is more for business owners that don't see the value of SEO.
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  • Profile picture of the author kemdev
    I've had more success bundling 'packages' to help clients get better results. As Voasi said, it's all about leads and sales.

    All of my sales involve a website redesign. The smallest average is ~$1,500 which includes Google+, Yahoo Local, Bing Local, 30+ citations and mobile version of the site. Lately, I've been charging $3-4,000 for clients who want more leads. This package includes everything from the standard package, plus articles for the site plus distribution, social media outlets, Adwords set-up and maintenance, up to 8 city-based keywords, videos plus distribution, and any links I feel may be necessary to achieve rankings.

    Selling any one of those services as standalone products is very difficult. But wrapped together as a lead-generation package? It's less confusing for the prospect, easier for me to deliver what they want (sales), and a hell of a lot more profitable for me.
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    • Profile picture of the author DaniMc
      I think it's important to remember that the business owners we are talking to really don't care about what we offer. They couldn't possibly care any less about us, our services, our bills, or our sanity. And they shouldn't. They are worried about those things for themselves.

      Our job, as marketers, is to take the things they worry about, and provide service that actually HELPS them take care of those things.

      If you don't genuinely care about the business and the person who runs it, in my opinion you will struggle.

      Nothing about this business can be viewed as a "pump n dump" operation. We are in the people business.

      That said, I've found the saying "if all you have is a hammer, everything looks like a nail" is definitely true.

      If all you sell is Facebook marketing, then you will be stuck trying to offer that in every situation, even if it isn't right for the client. This leads to frustration in your campaigns and anger from your clients. Not to mention people will price shop and you will be forced to compete on price.

      This is all a recipe for misery.

      A far less stressful option is to become pretty good at a range of things, so you can analyze the business, their value prop, the demographic, their product, and diagnose accurately where they need help.

      At this point, you can craft a strategy that is truly helpful and charge a very good price for it. This is important. You need a higher profit margin to really deliver for the client.

      The business owner is in a conundrum - they have a huge range of marketing options and are somehow supposed to know what to spend money on and how much on each. If you just sell one or two options, you only fall into their range of choices.

      If you have expertise in the entire range, you take the pressure off. They can just let you help them.

      Now, you can do this as the lone-operator, but I don't think it is the optimum situation.

      If you team up with other people and have multiple co-founders you can leverage each other's time and strengths to grow quickly.

      It is really hard, damn hard, to do the selling, the outsourcing, the budgeting, the networking, the management, and everything else. The best thing I ever did was look for a co founder - they are out there and it can be very, very helpful.

      At this point, you can basically split your market up into a few categories and target the right kinds of clients.

      New businesses with no money.
      New businesses with money.
      Established businesses with no money.
      Established businesses with money.

      Guess who you should go after?

      Criteria #1 is - Can they afford me? If they have no cash or are struggling/desperate - walk away. Lay out your price and don't compromise. Even if they can pay, if they are desperate, leave it alone.

      This is where having multiple founders really helps. Find someone who is NOT like you. You really need two main categories of people - sellers and managers.

      In my current situation - I can sell OK, but not great. I found someone who can sell like a maniac. I don't know how he does it. He is "out there" going nuts and people love him and he brings the money. He is weak in the management/operations aspect - that is where I shine.

      Since we teamed up it has been awesome. We are building a truly dynamic agency. We charge in the top tier of any agency for the services we offer. In one of our services, we are truly at the top of the game globally. There just isn't anyone else out there who can do what we do, has the expertise we have, and has the recognition we have.

      This is a very, very powerful position to be in. We have a killer USP. You can have a killer USP too. Anyone can do it. Work, learn, execute, sell, push. Because of our USP we attract new startups that are well financed or existing companies who are launching new products.

      And guess what? We have NO WEBSITE at all! LOL

      I guess in summary -

      Find a good co-founder with skills that compliment yours. Build relationships with other providers who will perform services that are not central to your offerings. The optimal number of founders for successful companies is 2.3. Some people can do the "lone wolf" business, but for most of us it is a myth.

      Become knowledgeable (as an agency) in a range of services. Build your expertise to the point where you can really analyze a business and offer comprehensive solutions.

      Go after people with cash who can pay well for your service. Deliver on a large scale.

