In today’s fast moving and digitally-driven world of marketing and communications, it can be difficult for small and medium sized service providers to get their pricing models right, says Judith Middleton.
We work in a highly competitive, knowledge-based industry that is not only constantly evolving in terms of the relevant tools and platforms, but also with regards to the metrics for success. As a result, service providers have to constantly evolve and adapt their approach in order to develop sound and sustainable partnerships with their clients.
Understanding the commercial objectives
At DUO, we never approach the costing question with the mindset of simply swopping time for money – which, in many cases, is the default approach. In our industry, I believe that the time-for-money equation is the most direct route to inefficient and ultimately failed client relationships. Instead, I prefer to start with a deep understanding of our clients’ unique objectives, and develop a pricing structure based on very clearly articulated outcomes that reflect each client’s commercial objectives. It follows then, that our pricing model is tailored around specific tactics that speak directly to each client’s mission and expectations. From my experience, this is a far safer and relevant way to ensure fairness on both sides. It requires both the knowledge and insight to recognise what works and what doesn’t, and to tailor the approach – and costing – accordingly.
A key part of this approach necessarily involves growing with a client, and developing a true partnership from the very beginning. To achieve this, I believe that instead of approaching costing from a ‘per-deliverable’ point of view, agreeing on a long-term retainer fee sets the tone for a more transparent and ultimately more productive partnership. There are various factors behind this thinking. For one, business and communication needs ebb and flow – along with the market and the overall business tempo. While a client may be internally focused one month, the next month may require a huge scale up in terms of exposure and visibility. Instead of pricing ‘piecemeal’, it makes more sense to factor in fluctuations and let the natural rhythm of business even out the cost.
Having worked with clients on a long-term retainer basis, I have found that this model removes the formal barriers and challenges to better communication. In the legal industry, for example, where lawyers are paid for their time, clients are understandably reluctant to pick up the phone. In our industry, where instant communication can mean the difference between a failed campaign and a media darling, we want our clients to feel free to pick up the phone and ask for help at any given moment. This naturally fosters a working relationship that is destined for longevity, and for great outcomes.
Looking forward, as the role of marketing and communications within business continues to expand and broaden, I believe that taking a ‘partnership approach’ to pricing models sets the tone for long-term success.
Judith Middleton is CEO and founder of DUO Marketing & Communications
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