Most marketing companies have a smoke and mirror approach to pricing, yet it is one of the first questions I get asked by small business owners, and as I’m all about being upfront, fellow marketing consultants probably won’t like me for it, but if you’re interested, read on.
As a small business owner, every penny counts, so it is vital you are getting the most bang for your buck in appointing a marketing consultant, but hardly anyone is upfront about pricing their consulting services without having meetings and giving you the hard sell first.
There is a reason for that, most consultants will base their pricing on one (or a combination) of three ways:
- Hourly rate
- Fixed Project rate
- Retainer/subscription based rate
Regardless of the pricing model in play, they will look first to determine just how much work they will need to do for you before they wave their magic wand and pull the price out of the hat.
If they know what a project entails, then it is much easier to multiply the number of hours by the hourly rate, add a small % buffer for unforeseen time costs, and there is your final price.
So what about the numbers I hear you ask?
Well, consultancy is a service that should be delivered by seasoned professionals who have achieved a certain level of acumen, hence the numbers will vary depending upon the credentials, experience, and abilities of the individual consultant, but expect to be paying anywhere between $100 and upwards of $500 per hour for someone worth their salt.
Remember consultants working with some big firms will charge 2-3 times these amounts.
Similarly, tactical marketing folk with little strategic understanding and self-styled 'marketing experts' looking to earn money freelancing will typically charge somewhere between a shilling and $50 per hour 😉 - It is important to note that experience levels and abilities vary massively.
With this in mind if the clock is ticking the bills could soon escalate out of control, hence my approach of standardizing my marketing consultancy offering and working on fixed project rates or timelines where possible so the client is aware of the total cost upfront.
I also try to front-load the relationship with new clients by offering my time free to provide valuable, actionable advice and insight before even quoting for my services.
Now you have picked yourself up off the floor, consider this: As an expert at running your small business you try to source more leads yourself by networking, throwing two grand at advertising and the same into your business website, so you’ve spent upwards of $5,000 on marketing, why should you consider adding another few grand by bringing an external marketing consultant into the mix?
Let me share this with you, then you can decide...
Company A spends $5,000 on marketing and ads that bring 10,000 visitors to its website. They have a 0.5% conversion rate, meaning of the 10,000 visitors, 50 will be converted into sales.
The average sale value is $200, so in this case, Company A will generate $10,000 of sales revenue. Not bad.
Company B spends the same $5,000 on marketing, plus $4,000 consulting fees on a marketing consultant who helps create a marketing plan and advises how and where the budget should be allocated to get the best results (getting the right message in front of the right audience).
The synchronized marketing activity yields a modest increase in the conversion rate to 1%. Even assuming the number of visitors doesn’t increase (which in practice it usually does) and stays constant at 10,000 visitors, Company B will convert 100 into a sale, generating $20,000, doubling the income achieved by Company A.
We have covered the cost of employing the consultant 2.5 times over.
This is a hypothetical example, but a good marketing consultant or coach really can have this kind of impact on your business.
Marketing is after all the process of identifying and satisfying the needs of your customers profitably (CIM definition). If you do that better you will satisfy more customers (get more sales) and make more profit.
If you had a brain tumor, you wouldn't trust your hairdresser to diagnose the problem and perform brain surgery because they work with heads all day long. Your head is quite an important part of your body, you would seek a trained, time-served brain surgeon that will fix your problem and make things better.
The same is true with your business.
Good marketing consultants and coaches have grown businesses themselves and can help you finely tune your marketing to yield better results and increase your profits faster.
Equally, spending money on an inexperienced or cheap marketing consultant can be money down the drain because they, like the hairdresser, lack the skills and expertise to deliver real results.
So is it worth it?
I’ll leave that to you to decide.
What I would advise when considering using a marketing consultant is that you test them based on what I like to call the triumvirate of credentials, experience, and ability; each on their own does not a good marketing consultant make, they all come into play in determining a marketing consultant’s worth.
These will range from self-taught marketing “gurus” with no formal training to masters level educated and beyond. I would suggest you need someone educated to at least CIM (Chartered Institute of Marketing) Diploma level so they have a solid understanding of the mechanics of marketing.
There are 2 vital types of experience that small business marketing consultants need, one is in delivering sizeable marketing budgets successfully, and the other, perhaps most important, is the first-hand experience of running and growing a business themselves.
I’ve met countless so-called expert marketers who have worked with some large firms but have little to no clue of the real challenges small business owners juggle daily.
Look at their achievements. Do they have a solid strategic understanding of marketing or are they just tactical marketers masquerading as consultants? Are you looking for someone hands-on to do this stuff day to day? Or are you looking for someone who can propel your business to the next level?
This will influence the level of ability required.
Do they understand the current digital marketing landscape and are they capable of helping you to leverage this in your business?
In summary, evaluate your choice of marketing consultant based on the triumvirate, choose wisely, crunch the data, and demand exceptional results.
Make every penny of your marketing spend count. If all else fails, ask your hairdresser 😉