      Craft a killer USP. Look at the trends and where marketing is going, become the best in the world at "X" and carve out a niche. Start telling everyone that you are the best at it. Whoever is doing the selling should be finding more and more venues to speak and teach people about their expertise. In our company, I have built a wall around my other founder, the seller. I keep him out of everything as much as possible. I want him making videos, making calls, doing webinars, finding places to speak, travelling to conferences etc...this is how we keep him closing big deals.

      As far as pricing - now our minimum engagement is $10k. You cannot engage with our agency unless you can start at $10k. That is our consulting/management fee only. You must pay the costs for advertising/design and other such things yourself. Our main product is $15k.

      You can do this. Everyone starts at square zero. Just keep moving and never give up. Never, ever, ever, give up on yourself.
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      • Profile picture of the author ewenmack
        Originally Posted by Dan McCoy View Post


        And guess what? We have NO WEBSITE at all! LOL
        Thank you!

        I'm not the only one here saying you don't need a website.

        But what the hell do we know!

        Best,
        Ewen
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      • Profile picture of the author phil.wheatley
        Originally Posted by Dan McCoy View Post


        I guess in summary -

        Find a good co-founder with skills that compliment yours. Build relationships with other providers who will perform services that are not central to your offerings. The optimal number of founders for successful companies is 2.3. Some people can do the "lone wolf" business, but for most of us it is a myth.
        Dan.....Dan Dan Dan

        Such an awesome post! Thanks for your wonderful insight. You said that the "optimal number of founders for successful companies is 2.3", was that supposed to be 2-3, or 23, or was it actually 2.3 (as in an average).

        You are so right, I've done this thing for too long as an individual, I will now look to form either a partnership or a small group. Do you need a UK representative?

        I love the fact you don't even have a site, I guess because it is YOU you are selling and what you can achive for the client, opposed to how cool your site looks. Those prices you are charging are amazing, and a great demonstration of what can be achieved when having the right mindset. You've really given me a lot to think about and have changed how I look at things from here on.

        Many, many thanks
        Phil
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      • Profile picture of the author mojo1
        Originally Posted by Dan McCoy View Post


        If all you sell is Facebook marketing, then you will be stuck trying to offer that in every situation, even if it isn't right for the client.
        This reminded me of a hilarious skit by Cedric the Entertainer. The Cafeteria lady serves one thing and one thing only.

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  • Profile picture of the author Jason Kanigan
    Not everybody price shops.

    And actually, people only price shop when:

    * they aren't properly qualified by you

    * you don't demonstrate a thorough understanding of their problem

    * you believe, deep down, that it's OK for them to price shop.



    Let's look at these in a bit more detail. First, though, note the common denominator: YOU. Most of this is going on inside your head--not the prospect's.

    You should not be trying to sell to everyone. In your OP you are already well along Commodity Road. What are other people charging? What will appeal to the most people?

    Who cares?

    What do YOU want to offer? What problems do YOU want to solve? What money do YOU want to make?

    It may seem difficult to understand now, but those are actually the questions you need to ask yourself--not other people.

    Secret: There is a market for everything.

    Look at how many niche magazines (or ezines) there are! I haven't gone looking, but I bet there's something for Appliance Porn! and Inner Ear Study of Canaries for Vets!

    My point is that there is a market for you offering those services at $20/hr, and also $2,000/hr. Or $500/month or $50,000/month. The SAME services. It's not a factor of "what everyone else is doing"; it's a factor of how you think about yourself.

    So think, then Qualify. Get rid of the people you should not be talking to. You don't want the $20/hr or $500/month guys. You're not interested in them. Spend your energy on the people who can pay you what you feel you deserve. They are out there. You may have blinders on from playing in the little leagues. "I can't see them!" "Where are you looking for them?" "Craigslist!" Uh huh.

    People who fit your target market won't price shop--unless you let them.

    Qualify first. Sell later.



    Then you have to show the qualified prospects that you understand their problem or situation. Good news: you can do this AS you qualify them.

    Part of qualification is checking for Budget. Can they pay you what you want? Well this is a function of two things:

    1) is there a problem LARGE ENOUGH to deserve your services?

    2) can the prospect actually pay that amount?

    The way to find out is called Monetizing The Problem. I GIVE this method away in my 3,000th post:

    http://www.warriorforum.com/offline-...uch-again.html

    When you get a prospect to admit they have a $1,000,000 problem, it's easy to get them to spend $50,000 on fixing it, isn't it?

