How do you determine pricing with small business clients?

7 replies
I tweaked my web design plan from the last thread and will build out a sales funnel for local businesses instead. This will include an e-commerce store (for those who don't have one), email capture, lead magnet that can be printed, and short email sequence. I'm thinking of targeting jewelry stores.

How would you guys price this? I'm thinking of charging $1,000 for the funnel setup, plus $100 a month for hosting which would nominally include setup of local citations across the web. I don't know if that fee is too much or too little. My main goal is to eventually create a stable of 30 clients paying me $3,000 a month.

PS: all prospecting to be done via phone/email since I live in Thailand.
#business #clients #determine #pricing #small
  • Profile picture of the author animal44
    Originally Posted by Delta223 View Post

    I tweaked my web design plan from the last thread and will build out a sales funnel for local businesses instead. This will include an e-commerce store (for those who don't have one), email capture, lead magnet that can be printed, and short email sequence. I'm thinking of targeting jewelry stores.
    Now we're talking... A sales funnel is the jewel in the crown. The keys to wealth beyond your wildest dreams...

    But first...
    Originally Posted by Delta223 View Post

    $100 a month for hosting
    Forget this. This is peanuts for monkeys as I'll demonstrate with a case study shortly...

    And it can potentially do your reputation harm and lose you clients.
    Originally Posted by Delta223 View Post

    How would you guys price this? I'm thinking of charging $1,000 for the funnel setup, plus $100 a month for hosting which would nominally include setup of local citations across the web. I don't know if that fee is too much or too little. My main goal is to eventually create a stable of 30 clients paying me $3,000 a month.
    $1,000...? A sales funnel is possibly the most valuable thing you can build for a client. And you want to give it to them for a measly $1,000... ?

    Firstly a proper sales funnel takes more than a few hours to build. A simple funnel may not take up much time, but to get the best benefit you must test and tweak and build it out into a web that ensnares your customers :-) Gosh, doesn't that sound sinister...?

    Let me give you an example...

    A high street retailer. It doesn't really matter what it is, it can be pretty much any type. In this case it's an independently owned pharmacy.

    Starting point was (figures rounded)
    Turnover 380k
    Net profit after all expenses including owners salary: 32k
    Average transaction 12

    We started with email and direct mail offers, package deals rather than discounts. Testing on a small sample first. We then rewrote their advertising, bought in a few JVs and after about eight months started building a proper sales funnel.

    Our fee structure is a retainer, in this case 2k monthly, plus 20% of the profits we generate.

    At the end of the first year their net profits after our fees was 95k. Our fees totaled 83k

    We continued building up the sales funnel and at the end of the second year net profits were 335k. Our fees 303k.

    Compare that to the monkeys and their peanuts

    We continue to get paid because we own the sales funnel, the email/dm campaigns, the advertisements and so forth.

    But we didn't stop there...

    We found (actually they found us) another larger pharmacy - not a competitor.

    Their starting point was:
    Turnover 950k
    Net profit after all expenses including owners salary: 77k
    Average transaction 13

    We implemented pretty much exactly the same stuff as the first client. Some stuff was changed, but 90% of the work was done and tested with the first client.

    End result net profits were 821k. Our fees 744k.

    Why would a business owner pay us these sorts of figures?

    She is a pharmacist, not a marketer. The ROI on her own advertising was tiny. We reduced her ineffective advertising costs and we were paid on performance. She's happy to get on with her pharmacy stuff and her business owner stuff and leave us to generate 10x the profits she was able to do...

    The second client gets a tried and tested system inserted into their business that makes ongoing profits with no extra expense or effort. Their advertising costs have also been substantially reduced.

    Do you really want to just earn 1,000 per client...?

    And we also have a jeweler on our books...
    Originally Posted by Delta223 View Post

    PS: all prospecting to be done via phone/email since I live in Thailand.
    Why not build your own sales funnel...?

