Social media marketing agency pricing
In this blog post, I’m going to outline the social media pricing model that you should be using.
If you run or have started a social media marketing agency, you’ll need to get your pricing nailed. In this post I’m going to show you:
- Examples of pricing and how much you should charge for social media services
- What kinds of price points and different price levels you need
- Social media marketing agency pricing principles
Agency pricing is more simple than you think
This question comes up a lot and should be easy to answer.
“How much does it cost to work with you? What’s your price?”
If you ever answer with something like “it depends” or “we do bespoke and custom work” you’re already dead in the water.
Customers want certainty and priced packages for your social media services are more attractive.
Plus, with our social media agency pricing model, you’ll see just how profitable you can be.
Don’t pay attention to other social media agency pricing examples
There are lots of bullshit hype-reneurs out there that will tell you “I got $1m a month and I only have 3 members of staff!” and they leave out a few massive caveats.
- They’re almost certainly lying
- Revenue and turnover are pure vanity and many don’t make enough profit to sustain a longer business
- Mummy and Daddy paid for a lot of it
Are there businesses out there doing 7 figures a month? Absolutely of course there are. How long did it take them? Years maybe even decades.
On the other end of the spectrum you have local and smaller social media agencies whose pricing strategy is low low low. They refuse to increase their prices for whatever reason, and it’ll be tempting to follow their lead when it comes to the question of “what should I charge for social media marketing?”
Don’t follow the hype-reneurs, don’t follow the bottom feeders. Follow what you need to charge.
Social media agency pricing
In order to understand your pricing model and to determine the best price for your business, we have to look at how you’re going to deliver work to the client.
I’ll be blunt, charging by the day or (shudder) by the hour will kill your business. Partly because customers then see you as a commodity and more of a manual labour expense. Instead we want to package our prices and services up and sell them as products.
Second you need to make sure that you have as few services that you deliver as possible. Right now that sentence might not even make sense, but your social media agency pricing needs to be based on someone or something else delivering the result.
It doesn’t mean you need to hire immediately or take on a load of staff. It just means that if you do any of the delivery work with the customer, you need to make sure you have other income streams from other products, that aren’t tied to you doing the work. We’ll talk about some methods for achieving this.
All in, your social media marketing agency pricing model is going to follow something called a Product Menagerie. A collection of different products at different price points, most of which ARE NOT delivered by you.
5 product types
There are five product types for your social media agency pricing. In fact, these product types are applicable to all agency pricing and all businesses. But we’re just focusing on your SMMA right now.
The five product types are:
- Recurring revenue
- High ticket
We’ll go into more depth for each product type and the pricing examples that you should follow for your social marketing agency.
At this point, the absolute most critical aspect of YOUR social media agency pricing strategy, is to look at what you want to make and the capability to deliver that.
Remember when we talked about the bottom feeders and hype-reneurs from earlier? Your social media agency pricing model is going to be totally bespoke to you. They’re YOUR prices. Yes, you will come to some conclusions following this blog post that might make your prices seem “high”. Yes, some people will see you as expensive. Let them.
The key is understanding this very simple formula.
Price = your desired income/your capacity
First, we need to know how much you want to make in a year. It’s that simple. The first thing you need to work on is your desired income level.
If you want to earn $150,000 a year, awesome. If you want to earn $1m a year, awesome. Write down what you want to make per year.
Now the question becomes “what is your capacity?” Or, how many clients can you reasonably serve within a year at your current status?
If it’s just you, and you know you want to hire, but can’t afford to just yet, you’re probably capable of serving 4 clients a year. Trust me, I’ve tried to handle 10 or more and it’s just overwhelming.
Plus, the amount of effort it takes to sell ONE service is exactly the same, no matter the price. Plus it’s usually the same effort to deliver the work. So I’d rather have 4 clients, rather than 10 or more. Which means, you need to divide your annual income target but the number of clients you can serve.
$100,000 goal/4 clients = $25,000 per client.
But it gets better. Because at those prices you can afford to hire people. You’ll have someone like a VA or a partner or an admin team member do a lot of the boring and repetitive tasks. Also, we’re going to break that number down across multiple products and services.
Now you’ve got a rough idea of what you need to generate per client. It’s critical that you understand your capacity to take on work. As the business owner, your job is to be the visionary and lead the business. Other people and systems (eventually) should be delivering the work.
Straight off the bat, you need a few free products. In fact, you need a LOT of free products. This might sound counter intuitive but you’re going to have to build a lot of good will with customers and start to demonstrate that you’re worth the $25K investment.
Free products, also known as content, are the foundations for your social media marketing pricing. The more value you put into your free content, the more you can charge on the back.
- blog posts
- videos on YouTube
- sales pages (yes this is free content and can be extremely useful)
- training programmes
- lead magnets (free giveaways in exchange for an email like this)
- Social groups on Facebook or LinkedIn
- Email newsletters
If I had to start a social media marketing agency from scratch, I’d put way more time and effort into my blog content and YouTube content.