    And when you have a prospect discover that they have a $20,000 problem, it's not worth your time, because to solve it you're only going to make $1,000 - $5,000 and it's probably not worth it. Is it. Now You Know.

    By demonstrating you fully understand their problem--which others will not do because they are so busy falling over themselves to explain some feature or benefit of their product or service INSTEAD OF finding out what is really going on in the prospect's world--you will gain that position of preeminence Jay Abraham and others talk about. No one will look or sound like you. And since you QUALIFIED your prospect so well, you know they value your solution, have a problem big enough that it's worth you fixing it, and can actually pay you.

    Lastly, we have the common bugbear of Head Trash. Yes. Head Trash: "I believe it's OK for my prospects to shop around. ...after all, I do." Nonsense!! I don't want my prospects shopping around at all. I KNOW, deep down, utterly KNOW that my solution is THE BEST they can find. Why? Because I qualified the heck out of them and they survived as a prospect. Otherwise, they'd have been qualified Out. Why on Earth would they want to shop around? The greatest, most effective, best solution for their problem is right here. If what I offered wasn't the best solution, we wouldn't be talking anymore.

    Junk that head trash. If someone says to you, "I want to check around," straight-out ask them "Why?!" with a ton of surprise. You may uncover that you missed something in the qualification process. You may find something you can fix right then and there: "Why?!" (look of surprise and a bit of hurt) "Well I wanted to see if it comes in blue." "Huh? Do you want it in blue?" (Porcupine!) "Yeah." Well you never asked me that!

    That's a simplistic run-through but you get the picture.

    Prospects only shop around IF YOU LET THEM.

    Purchases are NOT dependent on price.

    Your phrases of "it's OK to maybe charge" are demonstrating your head trash about pricing, qualifying and self-value of your own services. Identify this head trash. Take it out into the light. Let it melt away as the silly junk it is. Your prospects do not believe what you believe.
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    • Profile picture of the author phil.wheatley
      Originally Posted by Jason Kanigan View Post



      The way to find out is called Monetizing The Problem. I GIVE this method away in my 3,000th post:

      http://www.warriorforum.com/offline-...uch-again.html

      When you get a prospect to admit they have a $1,000,000 problem, it's easy to get them to spend $50,000 on fixing it, isn't it?

      Hi Jason

      Wow, too many great things to mention in your reply. Yeah, I need to get away from that low pricing mentality. I watched your video and it is awesome. Would I be right in assuming that with your current model, you don't charge a monthly retainer, but that total figure charged you mentioned in your video is a one off payment, and then you move onto the next client? By the way, is your business selling sales training to businesses or are you actually doing the kind of offline consultancy and services I've talked about in the thread.

      Many thanks again for such a full reply.

      Cheers
      Phil
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      • Profile picture of the author Jason Kanigan
        Originally Posted by phil.wheatley View Post

        Hi Jason

        Wow, too many great things to mention in your reply. Yeah, I need to get away from that low pricing mentality. I watched your video and it is awesome. Would I be right in assuming that with your current model, you don't charge a monthly retainer, but that total figure charged you mentioned in your video is a one off payment, and then you move onto the next client? By the way, is your business selling sales training to businesses or are you actually doing the kind of offline consultancy and services I've talked about in the thread.

        Many thanks again for such a full reply.

        Cheers
        Phil
        Charge it however you're comfortable doing it. Divide it into monthly payments if it works for you and your client, or get it 50/50, or all at the front. The point is to get THEM to value your solution, rather than you offering some random-sounding price that has no relation to the size of the problem you're solving (which they most likely have never thought of at all). The method also typically results in a higher price than you would feel comfortable mentioning...and it's a great qualifying tool. Too small a problem = too tiny a payment = not a fit.

        I do sales training, copywriting, and occasional web development and video marketing. Most of my sales are one-off, with occasional repeats who come back for other ideas, and that is a hole in my business model that I've been trying to figure out how to fix for the past two years.
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        • Profile picture of the author DaniMc
          Originally Posted by Jason Kanigan View Post

          I do sales training, copywriting, and occasional web development and video marketing. Most of my sales are one-off, with occasional repeats who come back for other ideas, and that is a hole in my business model that I've been trying to figure out how to fix for the past two years.
          This is a bit off-topic but I saw this paragraph - have you considered targeting larger and larger organizations with an ongoing monthly sales training component for a fixed term?

