September 14

Pricing Agency Services to Maximize Profit & Minimize Pain

"Why don't you write up a proposal to [deliver whatever a prospective client is about to hire you or your agency to deliver to them] with a budget and send it over to me to consider?" 

This one sentence creates more anxiety, angst, fear and self-doubt in the hearts and minds of freelancers, coaches and agency owners around the world than virtually any other. And when you talk to them and ask them why creating pricing proposals for prospective clients creates so much anxiety and angst, they usually offer up one of eight standard responses.

  • The prospect will not provide a budget to scope against
  • The prospect will not provide a detailed scope of deliverables
  • The prospect will only define the opportunity in broad strokes such as "I need a campaign" or "I need a website" or "We need sales training"
  • I'm asked to produce a proposal for a prospect that I'm pretty sure isn't going to hire me, but you never know, and, you never know who they know, so I don't want to be rude and say no
  • The prospect requests multiple rounds of pricing and/or scope revisions before deciding on a final scope/budget that we ultimately contract to deliver β€” usually lower than the original
  • It takes me hours to write every pricing proposal because they're all unique
  • I don't feel confident presenting my pricing to a prospect because I can't always justify how I reach the price for various deliverables in a way the prospect will accept
  • I dislike negotiating pricing with a prospect because I don't want to start a new client relationship off on the wrong foot or worse, make them mad and they decide not to hire me

But what if I told you creating and presenting pricing proposals for your agency's (or you freelancers and coaches too) services doesn't have to take a lot of time, create stress or anxiety in your life and or potentially anger a prospective client? It's true. 

You just have to fundamentally alter the way in which you define your agency's pricing and how you create your agency's proposals for service. In fact, done correctly, you can make it point-and-click easy peasy to quickly create a pricing proposal that offers the prospect not one, but THREE scope/pricing options. And if none of those work, they can build their own by entering information directly into the proposal generator, which then automagically prices and reprices (as they make changes) the fourth, custom proposal scope and budget. 

Interested? 

If so, check out this short video I created to walk you through both the philosophical and systematic changes you'll need to make. I even show you how to build your very own agency pricing proposal builder. The video is 15 minutes long, or you can speed up playback if you like. Heck I sound awesome as a chipmunk! 

Or if you prefer good old fashioned text, I've copied the entire transcript below the video. Happy reading. 

a word of Warning  

While it is relatively easy to build the tool I describe in this video, it DOES take a lot of time to build out the base tool. And then you still have to enter your pricing and rate information. So, if after watching the video you think to yourself, I gotta get me one of these, and you don't feel like spending 20+ hours building your own, feel free to grab mine. I call it the BSGC Pricing Proposal Builder and it's all yours. 

And now for our feature presentation...

Pricing Your Agency's Services to Maximize Profit Transcript

β€ŠHey, are you an agency owner? Maybe you're a freelance designer or copywriter web developer that dreads having to talk pricing with your prospective clients. Well, if that's you today, I'm gonna help you fix that, by introducing you to a Stress Less Profit More agency pricing proposal tool that transforms any agency services pricing discussion from an angst filled negotiation into an anxiety free collaborative budgeting exercise that you and your perspective client can solve together. And I promise you, you'll both be happier for it. 

I'm Tom Martin. Over the last 30 years, I've served as head of business development for multiple agencies. I'm currently an agency owner myself, but during my career I've negotiated tens of millions of dollars of client contracts spanning all sizes and types from huge AOR contracts with global brands like Hilton and Fireball Whiskey, Toyota, to locally owned companies, mom and pops, where unfortunately, project work tends to be more the norm.

So I've sat in these meetings and I've been on pricing calls, and I understand exactly how hard it is for you when you're asked "how much?" To feel really comfortable pushing a big, but in your mind, fair number across the table, and then not blinking. But you know what? If you stick with me today, we're gonna solve that issue once and for all.

But first, if you dread all things selling or maybe you think you're not particularly good at it, be sure to click on the subscribe button and don't miss that bell icon 'cause that'll make sure that every time I publish a new video on all things associated with prospecting, nurturing, and closing clients, you get notified.

