Here are the 8 most popular search terms yesterday for this site:
So it’s pretty obvious that companies are looking for information on how much they should expect to pay for social media services. If that’s what you are looking for, then you should definitely check out this post on how much you can expect to pay for social media services.
After looking at those search results (and I get similar results almost every day), I decided I needed to write another post about the cost of social media services. But this time, I wanted to talk about ways that you can LOWER the cost you pay for social media services from consultants and agencies. While I try to charge a ‘standard’ rate as much as possible, there are a few variables that go into my pricing that I wanted you to consider when attempting to get a price on services for your own business.
1 – Have plenty of company and market research on hand before asking for prices. If a company approaches me about creating a social media strategy for them, the first thing I am going to do is begin researching them, their company resources, skill sets, etc, as well as their market and who they want to reach via social media, and how their competitors are using social media. Obviously, if you can have some of this information on hand, it means I will need to spend less time on research, and that means you pay less.
2 – Be able/willing to handle most/all the execution yourself. This can be a BIG money-saver for you, but comes with the caveat that you need to be in a position where you CAN handle the execution of a social media strategy. Not every company is, and most need at least some heavy hand-holding at the start. But the more of the execution and content creation you are willing to perform, the less money it costs you. Would you rather pay me $150-200 an hour to train your 4 bloggers on how to create content for your blog, or would you rather pay me $150-200 an hour to do the work of 4 bloggers? Yeah, that choice is obvious.
3 – Connect with me, or have a friend connect us. I am always getting referrals from friends and people I have met, and I always try to give these companies a discounted rate if I can. And if we have a prior relationship, even if it’s just having met at a conference or event I spoke at, I will want to give you a break on pricing if I can.
4 – Have a long-term project. I tend to discount rates if the project exceeds 3 months, simply because that will be a source of income for a longer time-period. Also, over the life of a longer project, the amount of work required at the end of the project is usually less than the front, so that lowers the cost as well. BTW this also applies if you hire me to speak at your event. The hourly rate I will charge for a 1-hour session is probably double the hourly rate I would charge for an all-day training session, for example.
5 – Pick a time when business isn’t as busy. This one is tricky and usually just comes down to pure luck. However from my own experience, business is usually a bit lower for me from around October – March. That’s usually when I have some ‘bandwidth’ available to take on extra clients, and can give the ones I do, a better rate.
6 – Have a cool project. This is also tricky, but if I really love the ideas you have, I will probably be willing to cut you a deal on price to get the work. For example, if you are a mid-sized to large B2C company that wants to leverage social media to connect with your brand evangelists, I can almost guarantee that you will get my best rate, and that I’ll make every effort to take on that project, no matter how busy I am 😉
Anyway those are some tips for you, and are from my perspective, if you talk to another agency or consultant, they could have a completely different set of criteria. But in general, the more work and execution you can handle yourself, the less your costs will be. Hope this list helps! Oh and BTW if you are interested in working with me on a social media project for your company, please email me!
Mack, I think #2 and 4 are great advice. And altough they have been made many times before, these points are rarely driven home. Not only are they crucial for saving money, but every company or individual looking to enter social media needs a long term strategy and MUST be prepared to do most of the work themselves! Even though your social media consultant will make more $$ if they are creating or publishing content for you, your social media goals will never come to fruition if you don’t engage directly yourself! I have seen many social media “campaigns” fail because the client was not able or willing to execute the plan laid out by the consultant.
Great post, a must-read for anyone looking to spend money on social media assistance.
Analisa I agree, #2 especially is key. This is why I stress that companies don’t hire me to create the content for them, but instead let me TRAIN and TEACH them how to create the content themselves. Seriously it’s either pay me $200 an hour to create 10 hours worth of content ($2,000), or pay me $200 an hour for 2 hours ($400), so I can train 4 employees so they can create that content themselves (at a rate of $20 an hour).
This isn’t rocket science 😉
And some companies simply don’t want to handle it and want to outsource everything. That’s fine, but I try to make sure they understand going in that it will cost them more money that way. As long as they get that and still want to outsource, then that’s fine.
Awesome post Mack! Indeed, social media services are all over the place in terms of price. It’s SO wonderful to see you spell out options for businesses trying to decide and make smart choices. As a consultant/producer I appreciate how well you spelled these out. You’re fantastic! See you on Sunday night’s #blogchat!
.-= Deana Goldasich´s last blog ..6 Ways to Beef Up Your Blog With Images =-.
Thanks Deana! With both this post and the post on pricing social media, I kept thinking ‘Do I really want to put this out there?’ But in the end, if it helps companies, then that’s the type of content I need to be creating.
I think it shows transparency and honesty at its best, Mack! Kudos all over!
.-= Deana Goldasich´s last blog ..6 Ways to Beef Up Your Blog With Images =-.
Interesting article… some thoughts your post triggered, formed by my experiences as a consultant.
1. Company / market research – why not include this as part of the requirements gathering / proposal pitching process? Until I know quite a bit about an organization’s culture and structure and its goals / business strategy in the short and long term, I can’t write a proposal that actually demonstrates value to the prospective client.