          Like - 5 months of training for $10k. I wouldn't think you would want to do an open-ended engagement because then there will be an eventual awkward parting of ways.

          You could create a 5 step system, teach 1 module per month and really deliver. At the end of the 5 months, you leave them wanting more and very happy.

          The price also dictates that you are only dealing with strong sales teams. Once all that is laid out - you take the show on the road and teach an overview of your 5 steps to as many crowds as possible. Just a thought.
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    • Wow!! This made me realize I need to change the way I go about selling my services AND myself. Forget selling this is good life advice! Dont waste time with potential clients who do not qualify for the service you offer.
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  • Profile picture of the author misterme
    With any costs, outsourced or otherwise, you need to keep your profit margin healthy. But as it affects what rates to charge, clients pay based on perceived value. And the two are not related.
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  • Profile picture of the author mjbmedia
    ^^^^^ Theres Dan pretending he knows what he's talking about again .

    great post Dan, totally agree re the collaboration , get people to fill in for your weak areas, do what you do best, let them do what they do best, as long as someone is selling enough to bring in the money and its not all pissing out the back door due to poor management, its all good.
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  • Profile picture of the author phil.wheatley
    Guys... oh my goodness

    When I posted this today, I had no idea I would get these kind of replies, I am blown away!!

    I will have to be brief as I'm typing this (badly) on my mobile, but I will respond fully tomorrow

    Thanks soooo much guys fir your insight, expertise and your twine.

    Best
    Phil
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    • Profile picture of the author ewenmack
      Here's how to get out of the price and commodization
      trap.

      Go after, for example accounting firms that
      have between 20 and 50 team members
      and want to double that.

      You write up a bait piece about it and
      now those who request it have shown
      they are warm candidates on this specialized
      subject.

      in order to get this, they have to hand over
      their email to download it.

      On the thank you page, you offer a cd and paper
      on the subject which will help him reach his end goal
      easier and faster.

      They just have to pay shipping costs.

      Now they are warmer and you now have a list of buyers
      who you put a offer of a road map to reach the
      desired result.

      Hotter ones are those who pay you a refundable
      $100 as a filter to keep out time vampires.

      Hottest are those who say yes to you implementing
      the plan you had worked through together.

      Prospects actions are what determine their
      suitability to be your clients.

      Going through this process creates an advantage
      where you cannot be compared, price shopped
      and devalued.

      Best,
      Ewen
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      • Profile picture of the author phil.wheatley
        Originally Posted by ewenmack View Post


        You write up a bait piece about it and
        now those who request it have shown
        they are warm candidates on this specialized
        subject.

        in order to get this, they have to hand over
        their email to download it.
        Hey Ewan

        Some great advice, thanks very much. Do you mind me asking how you're getting this report into their "hands", are you cold calling and then directing them to your site? Or emailing them? PPC? If you'd rather not say then I understand. I ask becasue I totally agree with you but I have stuggled to get certain businesses like solicitors, dentists to grab these types of reports, possibly due to the amount of people trying similar things.

        Many thanks
        Phil
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        • Profile picture of the author ewenmack
          Originally Posted by phil.wheatley View Post

          Hey Ewan

          Some great advice, thanks very much. Do you mind me asking how you're getting this report into their "hands", are you cold calling and then directing them to your site? Or emailing them? PPC? If you'd rather not say then I understand. I ask becasue I totally agree with you but I have stuggled to get certain businesses like solicitors, dentists to grab these types of reports, possibly due to the amount of people trying similar things.

          Many thanks
          Phil
          Phil, Facebook is ideal because the targeting
          possibilities are just fantastic.

          Best,
          Ewen
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  • Profile picture of the author kingde
    Even when you are selling the results and not the commoditized processes, people are still going to ask themselves, why you? You could come out with some fancy reasoning or you could allow them to put their trust in your discovered/devised system that produces results. (Even have a short story how you came up with it) Give it a special name and description and make it totally unique to you. (conceptually not obvious). This gives you more leverage than just saying pick me, we try harder etc etc. The only thing left at that point is to product the promised results and keep them happy that they chose you ;-) If you specialized in a particular industry or a type of business or even have a system of working that is not easily duplicated by the competition, including the entire experience of working with you.. then you can ask for higher prices, or just raise your rates and see who bites. Going for a lucrative market can set you apart with just a little snob appeal :-)
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