Look, pricing discussions don't have to cause your anxiety or create any tension in a new agency client relationship. But the secret to having successful pricing discussions with your clients is really simple. You have to stop framing your agency or your individual offerings as subjectively priced services, and instead, you have to present them as clearly defined products that have a fixed price per unit of that product that a client wants to buy.

But to do this, you're gonna need a tool. And if you don't like building your own, well stay tuned to the end of this video and I'll show you how to get a hold of the one that I've built and that I'm gonna walk you through today. I call it the BSGC pricing proposal builder, and frankly, clients have told me it's a magical tool that not only removes the anxiety from a pricing discussion, but it actually makes it easier to close clients when you get 'em to that point.

Now it does this by shifting the focus from a subjective negotiation of how much a various individual deliverable should cost into a transparent budget allocation discussion, if you will, where you're gonna maximize that allocation across a menu of potential deliverables that they can hire your agency to perform.

Now normally, we don't really know how much it should cost. We're looking to you, you're the professional. You know, tell us, and really that's the first major problem, with how you're handling proposals now. And I'll get back to this in a minute, but first, let's go to the second major problem with how you're probably handing your pricing proposals today.

Being the good agency or freelancer that you are. When you're asked to give a proposal, you respond with a proposal. But, that's where you run into the problem because you give them A emphasis on the singular pricing proposal. And this is what really starts to create major issues for you, as an agency or a freelancer.

First, without a budget and a scope, there's really no way you can provide a truly accurate proposal that achieves that client's goals while ensuring that you can profitably deliver those goals. I'll come back to that in a minute. Second, because you've never been given a budget. And you have a really only, a very vague idea of scope, you're basically shooting in the dark. They've backed you into a room and they've said, Hey, here's a dart. I want you to try to hit this imaginary dartboard, and I want you to hit the bullseye on the dartboard. Only you can't see either the dartboard or the bullseye. So you take a shot, you throw the dart, and as we all know, you never hit the bullseye.

And you know, clients will do this. They'll tell you, Hey, you know, we're ready to spend whatever it takes. You know, we don't really have a set budget, but you know, come on, that's all BS. I've been doing this for 30 years and I've never met a company that has unlimited budgets or can just set them as they see fit.
So there is a budget. They're just not sharing it with you because frankly, that gives them power. I mean, let's face it, by the time you get to the pricing negotiations, you're pretty far into the process. You've invested a good bit of time, money, your effort, so you're kind of loathed to waste all that effort and lose, and you can see it, you know, right there, the win.

It's right there on the edge. All you gotta do is get over this last hurdle and you've got a new client, a new project. So you do what everybody does. You sharpen that pencil as sharp as you can get it, and you put forth your very best number, and it's almost always too high. And in those few cases where it isn't and they say, oh yeah, great.

And they sign, your first response is, oh, I left money on the table. What was I thinking? Why didn't I charge more? And what's really funny is those clients, those ones that sign immediately where you feel like you left money on the table, there's this incredibly interesting correlation between losing money on projects and clients and those kinds of clients.

And the reason that happens is because you allow your fear of losing that prospect of not converting them to a client or a project override your desire to make a profit. That has to change. Now, but the vast majority of the pricing proposals you're gonna submit, you're gonna send it over and the negotiation dance will begin because the client's gonna focus on the only variable that's available to them.

And that is a line item price for, or maybe the hours associated with a particular deliverable, right? And it's funny, those prices always seem high to clients and a lot of people say, companies and agencies we work with will say yeah, it's just client negotiation tactics. And there probably is a little bit of that.

But I honestly believe that clients just really don't know how long it takes to do things. They've never lived in a world like we do, where you have to track your time and how long it takes you to do something. They don't understand like, how long does it take to write a memo? How long does it take to write an ad or code a website?

They have no concept. So here you are, you've presented this fair proposal that hopes, that you hope is gonna allow you to serve the client. You're gonna make some money, but immediately you're being asked to negotiate against yourself, right? Because hopefully there's not another agency that's, that they're pitting you against, but you're negotiating against yourself because you're still trying to hit that elusive bullseye that you still can't see.

