Caught the Milk Truck, NOW WHAT TO DO!??

22 replies
Warriors,

I need you guys. So I have a client who wants to take his first foray into PPC (Google Adwords). Clearly PPC runs hand in hand with conversion optimization. Being that this particular client is starting from the ground up, and his willing to spend $10k per week or $40k per month, I have NO CLUE how to charge the client. It was a lot easier to submit proposals when there was a problem, however, this is 100% opportunity. The services rendered will be:

1. Campaign Development and Management
2. Landing Page Creation
3. Conversion Optimization

I expect this to be an on going, hands on one month long project as they will be targeting different keywords. So, my style is to optimize pages around the specific / particular advertisement...

If I were charging a client based on what was broken, I'd charge a retainer, then a "royalty" (upfront), based on the projected sales increase - provided my efforts were successful... Caveat; I wouldn't approach anyone I couldn't help in my sleep...

Being that this client is brand new... I have zero idea how, and how much to charge. I was thinking of $10k for the 30 days or so worth of work, but got to thinking that I may be selling myself woefully short....

I'd like to get fair upfront pricing done, + a monthly residual / retainer for campaign management of a $40k monthly spend.

Help!! Thanks!!
#caught #milk #truck
  • Profile picture of the author MaxwellB
    Standard campaign management fees are 30% and I've seen set up fees equal the monthly management fee but not with numbers this high.

    a 5k per month campaign is going to have the same keywords really as a 40k per month campaign so If it were me personally I would do 12k set up fee and 10k per month management fee. Which amounts to a 25% of budget monthly management fee.
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    • Profile picture of the author James English
      Originally Posted by MaxwellB View Post

      Standard campaign management fees are 30% and I've seen set up fees equal the monthly management fee but not with numbers this high.

      a 5k per month campaign is going to have the same keywords really as a 40k per month campaign so If it were me personally I would do 12k set up fee and 10k per month management fee. Which amounts to a 25% of budget monthly management fee.
      My first campaign I ran was at $250 / month. The budget I was working with was $60k a month.

      I would like to publicly apologize to everyone here for lowballing so hard! Lesson learned!
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      • Profile picture of the author MaxwellB
        Originally Posted by Trent English View Post

        My first campaign I ran was at $250 / month. The budget I was working with was $60k a month.

        I would like to publicly apologize to everyone here for lowballing so hard! Lesson learned!
        I literally gasped when I read the first 2 sentences.

        O my god haha they got you for free! You drove hundreds of thousands worth of sales for $250 per month hahaha

        We live and we learn :rolleyes:
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      • Profile picture of the author kevin Hislop
        Originally Posted by Trent English View Post

        My first campaign I ran was at $250 / month. The budget I was working with was $60k a month.

        I would like to publicly apologize to everyone here for lowballing so hard! Lesson learned!
        WHOA... leason learned for sure.

        OP - Definately dont sell yourself sort, remember you're doing this to make money as well.

        Keep us posted
        Kev
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        • Profile picture of the author TheBigBee
          The resolution was simple. I slashed my fee to $5,000. Rather than charging a monthly flat fee, I am charging a flat fee per conversion. If the laws of averages hold up, this will basically be a 20-25% managment fee. Additionally, I stripped away all extras (sales funnel creation, content creation, copywriting) and tendered $150/hr.
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          • Profile picture of the author abbot
            Banned
            Originally Posted by TheBigBee View Post

            The resolution was simple. I slashed my fee to $5,000. Rather than charging a monthly flat fee, I am charging a flat fee per conversion. If the laws of averages hold up, this will basically be a 20-25% managment fee. Additionally, I stripped away all extras (sales funnel creation, content creation, copywriting) and tendered $150/hr.
            Well done..Congrats
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  • Profile picture of the author James English
    About $450,000 in sales a month haha. Live and learn is right!
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    • Profile picture of the author TheBigBee
      Originally Posted by Trent English View Post

      About $450,000 in sales a month haha. Live and learn is right!
      I wonder what future poor business owner paid for this mistake in the forum of a sky high fee! :-)
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      • Profile picture of the author TheBigBee
        UPDATE: I asked for $15k, fully intending to go as low as $10k. They counter bid $3k. Want a "rebuttal bid" by days' end.

        No clue what to do... How to bid.
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        • Profile picture of the author James English
          Meet them in the middle, ask for somewhere between $7-9K if you're willing to go that low
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        • Profile picture of the author MaxwellB
          Originally Posted by TheBigBee View Post

          UPDATE: I asked for $15k, fully intending to go as low as $10k. They counter bid $3k. Want a "rebuttal bid" by days' end.

          No clue what to do... How to bid.
          3k per month or 3k for setup?

          I wouldn't go lower than 5k per month and 6k set up or they will probably think your full of shit.

          I would counter at 8k set up 5k per month and have that be your lowest.

          I am surprised they came back so low. Sounds like they expect the star and the moon for pennies. 40k per month budget is driving hundreds of thousands in sales...they don't think that's worth anything?
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        • Profile picture of the author Anthem40
          Originally Posted by TheBigBee View Post

          UPDATE: I asked for $15k, fully intending to go as low as $10k. They counter bid $3k. Want a "rebuttal bid" by days' end.

