When it comes to working with a digital agency, there are a few key factors to consider. The most common pricing model used by agencies is the hourly rate, where customers are charged for the time spent on their project. Licensing fees are another type of fee that may be charged, which relate to the market technology used by the company. For example, if the agency licenses a CRM or marketing automation system on behalf of the customer, they may take a portion of the fee to cover their services.
In addition to hourly and licensing fees, agencies may also charge a mark-up for services they outsource. For example, if an agency needs to print materials for a customer, they may outsource this task to a printing partner and add a 10-20% mark-up to cover their research, organization and provider administration costs. Forbes Agency Council suggests experimenting with a profit-sharing model as an alternative to traditional pricing models. This allows agencies to make money on more jobs than they lose money on, and refine their methods of managing agency fees over time.
Many young agencies calculate their fees based on what they think their service is worth, market price or competition. However, it's important to remember that your agency needs to do something that not many other agencies do, do better than any other agency and provide something that your ideal client really needs in order to stand out from the competition. Onboarding is an important part of working with an agency and involves catching up with your business so that they can provide the best service possible. When it comes to pricing, it's important to consider factors such as your company's industry, needs and processes, as well as the capabilities of the agency or writer and the market demand for your services.
Eucalypt Managing Director Kathryn Hawkins recommends preparing for an introductory call with a content marketing agency in order to get the most out of the discussion. Understanding what causes agency costs to go up or down can also help you when preparing a budget for other marketing services.