Jammy Digital (hey Martin and Lyndsay) is an outstanding example of an agency that understands the value of “free products” like content, and while they’re not a social media marketing agency, their digital agency is better for it.
If you know your niche, you know what they’re asking. Star creating content for free and build an audience.
If you want a ton of content ideas, check out this video: https://youtu.be/5DevugPj9t0
A splinter product, sometimes called a tripwire, is a low cost and low barrier product. The idea of a splinter product is to be sold and delivered on automation. Something that a customer can afford easily without risking too much, and that you personally don’t have to deliver.
The purpose of a splinter product is two-fold.
- Generate revenue that pays for the cost of acquiring the customer
- Gets the customer to spend money on you and begin to trust you
All too often we try to sell the customer a 6 month vacation when they’re still getting used to a weekend break. We’re asking them to move in, before we’ve had a drink with them.
Your splinter product can be anything, as long as it fills 3 critieria:
- It solves a hyper-specific problem for a specific niche
- No “social media guide” bullshit. It needs to be 100% laser focused on the niche and the problem. Something like “365 Instagram posts for fitness influencers”
- Ideally no human delivers the products
- At a bare minimum YOU cannot deliver the product. Some coaching programmes have found success with a $200 strategy session delivered by a coach, but it can’t be you. Create a product or a course or something
- It’s priced at a point that is easy to buy
- Anything between $20 and $200 is perfect
Splinter products won’t make you profit, but they will make you profitable.
Think about all the time, energy, money and work you have to put into acquiring a customer. Even if you did sell a $25,000 project, you know that you’re starting from a negative balance based on just getting them there. Advertising costs, overheads, admin. It costs money to land a client.
Your splinter products can reduce or even eliminate those costs and make each new sale more profitable. My friend and colleague Cam sells his Email Conversion Kit which is a spreadsheet of HUNDREDS of email ideas for email marketing.
Another reason I LOVE splinter products, is because 99% of your customers will want the same thing at the start. They’ll all have the same questions and they all start from similar places. Why not make the start of each project super-efficient and start delivering scalable products that move them along the process even faster PLUS you don’t have to do a thing.
- webinar recordings
- audio training
- swipe files
Chances are that you already have tons of splinter products already, you’re just relying on you delivering them rather than automating it.
Your splinter product price needs to be something between $20 and $200. High enough to be seen as valuable, low enough so that the risk is taken away.
If you want more help with building products, check out my free guide here: https://sellyourservice.co.uk/2020/04/fuck-the-furlough-how-to-make-money-with-your-brain-without-a-job/
Your core offer is the thing you do, day in, day out. Over and over and over, it’s the product or service that you deliver to customers and what you become known for.
Pricing your core offer is different to other products. We talked earlier about how your social media agency pricing needs to be based on what you want to make divided by capacity (customers). So if you want to make $250,000 and your team can serve 10 customers, then you need to make $25,000 per customer.
However that might not be $25,000 for your entire core product. It could be. But the goal is $25,000 per customer. If you only have one product then yes, it’d need to be $25,000.
However your core offer could be much less IF it follows these 3 criteria.
- It has a pure profit margin of at least $1000/£1000
- There needs to be a healthy PROFIT margin (not your pay margin) of at least $1000
- You can still not be the core “deliverer” of the product
- Tough, I know, but we’re saving you for the high ticket product
- The core offer is the one thing you’re known for
- The thing you’d base the success of your business on and delivers the result you want to be known for
Based on that information, before you’ve even designed WHAT the product is, you know it needs to have a clear 4 figure profit. The breakdown looks something like this
- Total price
- $1000 pure profit
- Cost of delivery
- Admin costs (overheads)
The example of agency pricing for a core model, might look like the below:
- £6000 social media marketing management
- £1000 profit
- £3500 cost to deliver (hiring someone)
- £500 overheads for systems
Your core offer could be strategy, management, asset creation, design. It could be training, coaching, software, audits and reports. It literally doesn’t matter. What does matter is the result that you say the customer gets i.e. lower cost per sale for their customers, larger audience for social posts, less time spent creating content.
Your core offer still needs to be hyper-specific and solve a specific problem for a specific niche.
Side note: Yes, customers DO want to work with you. You just can’t afford to do that, at this price. They can work with a member of your team.
You need to look at what you can afford to pay someone else to deliver those results to a customer. You want to make sure that you are making
If we have a $6000 core offer, that leave $19,000 for the rest of the target per customer. Both the high ticket and/or recurring revenue could take care of that remainder.
On the other hand, there’s no reason why your target per customer couldn’t also be your $25,000 price. It’d easily have a $1000 profit margin and according to Mike Michalowicz’s Profit First formula, if you build a 5% profit margin into your products, a $25,000 sale would be around $1250.