          No clue what to do... How to bid.
          Pretty simple process.

          Make your typical value statement and then say you can go down to X.

          Rinse and repeat.
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    • Profile picture of the author DABK
      Did they, at least, buy you a bottle of fine wine?

      Originally Posted by Trent English View Post

      About $450,000 in sales a month haha. Live and learn is right!
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  • Profile picture of the author Eddie Spangler
    I have read lots of different ranges of fees for this service.
    Its not something I do so I cant speak from experience only reference.

    Here is an alternative pricing scheme from another company.
    PPC Management Pricing | What is a fair PPC Price?

    12k or 30 percent per month seems kinda pricey to me unless you are a PPC superstar and then you went and priced it like you are a PPC GOD

    At least you are testing out your PRICE BIG ideas and seeing if they will really work.

    Its possible that your first bid is so high that to cut it dramatically means you lose credibility or then again it might make them happy. Guess it doesnt matter as they either accept your counter or not.


    Makes for interesting drama

    Will the Big Bee get the deal or blow it in negotiations?
    How much will he settle for?
    Stay tuned to find out.
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    • Profile picture of the author James English
      This is a possibility. To put things in perspective from my past client example above: the company that replaced me is charging them $9k for a $60k/ month budget.

      My actual pricing right now is about 15-20% of adspend depending on how much work will be involved (keyword research, split testing, landing pages, etc). So for a 10k/month adspend I charge $2k / month to manage.

      So $7k or thereabouts sounds reasonable IF you are good at what you do. (Not questioning you by any means) If you can show them a return thats greater than that they should have no problem paying you.
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  • Profile picture of the author CreekChub
    Are you responding to the counterbid in person, or is this the back and forth email game? How well did you "sell" yourself and your skills? What's your positioning?

    I have taken the approach of "expert" and "trusted advisor", even if I'm fumbling my way through some things. I'm not a social media expert, but I sell it as such, for example. Then I scramble and put in 80+ hour weeks to constantly learn and pull it off. Eventually I'll be able to do just as much in half the time. You're not a rookie here, but my point is that the answer depends on your positioning.

    If it were me?

    "Mr. X, I would love to have your business. Yes, I like money - but that isn't my main goal right now. I do well for myself. I don't currently have any PPC clients in XYZ niche, and the potential in your market is huge.

    But I'm not a used car salesman. I'm very good at what I do, or you wouldn't be taking the time to talk to me. I'll cut my fees to $7500 for the first month, as a good faith measure - and an opportunity to prove to you that I am, indeed, as good as I say I am. When I deliver XX% at the end of the month, you won't have a problem paying my full fee - right?

    Not exact wording, but that's the basic response I would use. I've used the "I'm very good at what I do, but will make a short-term exception to prove it - at which time you're going to step up and pay what I'm worth" line hundreds of times. It either works, or it doesn't. My guess is that when it didn't work, just accepting the low-ball offer wouldn't have worked either.

    FWIW, what other folks are charging shouldn't really enter into the equation. You're selling an intangible service. No different than a website, at its most basic level. One guy wants $5K, another $2500, and a guy on craigslist is selling "a website" for $199. You don't really know what you're going to end up with until the party is over. Positioning, positioning, positioning. But make damn sure you can deliver!
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  • Profile picture of the author Mwind076
    Just based on what you originally said
    Being that this particular client is starting from the ground up, and his willing to spend $10k per week or $40k per month, I have NO CLUE how to charge the client.
    Why is he coming back at 3K? If he directly told you he's willing to spend 10K a week or 40K per month, he is either full of crap and just wanted to hook you in by getting your hopes up with big numbers, or he is completely lowballing you because he has no idea what your work entails, or is just cheap.

    Don't sell yourself short. I do like the idea of offering a lower first month, then letting him know he will be paying full price and I would hit him with "when we spoke originally, your budget was in line with the fees I charge to do this job correctly. Has that changed?" I would offer him a separate package for the price he offered so he can see what 3K would actually get him. Then ask for what you need, and what you deserve to get paid to do it the right way. If he doesn't want to do that, then be prepared to move on.

    What is your 15K for? Monthly, set up and first month?
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    • Profile picture of the author TheBigBee
      Originally Posted by Eddie Spangler View Post

      I have read lots of different ranges of fees for this service.
      Its not something I do so I cant speak from experience only reference.

      Here is an alternative pricing scheme from another company.
      PPC Management Pricing | What is a fair PPC Price?

      12k or 30 percent per month seems kinda pricey to me unless you are a PPC superstar and then you went and priced it like you are a PPC GOD

      At least you are testing out your PRICE BIG ideas and seeing if they will really work.

      Its possible that your first bid is so high that to cut it dramatically means you lose credibility or then again it might make them happy. Guess it doesnt matter as they either accept your counter or not.


      Makes for interesting drama

      Will the Big Bee get the deal or blow it in negotiations?
      How much will he settle for?
      Stay tuned to find out.
      Love it! I definitely try to offer bids so high that it raises the person out of their chair... as often as I can.


