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Why Marketing Agencies Shouldn’t Publish Their Fees

Karri Flatla has given me a good topic for a future article in the business coaching series. She argues that B2B firms should publish their prices on their web site

What is worse is that business owners will rationalize their choice to not list prices until they are blue in the face, claiming they want their visitors to shop value, not price. This is apparently in hopes that the unsuspecting visitor will call them up to find out the price. It’s very egocentric when you think about it. Moreover, by not listing prices, you frustrate your users and, in effect draw more attention to the “How much does it cost?” question. I doubt that is the intended effect.

She’s talking generally, but I’m a big believer in NOT publishing any fees on your marketing firm’s web site. I’ll go into more detail at a later point, but here’s the brief version:

  1. Visitors WILL shop on price and not value, if you display pricing. No one can explain the value of an internet marketing campaign using just web copy. That needs to be done in person; it needs to be customized to the client’s needs. Only then can you discuss pricing.
  2. You’ll miss out on small clients and large clients. Small companies will likely believe they can’t afford you – because of the price. Large companies may see your price and laugh, then leave your site believing that if you charge that little of an amount, you can’t possibly handle their campaign.
  3. Pricing doesn’t have to be set in stone. Supply and demand baby. When you’re busy, your pricing goes up. When you’re quiet, pricing can be reduced. It’s hard to be that fluid, when your price is on your web site.

I have more to say on the topic, but hats-off to Karri for an article that got me fired-up enough to squeeze this response out of me.

  • http://www.marketingpilgrim.com Andy Beal

    I’m going to add the first comment. There a few exceptions. The one I do agree with is if you are an extremely small agency, don’t plan on getting bigger, and want to avoid having to answer enquiries of any kind. In that case, you can publish a very high fee, to warn away clients.

  • http://www.donloper.com Joshua Steimle

    I was inspired by SEOmoz to start publishing prices on our website and explained why on my blog.

    I think some of your concerns Andy can be addressed by publishing your prices as a range (i.e. $2,000 to $10,000 per month) rather than just a set price. That way smaller companies will assume they’re on the lower end and larger companies may assume they’re on the upper end, but at least it does get rid of all the people contacting you who want to spend $50/month, and…I guess you also get rid of those who want to spend $50K/month. Man, I can’t stand those clients.

  • http://www.marketingpilgrim.com Andy Beal

    Thanks Joshua. Certainly adding a price range is a whole lot better than publishing a fixed cost, but I’d still be concerned that a client would come to you for a proposal. You end up believing they need a service in the $8k range, but they come back and ask “what can I get for $2k?”

    It’s also worth noting that SEOmoz is unlike any other SEO firm. First, they’ve built their brand on transparency, and they also have more work than they know what to do with. ;-)

  • http://www.ibrian.co.uk/ Brian Turner

    IMO you can only price a general product – you simply cannot publish generic prices for customised services.

    Yes, there are “products” out there, such as link services working with a specifically priced inventory.

    But so much of SEO is about multiple level problem solving in a way that is entirely dependent on the needs of the client.

    I’m a techie and poor businessman – which means I charge for the cost of time and resources spent on a project – rather than issue generic pricing which has over-price some service areas just for redundancy purposes.

    2c.

  • http://www.bizmord.com/Blog Igor M.

    Andy, I agree with you. Besides, I think that SEO companies will be better off not having a “client” who gets frustrated because he/she doesn’t see the cost. “We’re not the cheapest … move on”

    If someone is interested in services you provide and the first thing they’re looking for is the COST of your service … I think you’ll be better off not having them as a client. Am I wrong if I guess that this client will bring the most pain into the SEM/O company?

  • http://www.sitecreations.com/blog Scott Clark

    For a while in 2005/2006 I tracked telephone and email inquiries into my firm (SEO/SEM/Usability.) If the client asked about costs/price in the first
    5 minutes of the call, the chances of that client listening to advice, paying on time, and doing what was needed to succeed were automatically near zero – independent of how much time or money the project would truly end up costing.

    It says “I fear you. Put your hands on the wall and let me see if you’re going to take advantage of me.” … clearly no way to start out what needs to be a long-term relationship.

  • http://www.admira.com.br Marcos Nobre

    well, when i got sick of answer the same old how much question i launched a “product for starters”, publishing its price on our website. that way i’ve got rid of the fifty-bucks-month guys and preserved our concept of tailormade campaigns for the big money.

  • http://pending oren green

    The transparent pricing model is a fresh idea and quite alluring. However there are a lot of competitive (less corporative) industries which perceive transparency in a different light.

    For a small client the costing is of a big importance and are often harder to persuade, they focus less on ethics and more so on cost efficiency. A larger brand is more focused on secrecy, branding and ethos. And is more likely to opt for a service regardless of the cost difference (this is assuming our transparent firm are somewhere within the range of reason in terms of pricing).