The competitive analysis is generally deliverable #1 in an engagement – without data to back the strategy, I’d be creating business fiction – interesting, but not grounded in reality. I use multiple third party tools to collect and validate data – using client data can bring costs down, but it can also introduce data collection bias. How good is that data then? If the data isn’t good, the strategy won’t be the optimal strategy either. If a client insists on using their data, I will with caveats but I always explain why the outside perspective is so valuable.
2. The in-house execution strategy: Mack, it may not be on strategy for the organization to have execution in house. Why not offer your clients the option to work with you and a team, where you’re the engagement lead managing some junior content creators? Everyone wins – copy writers can be had at $75 – $150 / hour. You give them assignments with the client requirements and it brings down the cost for the client AND they don’t need to have the human resources in house. They get the business value of a social media strategy without the ramp up time. This is why they pay for agency expertise.
5 – Off season rates – Obviously you should offer the most competitive rates possible, but why not focus on the value for the client? If I can demonstrate an increase in leads and / or increase in sales tied to my efforts, both the client and I are happy with my rates.
3 and 4 and 6 – I can’t challenge you on any of these points – I think they’re spot on. Generally, great relationships in business allow for more leeway, including on pricing. 😉
Thanks for sharing your thoughts on pricing – at the end of the day, only when a client is successful is the consultant successful.
.-= An Bui´s last blog ..Six Post-Marketing Profs Digital Marketing Mixer Recaps =-.
Hey An 😉
1 – There always going to be research, internal and external, that needs to be done. But if the company has all its data in place (even if it’s simply resources available), then it will help to a degree, and save them some money.
2 – An I think we are actually in complete agreement here. I prefer to handle some/most of the content creator at the start, and use it as teaching examples to the client so they can get up to speed. But I prefer to let the client know that if they hire me to create the content and do NOT let me teach them how to do it so they can eventually take it over, that it WILL cost them more money, as they will be in a perpetual state of outsourcing the content creation. If they are fine with that, then fine.
5 – I think we are in complete agreement here as well 😉
Just wanting to be clear, Mack 🙂
Regarding #1, I still think it’s important to validate data, so that should always be included in a project. Even if a company has all of its data in one place, that data still needs to be validated. Who better than an objective third party to validate the data?
Regarding #2, even if a client takes content creation in house, it will still result in increased spend, especially if they need to hire someone for you to train! The question becomes do they want to hire a 35k / year junior person who can’t optimize for results right away based on program feedback or do they want to hire an agency / outsource the content creation?
If they have someone who’s being underutilized from an HR perspective, then it becomes a question of using underutilized resources which doesn’t necessarily mean increased spend. It just means that operationally, they were over resourced and unable to leverage that to create business value. It’s really about how to allocate that cost, because a new program always means a new cost center… leading to a new profit center, if all goes as planned.
I definitely try to keep my costs down for clients, as much as possible. Data validation is just one of those things I think people skimp on because they can and to save money. However, what if you actually drill into the data and see things that are non-intuitive? Those insights provide a lot more value than operating under anecdotal evidence and assumptions which may or may not be correct. If they are correct, then no harm, no foul… but are you leaving value on the table?
You and your client can’t know the answer to that question unless you validate your data against a second data set and test your hypotheses!
.-= An Bui´s last blog ..Six Post-Marketing Profs Digital Marketing Mixer Recaps =-.
An, still agreeing with you completely on #1 😉
As for #2, the client will save money by doing the content creation themselves as opposed to letting me handle it UNLESS they are paying their employees over say $175-200 an hour. Otherwise, it saves them money to handle as much of the content creation as we agree they are able to handle.
We are still in agreement 😉
I almost always encourage clients to produce their content in house. Certainly, it can lead to a large up-front investment, but in the long-run the client weaves their own voice and tone into their DNA, can act instantly to breaking news and can be more transparent. I believe teaching a client “to fish” wins out in the long-run, but has to be weighed with their resources, culture, etc. Recently covered the concept of hiring a “Blog Producer” to kickstart efforts and ramp down as the company takes hold of its online presence: http://www.wellplannedweb.com/2010/03/outsource-blogs/
.-= Deana Goldasich´s last blog ..6 Ways to Beef Up Your Blog With Images =-.
I love that you listed the research part. This can be very time consuming and having a list of their websites, sales pages, social media accounts will save a ton of time. A list of who they feel are their competitors is extremely helpful as well.
Great post Mack. These cost saving ideas can be used by clients seeking other services as well.
.-= Heather Villa´s last blog ..If you are successful, you suck! =-.
Exactly Heather. This is the point I was trying to make to An, and I obviously wasn’t doing a very good job of explaining myself. It might not be much, but simply gathering a list of URLs from your company’s SM presences and those of your competitors, getting together a list of your resources (human and other), all this saves time, and the client money.
HI Mack
thanks for your insight. I have a question for you. it seems like there is a lot of NOISE out there. Everyone selling something or using this formula to talk and talk to get some attention. But as a new small business owner (closet organizing and Doors.) it looks to me like everyone is talking but no one is listening. How to I commit to the SocMedia path when it is going to take a lot of my companies resources as we are a small band here.
Jenny