It’s safe to say that digital marketing has grown significantly in recent years. In fact, by 2025, the software market for this industry is projected to be worth $105 billion. Whether you’re already a professional in this field or are thinking about making the leap, establishing yourself and remaining competitive are two challenges you’ll likely face.
In this article, we’ll explore the current digital marketing industry landscape and how it might impact you. We’ll also dig into some best practices in regard to pricing your services. Let’s get started!
Understanding the Digital Marketing Landscape and Why It Matters
Digital marketing is an industry that has seen a 16.8 percent growth over the past five years. While this trend data was determined by information collected from agencies, it’s important to note that the freelance sector has expanded as well.
In fact, 45 percent of freelancers in 2019 were offering skills such as programming, marketing, and consulting. This means it’s also become a pretty competitive professional landscape. That makes understanding the nuances of this field all the more important for building a successful career.
There are a lot of different skills and services that fall under this industry’s umbrella. Some common specializations include Search Engine Optimization (SEO), mobile marketing, lead generation, and email marketing.
In terms of employment, things look promising for digital marketers. Keep in mind, the U.S. Bureau of Labor Statistics categorizes this field under broader terms. That being said, the industry is set to grow more rapidly in the next eight years compared to all others.
With such a competitive landscape, it’s important to know what pricing typically looks like for certain services. In terms of SEO, one study found the average rate to be around $150 per hour, with no real difference between agencies and freelancers.
Looking at broader service offerings, agencies based in the United States providing ‘digital marketing’ consulting charged an average of $161.57 per hour. This was roughly $20 per hour higher than prices found outside of the U.S.
Taking these estimates and averages into consideration can help you make some important decisions as you work on setting your own rates. Ultimately, careful consideration of the market and your competition can be significant determining factors in your long-term success.
3 Key Tips for Pricing Your Marketing Services
In order to help you confidently approach the growing field of digital marketing, we’ve put together three key tips for pricing your services. These practices will help you stay competitive and avoid alienating potential clients.
1. Avoid Losses by Charging What You’re Worth
It’s not at all uncommon for professionals to accept salaries well below what they are worth. Whether you work for an agency or yourself, charging for your services should not mean slighting yourself.
Underpricing yourself can bring about problems. It might result in attracting the wrong kind of clientele, for instance. Plus, it can often lead to a higher rate of broken contracts. If potential customers perceive you as ‘cheap,’ they are less likely to value your working relationship.
Not to mention, the less you charge for your services, the more clients and projects you have to take on to make ends meet. You don’t want to back yourself into a corner where you’re working harder than your competitors for less money, even if low prices help you attract leads.
However, there’s also a danger in overpricing your services. If your competitors are offering the same advantages as you for significantly less, you’ll likely have a hard time convincing potential clients to spend more to work with you.
In order to succeed in the competitive field of digital marketing, you’ll need to find the perfect balance between costs your target audience can afford, and prices that will reasonably cover your business and personal expenses.
One way to overcome some of this challenge is through extensive market research. The HubSpot Make My Persona tool is one resource available to get you started:
You can create profiles to help you better understand your target market and narrow down your fees accordingly. Getting inside your future clients’ heads and viewing your services from their perspective may help you find the right balance when pricing your offers.
2. Decide Whether Your Prices Will Be Public or Not
It’s not uncommon to visit the website of a digital marketing agency or freelancer and not find a pricing list. This means they’ve chosen to keep the cost of their services private or ‘by request only.’
There are pros and cons to this strategy. Keeping your prices behind the curtain can often compel potential clients to contact you directly to learn more. Essentially, if this is your approach, it becomes part of your lead generation process.
This can also make some people feel misled, however. If you want to keep your prices private, consider other ways of providing information on how much your services cost. One method is to include an interactive calculator on your website for custom quotes and budgets:
Of course, you can always use a straightforward pricing table on your website and make your rates public. If you’re concerned about locking yourself into a project that balloons out of budget, you can develop protective language in your contracts. This way, clients know upfront that costs might be revisited depending on the scope of their needs.
3. Offer Tiered Pricing to Improve Your Conversion Rate
Another way to appeal to your target market is to create a lot of choices when it comes to your offers. You can approach your pricing options as modular, stackable, or in packages, for example. This means customers will be able to mix and match services to get what they need at the best rate.
This is appealing to leads because it gives them the freedom and control to pick the features they need and leave out what they don’t. Additionally, offering deals for agreeing to the annual renewal of certain services can be a big win. This is especially true if you want to build streams of recurring revenue.
Offering hourly rates for a variety of services might also appeal to customers with smaller budgets. Again, honing in on your target market will help you determine if this is a smart choice for your business. You can determine your ideal hourly rate using industry salary benchmarks and this simple formula:
Establishing a highly-structured retainer fee is another option you can give clients who may have an undetermined amount of ongoing work. This can help you build a consistent income that does not rely on project-based or hourly work.
Conclusion
To remain competitive in the digital marketing industry, learning how to appropriately price your services is important. It’s good to remember that undercharging what you offer is not necessarily a wise practice and can often send the wrong message about your business.
Do you have any questions about pricing your digital marketing services? Ask away in the comments section below!
Image credit: David McBee.