How should you charge your customers for services like autoresponder use, plugins, software, outsourcing and anything else you have to buy?
When we build funnels, of any size or scope for customers, it isn’t as clear as building just one thing for them. We might have to set up a CRM or autoresponder for them or install 3 or 4 plugins.
If they need content, we need to get content writers or developers to write custom scripts.
How should we charge our customers when we have to buy plugins and platforms like this? We going to define how we charge customers so you’re never out of pocket.
When we build marketing funnels for customers, we’re building a complex ecosystem of software, apps and content to help their business.
At a high level, some of the tools we use could be like the below.
- Website with WordPress for content and marketing
- Plugins for optin capture
- Page Builder (Beaver Builder, Divi, ClickFunnels)
- Autoresponder (ActiveCampaign, MailChimp)
- Email content
Of course, this list isn’t exhaustive. We also have optimisation plugins, A/B testing software and analytics platforms. But the above is pretty recognisable “stack” for what we’d use with customers.
Some of those tools are monthly costs, some are a developer license where we have unlimited installs. Some are a yearly maintenance cost and some are one off costs for outsourcers.
The massive problem that marketing funnel builder face, is if they invest in one set of tools, will they a) ever use them again for other customers or b) make sure they’re not out of pocket if they buy and customers don’t pay their monthly fee to you.
For example, ActiveCampaign is a monthly fee. I’d have to pay $70 per month just to keep the customer’s account active. If they don’t pay me one month, am I going to be $70 out of pocket?
Where most funnel builders go wrong
Most marketing funnel builders make the pricing/ownership mistake of custom purchases. This means, that for every project they’re looking at new plugins and software for every customer.
Typically, this is a symptom of not having a defined customer and market. For example, if you build marketing funnels for coffee bean producers, you’ll build a pretty standard marketing funnel product. That way you’ll know exactly what they need for 99% of their projects and other customers.
If you swap customer types and project types over and over, you’re always going to be looking at new software and services. Rather than take 1 product and charging 10 customers to use it. You’re finding 10 products for 10 customers and that’s an expensive way to run a business.
Pricing models for most services are moving to monthly subscriptions. Autoresponders, page builders, analytics platforms. They’re all moving to monthly SaaS style models of monthly subscriptions. If you don’t have the right pricing and cost structure, you’ll find your monthly expenses are going to go up and up.
Should you own the plugin or should the customer?
The most common question I’m asked by businesses who build funnels, when talking about plugins and software, is WHO should own the plugin and software.
It’s a good question and frankly there isn’t an easy answer. Understanding who should own a plugin or service is easier to answer after you’ve read this post.
There are a rules and process that you should follow for this thing in general. Once you’re clear on how you’re charging and what you use, you’ll be clearer on who owns the products.
As a rule, we try to own ALL the technology that we use with customers. Autoresponders, plugins, services, platforms and software.
We can afford to do that, because our customers MUST pay a monthly fee to work with us and that covers most of the costs.
Some tools you HAVE to have new licenses for. Some software only has one license per user and you’d have to buy another licence to use it with a customer.
No problem at all. Most of the time, we’ll get an email address from the customer’s business for us to use. We explain that some software must be bought through their business, but we’ll take care of and mange the system.
So we’ll get firstname.lastname@example.org set up and we’ll add that mailbox to our system. Then we’ll sign up to new single license software with that name. Still following the pricing structure below. We’ll BUY the software, but invoice the customer.
I know some businesses that do it the other way around, using email@example.com as an email. Frankly I don’t really see the difference.
Process and protocol
Another thing to bear in mind, outside of cost and pricing for services is your process or protocols. If you’re using a standardised set of tools, when you need to fix something that goes wrong (and it will go wrong) then it’s easier to fix because it’s standard across your business.
When you have different platforms, tools and services for different customers, it becomes very difficult to fix problems quickly because you have to re-learn the process over and over.
So, let’s see how we can blank to blank your blank
Standardise your stack
You might have picked up this before even reading this. You must standardise your stack.
A “stack” is just a list of technology and tools that you use for each customer. It’s like a standard set of tools that you know ALL your customers will use.
The faster you can standardise your stack, the faster you’ll see your monthly costs go down and it’s easier to charge. I know that our agency’s MINIMUM costs to a customer is $500 a month. I know exactly what they’re getting for that and I know how to set it up.
Think about building a table. If you built tables (as in the physical thing you can eat lunch on) over and over, you’d develop a handful of tools that you know you’ll need.
You wouldn’t try to build the same table over and over with different tools. Regardless of whether the customer wants you to or not. You’re the expert and you know what you need.
Let’s list out the standard tools that you need to complete a project.
- Page builder
- Form builder
- Payment gateway
- Delivery platform (course website, membership website, downloads etc.)
Some of these might be free, some might be monthly or a one off/yearly. You can use our Funnel Builder’s tool pricing cheatsheet here to work out the costs and price to your customer.
You want to list out the tools that you most frequently use and what customers really need. There are some tools and platforms that you must use no matter what. Hosting, page builder for starters. They might have a CRM or autoresponder already themselves.
If they DO have it already, that’s fine. But you can still work out the pricing for it for future use.
