Getting started : setting your digital marketing freelancer prices
COVID-19 did not only change our present, but it will also change our future and in particular the way we work. New societal habits with a more flexible work approach (Yes, I am in my PJ’s writing this right now”), and the development of new ways of learning such as self-taught digital skills mean that we are seeing an increasing number of digital marketing freelancers and agencies.
In this competitive environment, it is rare to find agencies and freelancers that will share their prices, or even have an honest discussion about it. It is also pretty common for potential clients to discuss rates, often deemed as “too expensive”.
Setting the right prices for your service is an essential part of any digital marketing freelancer’s success, so let’s explore a few tips and tricks on making sure you can boost your value to the potential client’s eyes, define the mission and scope correctly and finally the different strategies to set up your prices.
Boost your perceived value
First and foremost (and just like any other professions but more so in the digital world) you have to be your most important client. Easy to say, more difficult to do when you already have a jam-packed week. However, you have to keep in mind that, just like a window-shop, your socials and other digital presence reflect your expertise and are an instant representation of your value for the potential customer. Regardless of your speciality in digital marketing, potential customers will have a hefty amount of competition to choose from, and you have to stand out by being your own brand and spending some time in your workweek on developing and most importantly fuelling that.
Attracting people that understand your work is one thing, but creating the demand is another. Unfortunately, there are still many people today that do not see the direct benefits of inbound digital marketing. Sophie Edwards sums it up well in her article The 3 Reasons Why People Don’t Use Internet Marketing : “They either don’t understand it, don’t believe In it or can’t afford it.”
Keeping in mind those objections aligned with your digital presence strategy, putting out informative content, explaining how your service can be placed on the value chain of your customer’s product or service, will be highly beneficial and help you attract those that did not even know they needed you.
Aligned with this content, and to target those that do not completely understand the technicalities of your service, it is important to add concrete numerical (if possible) results to make sure the outcome for the business is understood and visualized. For example, in your most recent project: which KPIs did you improve the most, by how much, and any industry key (and shock) figures you can share. Even details as simple as timelines will help this general understanding. For example, when a customer is looking for an SEO service, it is important to discuss the potential timeline and the fact that results might not be seen on day one.
Defining the work to be done
Clearly defining your mission is just as important: What goals do we want to set for this job? Are they attainable? Define a clear scope for your mission and have the customer stick to it. This helps make sure that you are pricing your work according to the flexibility you will have to have, or the concrete goal decided together.
A client might want to achieve a jump in followers, you would agree together on 1,000 and then price the job accordingly. Now, fast-forward a couple of weeks and you have achieved this goal, but your customer is not happy because they did not achieve extra sales from this increased following. This means there was either an issue with understanding your work (no magic can happen thanks to social media if other digital marketing levers are not also actioned such as SEO, a clean UX experience etc) or setting up the scope of your mission: did the customer assume that you were also going to action those levers to create a jump in turnover? It would certainly not have been the same price for you to do so.
The different pricing models
After defining your service and the scope of the mission, it is now time to price it and there are several pricing models available. The main difference will be pricing by time or by services.
Within both of these you will then have different options :
This is where the definition of the scope of your mission is crucial when deciding between the 2 different main techniques of pricing. If you are on a project with a very well defined goal and scope, for example creating a logo, then you might want to price per deliverable. However, if you need to be more flexible and you know the scope might expand then it is more advisable to use a time billing structure, for example the design of an app.
Both will also depend on your client type: time billing is more common and could be what clients are more often used to (for example, if they are asking for a service they usually do internally and want to compare to what they pay their staff). However, deliverable billing offers a certainty that might be valued for certain clients depending on the sector or size of the company.
Finally, it also depends on you and your time management. If you are quite a fast worker and you know you might be producing something in half the time of your competitor then you might lose money by pricing per time spent on the project. Conversely, time billing could incentivize you to be less productive and therefore penalize the customer if you are pricing by the hour.
Pricing by services also has its issues: you could be underestimating the time for a specific project or have elements out of your control that will impact the results which means that you will not be able to provide what you initially had planned to deliver. Revisions and changes from the customer might also create extra unpaid workload.
Finally, you could also turn to alternative payments such as equity, a percentage of the profit you generated etc. One tip for these is to make sure everything is properly defined in the contract to avoid any potential issues.
Whichever structure you decide to go for, you will most likely need time and a few initial projects that will help you gauge your productivity, the market, and the different types of customer personae and how to get an honest pay out of your work.
Because honesty is key here, you could price a customer according to the budget they have or you could do it according to your honest review of the task at hand and your capabilities.
Now, does everyone use honesty as a starting point for pricing? That’s another discussion that would take longer and probably a glass of wine or two to discuss ….
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Strategy Management. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminate the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DSM.
