Identifying prices for social media marketing is among the most significant actions a digital marketeer has to make, especially for individuals or agencies in the space. First and foremost, pricing the services not only decides your profitability, but expresses the value your offer represents as well. The actual process of establishing a price takes balancing acts of market worth, sustainable business practices and client value. Marketing services differ from physical products in that products can be priced at measurable costs, whereas marketing services interact with creativity, time, technical skills and strategic thought. When pricing your services, this adds to the already challenging process, as outcomes are often intangible, like customer engagement, awareness of a brand, sales growth and customer loyalty. The digital marketing industry has rapidly changed in the last ten years. Where businesses and brands have recognized that the importance of social media influences online consumers. Therefore, there has been a spike in interest for these specialized services, but there has also been a market oversaturation for agencies and freelancers offering similar services at varying price points. Add the additional pricing challenge of charging either too low or too high to your pricing structure. Pricing at a low cost could be a recipe for unsustainable working hours and value of expertise, whereas pricing too high, may scare away potential clients. The goal is to create a structure of pricing that creates justifications and reasonability for all parties involved.
Understanding the value of your service
Prior to identifying a price, it is critical to appreciate the intrinsic value of our service. Social media marketing is more than posting content online. Social media marketing includes research, planning, strategy, and execution. Every campaign includes objective targeting of audiences, artistic creativity, copy writing, advertising analytics, and improvement on an ongoing basis. Value is created when these services are able to drive visibility and revenue for a client’s brand.
Defining service scope
A key part of pricing is defining what the package contains. Social media marketing can be extremely varied, ranging from content and management to consultative advertising campaigns and influencer relationships. Without a clear definition of scope, misunderstandings can create arguments between clients and service providers, sparking disagreements over workload or costs. By explicitly defining what is included (e.g., how many posts per week, what platforms are managed, which pulses will the ad campaigns be set up) it may be easier for service providers to develop pricing and pricing models with transparency.
Choosing a pricing model
Choosing the right pricing model is also important when it comes to establishing the price for social media marketing services. There are various pricing models to choose from, and different models are suited to different stages of business, or client needs. Some providers will choose to charge hourly, others might choose a monthly retainer or hourly-based pricing. Each model has pros and cons, and it depends on the type of relationship a service provider wants to have with the client.
Considering market rates
Investigating market rates is an important part of establishing a fair and competitive pricing structure. While every provider is individually based on their skill or expertise, understanding the pricing of other industry providers helps to position services effectively. Pricing far below average may help to secure clients at the outset but may create the perception of quality issues as the level of service is clearly perceived as being deficient to a lesser fee. Pricing far above average without a reputation may limit ability to secure clients.
Building long-term pricing strategy
The overall purpose of pricing is to create a buildable structure that is sustainable for the long-term business. It may be exciting to get a quick payoff through short-term strategies, but trying to build a long-term business on quick fixes could lead to unsustainable client relationships, unreliable revenue, and variable scaling capacity. Pricing should eventually position you as a long-term player who is negotiating for business growth, scalability, and market positioning. This means thinking about future capacity and structure, including potential future team members, investment in technology, and/or potential service offerings.
Conclusion
It is not easy to determine pricing for social media marketing services, it is a strategic decision that will have an effect on your long-term success. Pricing should always be based on a mutual understanding of value, clearly defined scope of service, proper selection of pricing models, and market research. If we think of an operational budget, using a realistic rate based on the level of experience will provide a solid number to establish sustainability and ensure fair compensation, and create an entire system and process that is professional and can manage client expectations. By strategically planning pricing, individuals working in social media marketing will establish relationships as trusted partners who are committed to sustainable business success. A well-researched pricing model adds credibility and makes long-term scalability more feasible for you and your client. When you consider all aspects of pricing, you make it more than a financial concern; you construct a firm foundation upon which to build a successful and respected business in the online marketing community.