      Originally Posted by CreekChub View Post

      Are you responding to the counterbid in person, or is this the back and forth email game? How well did you "sell" yourself and your skills? What's your positioning?

      I have taken the approach of "expert" and "trusted advisor", even if I'm fumbling my way through some things. I'm not a social media expert, but I sell it as such, for example. Then I scramble and put in 80+ hour weeks to constantly learn and pull it off. Eventually I'll be able to do just as much in half the time. You're not a rookie here, but my point is that the answer depends on your positioning.
      I think folks need to take special note to this ^^^

      Originally Posted by MaxwellB View Post

      3k per month or 3k for setup?

      I am surprised they came back so low. Sounds like they expect the star and the moon for pennies. 40k per month budget is driving hundreds of thousands in sales...they don't think that's worth anything?
      I think I know what I'll do. They have the largest list of people I could possibly ever want to sell anything to...

      Originally Posted by Mwind076 View Post

      Just based on what you originally said

      Why is he coming back at 3K? If he directly told you he's willing to spend 10K a week or 40K per month, he is either full of crap and just wanted to hook you in by getting your hopes up with big numbers, or he is completely lowballing you because he has no idea what your work entails, or is just cheap.

      What is your 15K for? Monthly, set up and first month?
      Yeah, so they were willing to give Google 10k to 40k per month. Not me. Sorry for confusion. $3k appears to be standard pricing at these web shops though. So that's exactly where the number was fetched from... lol.
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  • Profile picture of the author Mwind076
    Yeah, so they were willing to give Google 10k to 40k per month. Not me. Sorry for confusion. $3k appears to be standard pricing at these web shops though. So that's exactly where the number was fetched from... lol.
    Yes, but you are not google...you are more hands on and there to deal with them directly. Google is much less personal. In addition, if they were willing to pay that much with google, I'm sure they would have by now, which means they aren't and they are shopping. I say do the lowered first month at 7,500 and every add'l month at 10, and throw in a few extras to make them all squishy inside.
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    • Profile picture of the author massiveray
      Originally Posted by Mwind076 View Post

      Yes, but you are not google...you are more hands on and there to deal with them directly. Google is much less personal. In addition, if they were willing to pay that much with google, I'm sure they would have by now, which means they aren't and they are shopping. I say do the lowered first month at 7,500 and every add'l month at 10, and throw in a few extras to make them all squishy inside.
      He is the middle man between his client and Google, he would effectively manage the 40k they are willing to give to Google. It's not him or Google.

      It seems that everybody around here is money hungry but don't actually live in the real world, with PPC you take 10% as standard and that is more than enough to manage an adwords campaign, just because they are spending a lot it doesn't mean that you are doing a lot of work. They could have keywords at $30 a click, and that hits 40k very quickly.

      Charge them 10% (and add in a minimum amount clause so they can't cut their spend and pay you nothing) unless you are exceptional with adwords (if you are, you can charge 20%) and then charge them a flat monthly fee for your conversion optimisation, this is the area where you will make both them and you money. I charge by the hour for this, minimum of 20 hours per month.

      These are 2 completely separate things, although they are closely related and directly affect each other they are not the same service and should be charged separately.

      The 3k they came back with is much more realistic than the 15 you offered.

      As for set up charge them whatever you like, it's a personal preference, a lot of people don't even charge for it.
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      • Profile picture of the author James English
        Originally Posted by massiveray View Post

        He is the middle man between his client and Google, he would effectively manage the 40k they are willing to give to Google. It's not him or Google.

        It seems that everybody around here is money hungry but don't actually live in the real world, with PPC you take 10% as standard and that is more than enough to manage an adwords campaign, just because they are spending a lot it doesn't mean that you are doing a lot of work. They could have keywords at $30 a click, and that hits 40k very quickly.

        Charge them 10% (and add in a minimum amount clause so they can't cut their spend and pay you nothing) unless you are exceptional with adwords (if you are, you can charge 20%) and then charge them a flat monthly fee for your conversion optimisation, this is the area where you will make both them and you money. I charge by the hour for this, minimum of 20 hours per month.

        These are 2 completely separate things, although they are closely related and directly affect each other they are not the same service and should be charged separately.

        The 3k they came back with is much more realistic than the 15 you offered.

        As for set up charge them whatever you like, it's a personal preference, a lot of people don't even charge for it.

        I see where you're coming from, and I guess I should have clarified more in my response. This is all one service for my clients. My flat 15-20% includes conversion optimization.

        I do it percentage based as I hate putting an hourly value on my time. I can't justify an hourly rate as I feel like it turns me into more of an employee, and not an equal.

        Very good point here though!
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        • Profile picture of the author TheBigBee
          Originally Posted by Trent English View Post

          I see where you're coming from, and I guess I should have clarified more in my response. This is all one service for my clients. My flat 15-20% includes conversion optimization.

          I do it percentage based as I hate putting an hourly value on my time. I can't justify an hourly rate as I feel like it turns me into more of an employee, and not an equal.

          Very good point here though!
          The key is conversion optimization. I think starting a PPC campaign without this structure in place is non-sensical...
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