One of the biggest decisions an agency owner has to make is how to price their services. What is a fair price for both you and your clients? We're diving into pricing models, services, starting points and more.
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One of the biggest decisions an agency owner has to make is how to price their services. What is a fair price for both you and your clients?
To answer this question, you first have to decide what services you want to offer.
Services
Here are some typically offered social media marketing services. In many cases an agency will offer pre-built packages which include some services like limited content creation and inbox management on a monthly basis, with “a la carte” add-ons for additional services:
Once you’ve decided which services you want to offer, you’ll need to decide which platforms you want to offer each service for.
Platforms
Knowing which platforms you want to work with and which ones you’d prefer not to is important to know before approaching any potential clients.
Specializing in one social channel is a great way to market yourself as an expert on that platform. You may choose to be a specialized social media agency if you have a strong background in a certain skill such as copywriting or video production. Copywriting would lean more towards a LinkedIn or Twitter focus, while video production would be most beneficial for YouTube.
You may also decide to go this route if you’ve found personal success on a platform. This allows you to show off your past success and provide social proof to clients that you could help them crack the code to this certain platform as well.
Your clients, while more limited in a specialized model, will be solely interested in their accounts on this one channel. This allows for a more dedicated approach from both ends of the partnership.
To succeed with this option, you’ll have to know the ins and outs of the platform and stay up-to-date with all its new features.
If you’re interested in working on multiple platforms, you’ll open yourself up to more business but have to have a wider breadth of knowledge on many platforms.
The upside of this having a wider view of the social media space and being able to cross-post content.
Cross-posting is when you recycle content from one platform to another.
For example, when creating short-form video content, many agencies will post it to Instagram, TikTok, and YouTube Shorts. If you’re interested in providing mostly text based content, LinkedIn, X (Twitter), and Threads are likely the platforms you would work with and cross-post to.
After you’ve decided which services and platforms you’d like to manage, you’ll want to build your service packages.
Hourly Rate or Monthly Retainer?
The two most common ways social media agencies price their services out is by an hourly rate or by monthly plans.
An hourly rate pricing model is when an agency charges a client based on the price of one hour of work. This is why many agencies keep time sheets to be able to track how many hours each team member spent on a certain project/client work to then charge to the client later on.
If you are doing hourly, consider requesting clients to sign an agreement to work with you for a certain amount of time so that your partnership and financials are secured. This is called a retainer.
When you are locked in with a client for a period of time it also allows you to build a more secure and trusted relationship with them.
You’ll also be able to show your client how your services have benefitted them over time. As social media work often takes time to yield lasting results.
That’s why many social media managers choose to work with clients for a set amount of time to make a real impact on their client’s long-term strategy and accounts.
This is why monthly retainer plans are very popular among social media agencies.
How many months in a retainer package is up to you. We most commonly see 1 month, 3 month, or 6 month plans.
We suggest using at least a 3-month minimum retainer to start in order to be able to show the full impact of your work over time, because there is a ramp-up period when learning a client’s business and getting initial results.
If you've chosen the retainer model, you'll have to decide which services to offer by default in your retainer, and which services may be offered as an upsell - Most agencies will do this by building out pricing plans.
Agency Pricing Models
It’s common to have 3 different packages or plans for your clients to choose from. That doesn’t mean you can’t have more than 3 or offer custom packages, however having too many to choose from can overwhelm a potential client.
Be cognizant of the fact that most people will choose the middle tier due to the “Decoy Effect” (also known as Middle Option bias), so you will want your middle-tier package to include the services and pricing best suited to your business goals.
If you’re unsure where to start when it comes to structuring your packages, do some market research.
Check out others in your area who provide similar packages to what you want to offer. Find others by searching on social media such as Instagram or in Facebook Groups.
Many people post their packages in Social Media Manager and Social Media Agency Facebook Groups and ask for others' opinions on their plans, services, and how much they’re charging.
This research should give you a good insight into how others have set up their packages and plans.
If you’re interested in providing custom packages or a more a la carte system, make sure to provide a list of services and their prices. This is so prospective clients can easily see what each service would cost and how that process would work if they choose to go this route.
These services could also be treated as possible add-on services to other packages, creating extra income opportunities.
We recommend keeping it simple when it comes to packages and plans so that your potential clients can fully understand each offering and make the best decision to meet their needs.
Unique Operating Models
If you’re looking for more ways to make money for your agency, consider these unique operating models.
Reselling
Reselling is a way for agencies to generate revenue by reselling or white-labeling existing software products as their own.
This business model is almost fully hands-off and infinitely scalable.
For example, you can white-label Cloud Campaign with all your agency’s branding and then “sell” a workspace to a client.
In this workspace, they can manage their own socials, but it looks like they’re doing it through your own state-of-the-art social media management software. In reality, it’s Cloud Campaign’s tool but they don’t need to know that.
It makes an agency look polished and professional with their own branded tool.
Agencies can generate scalable recurring revenue from their clients' monthly subscriptions to the white-labeled software and from any referrals they bring in.
If you’re curious to learn more about pricing white-labeled software as a reseller, check out our article on How to Price White-Label Software.
Affiliate Selling
Referrals are another unique way to make extra income.
Sign up for multiple referral programs and promote them to your clients and your online audience.
You’ll receive a portion of your referred person’s subscription money back from the company.
The amount will vary per referral program. Cloud Campaign’s referral program allows you to earn 20% of your referral’s subscription for 12 months along with 5% of your referral’s referrals.
Not a bad income revenue just for sharing about the platform and having someone sign up to try it out.
Conclusion
At the end of the day, your pricing needs to reflect the value and expertise you’re bringing to your clients. Don’t sell your expertise short.
Take the time to thoroughly build out your pricing models and you’ll have set a solid foundation to build your agency off of.
And don’t forget to reevaluate your pricing model often and continue to raise your prices as your agency’s expertise grows.
If you’re interested in seeing how Cloud Campaign’s white-labelable software could make an impact on your revenue, check us out and don’t be afraid to reach out with any questions!
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