How Fixing Client Analytics Can Help Agencies Sell More
A completely accurate client analytics account is few and far between.
That forces you, brave agency veteran, to roll up your sleeves and try to make sense of the chaos you’re looking at for each unique scenario.
You didn’t plan for it. You didn’t charge for it. And now, if you don’t fix it, you’ll face an uphill battle in trying to prove the resulted you delivered.
Like it or not, addressing this issue head-on and fixing client analytics can help you sell more, and sell more profitable work.
The Problem with Pricing Digital Services
Most clients have no idea what we do.
They pay us – very well in some cases – despite not truly grasping how we’re going to deliver the goods for them.
Sure, they might grock the buzzwords a little bit. They understand the jargon and the high level perspective. But it’s mostly a superficial understanding.
When you get down in the weeds, and start describing how exactly to get from A -> B, you start to lose them a little as glazed over eyes stare back at you.
That’s not a knock; it’s just reality.
In the same way you probably could care less about what’s wrong with your car engine and how a mechanic is going to fix it. You just want to know if you’re going to be able to make it to Happy Hour in time this afternoon.
More often than not, clients are paying us based on trust. Or a leap of faith. Or our smiles and fashionable clothes.
And when they don’t fully grasp the full context of their problem, or the work involved in each painstaking individual step you have to take to fix it, they gravitate towards the one thing that’s easy to separate you from everyone else that says they do exactly what you do: price.
Cue competitive bids and escalating downward pricing pressure.
So what do you do the next time around?
You piece together a meager cost plus estimate that rarely includes Profit (and you’ve undoubtedly underestimated Project Management), double check the marketplace, and rush it out the door.
In contrast, the best, most profitable agencies use value-based pricing. Instead of starting with what their internal costs might be, they start with forecasting:
- The new revenue a client can generate, or
- The cost savings a client might see as a result of working with them.
For example, you can take a look at their historical averages of traffic and leads. If you’re able to come in and bump that conversion rate by 10%, 15%, or even 30% over the course of a few months, what does that look like in new revenue based on their average customer value?
Boom. If simple conversion tweaks and changes can lead to $40K-$160K+ in new revenue, there’s MORE than enough room to pay you 20-30% of that.
That covers your software, payroll, meetings, and then some. You can actually scale a business on that.
Even better, is if you can show how increases in results – less your agency costs – results …read more
Source:: Kiss Metrics Blog