However your core product must still NOT be delivered by you. It might sound counter-intuitive but you want to make sure that your core offer can be delivered to customers if you’re away, sick, tired, asleep or on another planet.
High ticket aren’t the be all and end all of your products and offering. So many experts claim that you categorically need a high ticket item and frankly, I’m not 100% convinced.
Yes, a high ticket item can make a big difference to your top line revenue BUT a high ticket item must adhere to these threef criteria.
- It must be your MOST profitable product
- That’s right, the profit margin on a high ticket item needs to be higher than any other product. This is where most people go wrong.
- It has to deliver EXTREME levels of value
- Like massive life changing value – if you do social media management then you need an acceleration programme or SOMETHING that could change someone’s life.
- 10X the price
- Your high ticket item needs to be at least 10 times the cost of your core offer.
I want to be clear, your $25,000 price point might not be a high ticket item. A really good indicator of your high ticket price should be “If I sold 4 or 5 of these, would it complete all my revenue goals?” or better yet “If I sold ONE of these would it accomplish my revenue goals?”
Imagine selling ONE product and then being done for the year.
The reason most people get a high ticket product pricing for their social media marketing agency wrong, is because they think it’s all about the price. It’s not – it’s about the profit margin. I can assure you that $25,000 or $250,000 might sound like a lot, but it can evaporate quickly.
I believe that you should have a high ticket product, but it needs to be that – high ticket. Not just a high price point. It’s supposed to deliver extreme levels of value and be your most profitable product. You can absolutely have a $25,000 product as your core offer. Or you’ll see next that you could split it up for your recurring revenue product.
And you could have a $25,000 high ticket product. Same price, but massive transformation and higher profit. Usually this is where they’d work personally with you and you’d work on STRATEGY with the customer. Big time, baby.
If you’re looking for a social media agency pricing example and model, recurring revenue is where you should focus your efforts. Deciding what to charge is a part of a pricing strategy. But the most important aspect of a pricing strategy is “how often do you get paid?”
Recurring revenue is a lifesaver and accelerant for any business. And your social media marketing agency is no different. You categorically absolutely need a recurring monthly payment or subscription product.
You’ve got a couple of options for a recurring revenue price for your SMMA. Either take your core offer and split that over 12 months. Or create a separate product that is designed to deliver results like clockwork.
The advantage to pricing a core offer with a recurring revenue payment plan is it makes the product seem more affordable and perhaps more appealing. The disadvantage is that unless the product is structured in a way to repeatedly deliver results, it’s hard to keep asking for money.
My advice would be keep your core product as a separate product and offer a payment plan. Then create a separate recurring revenue product designed to generate subscription payments.
- Absolutely ZERO delivery from you
- The recurring revenue product WILL NOT SCALE if you’re the only one who can deliver it
- Helps someone get a result over and over and over
- Growth based metrics are great to go over. Also anything that saves the user TIME – people will gladly pay per month to save time on something
- If your core offer helps someone get from A to B. The rec. rev. product helps them keep B or get even further.
- Usually maintaining or supporting a transformation is core to a recurring revenue product.
Recurring revenue products might even become the main focus of your business. It could even be the core product. But I would still have a one-off core offer.
Price wise, for your social media marketing agency pricing model, you need a monthly price option that builds revenue over time. Recurring revenue is profitable and the foundation for your business. It’s also scalable as the delivery should be done in a way that means if one person buys or 10 or 100 then it doesn’t change the process.
For example, working with a customer in their office for 5 hours a week, for $397 a month is absolutely not scalable. There are physically a limited number of hours you can use. Even if you hired other people it doesn’t scale.
However, if you had a social media management team that did a ton of work for clients at $397 per month, and every time you landed 10 new clients you had to hire someone, then you’ve got a scalable product. GoWP has a BEAUTIFUL example of recurring revenue products for their development business.
Your price needs to build over time, and add to the top line of your business. Ideally, it needs to cover at least your admin and overhead costs, will paying for itself and delivering profit. However if it wasn’t profitable but still paid for the cost of the business and of course, it’s own delivery, eventually each new customer would become profitable.
You can have a $1497 per month product or a $19 a month product. Just make sure that it can scale – that’s the #1 requirement.
But people will say I’m too expensive!
Yeah they will. And you are! You don’t want to be a bottom feeder. You want to swim with whales. Don’t worry about what other people price at. Besides, you’ll have products at multiple price points if you follow this method, so you can always offer them a lower priced option.
Social media marketing agency pricing
Create a product menagerie. Have multiple PROFITABLE products at multiple price points.
Work backwards from your target revenue and your capacity.
Define the price first and work out what you can afford to deliver next.
I’ve got some awesome free training down below on pricing, that you can get sent straight to your inbox.