Pricing – More Fees to the Agency, Less Money to the

MediaKimberly Koehly

Back in the Black: April 28 – 29, 2011

What You Will Learn

• How to best position yourself [and your agency] as qualified digital marketers

• How to leverage the planning process to achieve buy-in in advance

• How to price based on value rather than cost

• Why it is important to your agency and your clients for you to know your strengths [and therefore your weaknesses]

It’s not YOU, It’s THEM

Lay the Groundwork

• Educate, educate, educate– See Uncovering Opportunities slide 14

• Share success stories & case stories

• Join Digital Industry Organizations – And Participate!

• Make certain your staff understands your digital strengths and can speak to them [with your clients]

Digital Budget Guideline

• GOAL - 20% of total marketing budget allocated to digital*********– *********NOTE: This could be drastically

underserving your client’s objectives depending upon said objectives and total budget

Strategy vs. Tactics

• Create the Digital Marketing Strategy WITH your client– Facilitated session(s) with key stakeholders to

define objectives and achieve buy-in

• Deliver a plan that meets objectives and budget parameters defined– Agency versus Media fees will be irrelevant

Real Life Example

Paid Media

Earned Media

Social Media

Niche Media

I’m Sorry…

Cost Pricing

• Use with CAUTION!

• Know the hourly value of your team

• Get input from the assigned resources

• Beware of Scope Creep!

Value Pricing

• To run and maintain a healthy business, a seller (the agency) must earn a profit on every transaction.  But the buyer (the client) must earn a profit as well. This is the essential nature of value creation.

Questions to Ask [Yourself]

1. Where are we delivering on the client’s value chain?

2. How important is this to the strategic objectives of the client?

3. What is the financial impact of the desired outcomes?

4. What is the client’s cost of not solving this problem?

5. What level of talent and creativity will be required?

6. How complex will this assignment be to manage?

7. How time-sensitive is this assignment?

8. What kind of resources (time and effort) will be devoted by the client?

9. Will we be creating long-term value for this client?

10. Who will own the intellectual property?

11. How much risk are we willing to take?

12. To what degree are we uniquely qualified for this assignment?

Charging a Premium Price

• Fixed price vs. variable price

• Service guarantee

• Pre-authorized pricing

• Customized payment terms

• Risk along with reward 

• Ownership of intellectual property

Industry Benchmarks

• AGI

• Margin

• Net Income

Resources

• AAAA’s paper on Digital versus Traditional– http://ams.aaaa.org/eweb/upload/catalog/pdfs

/MG18.pdf

• Ignition Consulting Group

• Implementing Value Pricing, by Ronald J. Baker

My Details

• Kimberly Koehly

• kimberlyk@thewhalehunters.com

• 602.722.0149

• @kimberlykoehly

• http://www.linkedin.com/in/kimberlykoehly