I work constantly with agencies that are smack in the middle of pricing issues. It seems that no matter what price they assign to a project, it is never low enough for clients. Does this sound familiar? The client wants you to submit a multi-line quote with every detail in place. Also, they often want to negotiate not only the bottom-line price, but the component parts as well.
I can only advise you on this issue, because you must ultimately make your own decisions on what business you want and at what price you are willing to sell it, but let me be a little bold here:
I believe price has almost nothing to do with your success in dealing with clients and prospects. In fact, in many cases, the higher the price you charge, the more successful you will be.
There are countless examples of companies who charge more than others for essentially the same goods. For example, why is American Express able to charge more for their card than Visa or MasterCard? Why do Coach purses cost more than other brands of real leather handbags? Why are most consumers willing to pay more for a Michelin tire? Apple built a global empire by refusing to play the competitive pricing game with PC rivals. The reason higher pricing was successful in all of these cases is brand cachet. Obviously consumers think there is justification for the extra price on certain items so superficially similar to others in the marketplace.
This response to brand cachet is a strong enough compulsion with many buyers for you to utilize it. Why not position your agency as “expensive but worth it,” rather than “willing to negotiate anything”? There is a psychological advantage in being—and working with—the best.
I really feel you can take this position and make it work for you. Give it a try with your next prospect or client. I’m not asking you to make a wholesale change in your pricing strategy; just try it on one prospect. If it works and you establish yourself as expensive but worth it, you can expand the pricing strategy and significantly increase your billings and margins.
You need to be a little bold if you are going to succeed in life. Thoreau said, “Most men lead lives of quiet desperation.” Make sure you are not one of them.
Oh yeah… about that multi-line quote. Tell the client “Our agency only puts forward bottom-line pricing on projects.” Tell them there is a unique combination of in-house creative, outside vendors and services that only your agency can offer in just this way. If they are interested in what you have to offer, they must accept project rather than line-item pricing. You would be more than happy to negotiate the bottom line, but not the component parts.
Who knows, maybe it will work. I know one thing for sure. As you become more confident of your agency’s value, you will be able to charge more for your services.