Sound familiar? I know I've sat in that meeting a hundred times. I've had that discussion more times than I care to count. And it's because of this frustrating process that you feel all this anxiety. It's why you detest these whole pricing conversations and contracting conversation. And in some cases, honestly, even the clients, don't really care for 'em because it just sets everything up as me against you, us against you kind of thing.

And, that's just not productive for anybody. But the truth is, you're doomed to continue dancing like this because neither you or your client has a tool to fix the problem that is vague scopes and budget targets until now, because see, the BSGC Pricing Proposal Generator solves both of these issues for you.

And it does this by helping you quickly and easily produce not one but three different scope and pricing options, no matter how vague the scope or frankly how invisible the budget and best of all, you're not gonna feel an ounce of anxiety building your pricing proposal or walking that prospective client through it.

But yeah, there's always gotta be a but. Right? Here's the bad news. I'm pretty good at Excel and Google Sheets. In fact, I actually won a Lotus 1, 2, 3 competition my sophomore year in high school. I. Which tells us two things. One, yes, I'm that old, and two, yes I was, and may still be that big of a geek, but with this bad news, there's also some good news because while you can certainly build this tool yourself, and I'm gonna show you how to do it at a high level, it's gonna take a lot of time.

I would say, conservatively, mine probably took me anywhere from 20 to 25 hours and I'm still, improving mine over time. So you can do it, it just may take you a little time. However, if you stick around to the end of this video, I am going to give you a chance to just go to my website and grab mine.
And if, hell, even if you don't feel like sticking around, you've said, wow, I think I need one of those. Just drop a comment and tell me how I can get ahold of you and I'll send you the information you'll need, to get your own copy of my BSGC pricing proposal.

Now for those of you who wanna stick around, lemme walk you through the process of building and using a tool like this. So step one, you have to create your own BSGC pricing sheet. And you can, like I said, you can use Excel or Google Sheets. They both work. I've done it both ways actually. I need you to go in and you're gonna load what it typically costs you to create or deliver whatever it's, you sell clients.

But make sure you include things like client meetings, status meetings, phone calls, reading, replying to email. You can put those under just like an admin modifier. That's what I tend to do. Or you could call it out as an admin product. Meetings are the one thing I will actually call out as a product because some clients will say, oh, we want to meet once a week.

Well, that's great, but as we all know, there's a cost to meetings, especially if they want, you're an agency and they want, the whole team there on the call or in the meeting. Those meetings get really expensive, really fast. The important thing here is that you have to productize your offering.

So when a client asks you how much it costs to create, let's say, a social media post, you're not gonna say It depends. You are gonna have a fixed cost based on known parameters. So for instance, you might have a cost for social media posts that use, client supplied imagery. you might have a second cost for one, where you are using stock images, and maybe it accounts for the cost of a stock image.

And you might have a different one for posts that are created with custom photography. And somehow maybe you've worked in the cost of acquiring that custom photography. So you would have three different pricing levels for social media posts. And that pricing is gonna be based on an average of your historical cost to produce each type.

Then you can do this for each and everything you could potentially sell a client. Okay, so this is mine up here, and as you can see, it's extremely detailed and it's honestly growing all the time. And then the next time you're preparing a pricing quote, you're gonna open your BSGC template. And in the left column, you're gonna start selecting the various deliverables that are needed to deliver whatever it is they're asking you to produce for them.

So for instance, if you were asked to build a website, you would start adding in all of the finite deliverables and outside costs associated with building a website. Then under this GOLD column, you spec out a Macdaddy website, right? Have lots of pages, multiple forms, multiple light boxes. It'd be great.
Under that SILVER column, you'd spec out something more akin to maybe the website they have today, or that site plus maybe some enhancements, that you've discussed. And then finally, under that BRONZE column, you're gonna spec out the down and dirty version of a website, the cheapest website you could ethically produce for them, and not feel like that, you're stealing their money or building them a worthless website.