    I won't speak about phone, but I'd suggest contact via email be engaging rather than salesy. In other words, start a conversation about something they're passionate about, rather than try and sell them something. You'll get far better responses...
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    • Profile picture of the author Delta223
      Fantastic response, I feel like I'm in business even though I haven't done any of the work yet
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  • Profile picture of the author Claude Whitacre
    Originally Posted by Delta223 View Post

    I tweaked my web design plan from the last thread and will build out a sales funnel for local businesses instead. This will include an e-commerce store (for those who don't have one), email capture, lead magnet that can be printed, and short email sequence. I'm thinking of targeting jewelry stores.

    How would you guys price this? I'm thinking of charging $1,000 for the funnel setup, plus $100 a month for hosting which would nominally include setup of local citations across the web. I don't know if that fee is too much or too little. My main goal is to eventually create a stable of 30 clients paying me $3,000 a month.

    PS: all prospecting to be done via phone/email since I live in Thailand.
    Build several sales funnels for yourself, and let them prospect for you. Of course, you can use e-mail to start the flow of prospects.

    If it's a simple cookie cutter funnel, I get why you think $1,000 is fair. But if it's customized and detailed, you can justify tens of thousands of dollars.

    Cold calling to make a $1,000 sale....which requires you do lots of work to deliver...is going to get old really quick.

    Your funnel should be your best sales example. And build several, just for yourself. In fact, I can't think of anything that would pay you more, than investing your time building another sales funnel for yourself. Maybe make each one niche specific.

    My rule of thumb was always to charge enough that I was excited to get the business....and would be willing to put up with some annoyances.
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  • Profile picture of the author savidge4
    I am a HUGE proponent of doing for yourself before doing for others. I cant agree more with Claude and Animal... Build the Funnel for yourself to draw in your potential clients. You will learn real quick.. "short email sequence"... not such a good idea... at a minimum, think 10 to start. you may find you need more, Claude shared an experience not to long ago, where he bought on try 23 or something like that.

    What I call "burst pitching" or short sequence selling does indeed get results.. get your 3% then out.. BUT longer pitches provide far greater results *** with a caveat.. the list has to be targeted. Keep in mind.. because we are suggesting your own funnel.. the list in THEORY should be just that.. TARGETTED
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  • Profile picture of the author savidge4
    Originally Posted by Delta223 View Post

    I'm thinking of charging $1,000 for the funnel setup, plus $100 a month for hosting which would nominally include setup of local citations across the web.
    I'm going to hit this specifically... the numbers look great.. at what .03 Baht to the USD.. $100 a month ( USD ) is BIG money. ( 30K baht is the average YEARLY salary for say a teacher in Thailand - that equates to $900 USD PER YEAR)

    What the OP is "hoping for" ( $3000 a month ) is 100,000 Baht per month, or the equivalent of 3x a teachers yearly salary.

    With all that said.. in a WORLD market Delta.. you can see you are selling yourself short. You simply cant think of what comfort in your home country is, you need to think about what the level of comfort in the country you are targeting is.

    Realistically.. with a proven funnel ( your own ) you could charge $10,000 USD for setup and $1000 USD a month for localized SEO work, to feed the funnel. All you would need is 3 clients to get the same return.. $30K up front, and $3000 monthly. and the difference in price hinges on a working proven funnel
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  • Profile picture of the author gadislade
    pricing is the critical elements to achieving profit. For this you have to consider following things:-
    1. First off all you have to understand service cos and pricing impact
    2. Learn from your competitors and pricing below the competition
    3. Understand your conversions and metrics
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  • Profile picture of the author SalesGod
    I sell a consulting package to businesses. We build them out and manage a sales funnel and provide sales training to handle and close the leads they get. I charge $5,000 a month for this. As long as your going to make them more then they pay you every month you can charge whatever you want. I work with Home Remodeling companies. Each sale is like 15-25k so it works.
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