    I think the money is always a means to an end, and can act as more of a barrier than an indication of quality. The only reason to display pricing is to establish authenticity and credibility – for which there are better means. Not to show your client you did your homework and price competitively.

  • http://www.sitecreations.com/blog Scott Clark

    It may work to setup the online inquiries so that one could both gather the priorities of a client (e.g. 1. cost, 2. long term performance, etc.) as well as some sort of financial metric (annual sales, marketing budget.)

    I’ve never noticed a strong correlation size of firm and the price-question-early-on factor. The thoughtful small firms, even with limited budget, understand that their online expenses are investments. Early questions reflect an evaluation of the prospectus (e.g. the consultant/firm) as they become more informed about their level of investment and commitment. This seems to correlate very well with long-term success, even as it starts out on a shoestring.

  • oren green

    I agree with the ideal of gathering client priorities, but I’m not sure how big one is on filling in forms before the client knows who they are talking to. I know I’m reluctant to submit information, as I’m making the enquiry and I’d like to set the tone of what I’m looking for.

    I agree that the longer the evaluation continues the more likely a long term relationship will develop (measure twice, cut once). However I think avoiding barriers, or choosing how to funnel that information to the client is more prudent rather than laying it all out there.

    The question is, would pricing transparency increase the chances of contact from the thoughtful clients or will it limit the amount of enquiries because you’ve limited the firms who think you price too much, or those you think you price too little. Also the concept of a range risks the “why is it 5k and not 3k question?”

  • http://www.socialmediagroup.ca maggie fox

    I agree, Andy, the farther away I get can from clients that purchase based solely on price, the better. I’m not going to put clients that do value quality over cost in a position where they have no other metric to go by.

    What we all need is a Quality-O-Metre (Cdn spelling;-)

  • http://www.alibiproductions.com Drew Stauffer

    The majority of the new clients I receive have had some sort of bad experience with their last design, development, or marketing company. My clients are often over joyed with the amount of information I give them, both in my suggestions for their new site and what will and won’t work. The only way I can spread my goodwill is by getting them on the phone. Posting my prices doesn’t give me that opporitunity. I try to put extra effort into my content promotioning the client to contact my for any reason at all. If they have a silly question, contact me. If they have a complicated analysis they can’t figure out, contact me.

    Point of the story, I have to get you on the phone to prove I’m better than the next guy.

  • http://www.grittyva.com Virtual Assistant

    I wrote a blog post in response to the same articles, which you can check out here: http://www.grittyva.com/the_gritty_virtual_assist/2007/01/pricing_is_not_.html

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  • http://blog.merjis.com/ Jeremy Chatfield

    Ok, I’m late to this party. I’ve just had to rethink this whole issue. Initially I was under the impression that only human sales agent based thinking would lead to withholding fees from the web site and presentations. However, I’ve recently had two radically different clients with superficially similar marketing needs. My costs of servicing each account are markedly different and the value to the client is differently perceived. Given that marketing itself is about establishing a perceived value to the consumer, it’d be strange to hold ourselves static with demand inelasticity from certain segments of the market.

    My somewhat erratic pricing and wide range of service levels is actually why I retain some marketeers as clients as they job switch; I’m working with one guy on his third career move, and a couple of others as many as eight years after I first did any work with them… Which is about as far back as I’d begin to self-identify as a marketer rather than a lost geek who did web stuff.

    While many prospective clients do tend to price shop, that’s not a great indicator, IMO, of the service performance – it typically points to something else going on. There certainly are components that I can identify as a relatively invariant fee based part – competitive bid management, affiliate management and inbound link management. But everything else – keywords, networks, adverts, landing page design, web analytics, conversion journey improvements, use of social media, affiliate strategy, etc – is a per-client per-market elastic wobbly ball of possibilities.

    IMO, as much as anything else, the value of an insightful marketeer increases as the capability maturity of the client increases – because the client is more capable of acting on the insights. IME, that’s also correlated with a willingness to avoid price comparison shopping. It’s the less capable client that usually focuses on low costs – unless the more capable organisation is simply seeking to outsource a well understood component. The whole area is sufficiently new and evolving that capability maturities tend to be low, but that shouldn’t dominate a pricing strategy or a service offering that embraces low and high capability organisations.

    Trying to force a model adjusted for the long-established world of print, TV and radio on to internet marketing, when the role of the agency itself is still evolving, seems premature. I understand the urge to do it – clients love to be able to price services and make assumptions about standardised offerings. Illusory standardised offerings isn’t where I, at least, operate.

    Jeremy Chatfield’s last blog post..GAP Test Defects – Part Two

  • http://www.echoquote.com Dale Underwood

    Lots of valid points. One is missing though. Customers need pricing to understand the nature of an offering. The range idea is ok but doesn’t help you engage the visitor.

    What is needed is a way to promise budgetary pricing, and give it, in exchange for their info.

    We spent a year developing and patenting EchoQuote and it is as applicable to selling marketing services as it is to enterprise hardware/software.

    Dale