Now, once you're done, I would encourage you to consider listing additional services that would make sense for a client to consider it makes sense for them to consider, in order to maximize the investment of let's say this new website, even though they didn't specifically ask for it. So that might be like SEO or SEM services, upgrades, whatever it might be.

Again, you'd probably list all those under the GOLD, 'cause that's the Macdaddy. You might put, I don't know, half of 'em under SILVER. And you might not put any of 'em under BRONZE 'cause that's your, that's your down and dirty option. And now your pricing proposal's finished right? Super simple, super easy, didn't take you a lot of time.

And step three, you're gonna send that finished pricing proposal to your client with instructions for how to use it. Or better yet. And this, I would encourage you to do offer to walk 'em through it face-to-face or maybe over Zoom, because that way you can explain to them, Hey look, this is how this works.
You know, this is what is meant by BRONZE, SILVER, and GOLD. And then you can probably say the single most important thing you're gonna say in this entire process. And you absolutely should tell them this. Hey, nobody ever really buys BRONZE, SILVER or GOLD, while I have shown that to you, it's. If I've gotten lucky, if I've thrown the dart and I've hit the invisible bullseye, awesome.

Great. Let me know. But if I haven't, don't worry about it. Okay. Because what usually happens is clients start looking at these and they start seeing different combinations, that really represent, really kinda maybe more what they're looking for, true value in their eyes. And that's really what the CUSTOM COLUMN is for Mr. Client or Mrs. Client, you know, here's what I want you, I want you to go into the CUSTOM COLUMN and then show them how that they can. Double click and they can start to select, you know, how many units of that individual product or that individual deliverable that they would like, right? So for like the web site, it might be total number of pages, or it might be total number of templates, or it might be total number of light boxes.

And, and they, point out that look, you can change the inputs, as much as you want. And every time you change 'em, the totals for the proposal under the column for the Custom Column, it's just gonna update automatically. Right. So have at it. Knock yourself out. Feel free to do as many what ifs as you want, but as soon as you feel like you've reached the perfect scope, and budget combination for you, great.
Just stop. Send that over to me. Let me know, and I'll bake that scope and pricing into our contract and then send that over for your approval. And folks, this is where the magic happens, okay? This is where the, you're gonna realize the very first time you use this BSGC approach, you're gonna realize, wow, I'm not negotiating.

I'm really not. Instead, I'm having this really high quality face-to-face, or maybe virtual discussion with my client prospect, and I'm walking them through these various options to achieve what they've told me they wanted to hire us to help them achieve, but I'm really just guiding them versus selling them.

But more importantly, because you're telling them to treat the first three columns as a menu, and you're encouraging 'em to pick and choose what they want, they'll feel like they're buying what they want to buy versus what you might be trying to sell them. Okay. They're gonna feel that same, Hey, he or she's not trying to sell me something, they're just trying to guide me through this tool that they use, and I get to decide what I wanna buy and they, it gives them the feeling that they're also deciding what they want to pay.
Even though that's not true, because you've already pre-programmed that. Right? But you'll also discover this, not once in this process will you end up discussing how much an individual item costs. I've never had that happen. Instead, what happens is you spend all of your time figuring out, Hey, how do we best invest this limited budget to achieve the maximum impact for what it is we're trying to do?

And that's it. A simple tool, an even simpler approach to free you forever from the dread and anxiety associated with pricing your services for clients and prospects. And if you wanna try out this in Nirvana for yourself and just head over to my site, grab my BSGC Pricing Proposal Builder Template.

Did you find this helpful? If so and you're a first-time reader, why not consider subscribing so we can stay in touch? Of course, you can break up at any time if you don't like what we send πŸ˜‰.  Till next time. 


This post was originally published on Painless Prospecting, the weekly sales and marketing blog created by the fine folks at Converse Digital. If you want to learn how to create, engage in, and convert conversations into new clients and customers, give them a call


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ad agency, Ad Agency Business Development, B2b Sales, B2b Sales Prospecting, negotiating, pricing, social selling, social selling agency


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