For each tool, list out the cost to you. Write down if it’s a monthly or yearly or one off. Whatever the costs are, your customers should be paying for it.
List out the benefits
Next, if you’re using the Funnel Builder’s tool pricing cheatsheet here, head to the last column and start listing the benefits.
These are things that make your customer’s life easier and better. Benefits need to be completely focused on the customer and the reason WHY they’d have a better life if you used it.
Often, the tool websites themselves have their benefits listed out. You could use those. But think a little harder and try to understand what’s really BETTER for your customers if you decide to use this technology?
Does the page builder mean faster loading? OK, well the might be a results and a slight benefit. But if I don’t understand why that’s a benefit, then it doesn’t really matter. The page builder page speed loading, might have a direct result on the number of people who buy and sign up.
It has benefits to their traffic and a page that’s easier to build means they can have more pages that look amazing. Amazing looking pages increase sales and conversions. They look better on mobiles and tablets and again, increase conversions.
List out the benefits in the Funnel Builder’s tool pricing worksheet here and think about WHY this makes the customer’s life better.
As a rule, what you’re going to charge the customer, is your cost x3. Your costs time 3.
So if it costs you $100, the customer needs to pay $300. ActiveCampaign costs me $79 a month, so that’s $237 to the customer.
“Mike! There is no way that my customers will pay $237 a month for an autoresponder. You’re a madman.”
Maybe. But there’s 2 critical flaws with thinking like this.
First, customer’s AREN’T buying an autoresponder. They’re buying all the benefits that you’ve listed. They’re also buying your management, setup, support, input and add-ons.
For example, when we set up an ActiveCampaign account for a customer, we add in a few standard automation series’ that keep their data clean and tag new users.
This is another benefit of standardising your stack. You can copy features and add-ons from one customer to another and the benefits stack up.
This is the equivalent to buying a car or buying a car lease. A lease has servicing, tax, insurance, support and a few other things in it.
If you’re using something everyday for your customers, you must charge appropriately to support and maintain the service.
Secondly, if your customers won’t pay, then maybe you need to find new customers? We’ve talked about low paying customers before (I’ve been interviewed on ClickFunnels about it too).
If you select a customer type and work with that market over and over, you can charge higher prices. Don’t ever lower your pricing to get more customers on board, that’s cancer to your business.
What about outsourcing? For example, we have a copywriter who writes the majority of our emails for customers. Whatever they charge me, I’ll 3x. $100 for an email – that’s $300 for the customer. I have to manage the process, project manage the copywriter (although frankly they’re brilliant) and I’ll probably be the one uploading the email into the autoresponder.
By the way, we have a series of pre-written emails which are fill in the blank here. They’re a one off cost and if you’re looking for simple email series’ for you and your customers, it could prove very profitable to use (copistore.com).
What about yearly costs? For example, Beaver Builder costs me $400 a year. So yep, I’ll charge that x3 for $1200 and move that cost onto the customer. HOWEVER, Beaver Builder has unlimited licenses so if I have 1200 websites that only $1 per customer right?
Well, kind of. We’ll talk about this in the next section. But it needs to be profitable per customer.
Is it profitable after one customer?
Let’s use my $1200 per year page builder. Over 12 months that’s $100 a month. So maybe I could incorporate that cost into their monthly? And that’s exactly what we do.
I want to make sure that 1 project is profitable. I don’t think break even points work for a lot of agency business.
For example, if I say “well, this product isn’t profitable for 9 people, but as soon as I get 10 people on board, it’ll be profitable”, that’s really dangerous. If 1 person leaves, it’s already not profitable.
I have to make sure that every single individual project is profitable. I don’t want to be left in the lurch if someone leaves. Which is why listing the benefits is so important.
The more I understand the benefits I’m giving by using the tool with the customer, I can better justify a cost that supports my pricing model.
For example, our hosting is $99 a month to customers. That includes backups, restoring, 24 hour support etc. However, the server I use can hold 10 sites for $99 a month. If I get 10 people on that platform, my margins go up while they all get the same benefits.
One person pays for all that hosting. But as soon as one more person joins we’re even more profitable.
Use your own affiliate links
Another little trick I’ve picked up is to sign up to the affiliate links for all the products you use. Make sure to use that link whenever you buy another piece of software. Or if there is a tool that the customer will 100% use without you, then get them to sign up using that and claim the % of the affiliate sale.
Buy smart and don’t buy frequently
The most important point I believe is to provide tools to your customers that really offer a benefit. Don’t buy every new shiny object that comes into view just because you THINK you can make money form it.
Don’t buy every new tool that comes your way. Really explore the benefits and pricing model. If you’re desperate to buy something, try selling it to your customers before you buy it. If someone is willing to pay 3x for you to manage it for them, then it might be worth buying.
I remember the moment that I first sold my SECOND funnel for a course business. Everything was already built and I knew what needed to be done. It was a massive relief knowing that all my customers would follow the same process. They were all profitable and they all took less time to set up.
Remember that we have our Funnel Builder’s tool pricing cheatsheet here to work out your tools stack and pricing super easily here.
What’s the pricing model you use for customers? What tools do you use over and over again for your customers? Let me know in the comments below.