Pricing a proposal for a marketing or digital marketing contract is like walking across a tightrope. It’s a balancing act; each factor must be just right to get to the end point - inking a deal with your prospective client.

Set your fees too high and whoosh! Like getting hit with a big gust of wind, your chances of a successful execution are wiped out. You might as well roll out the red carpet for your competitor to sashay in.

But if your prices are too low, you may come off as a cheap, disposable option, and you’ll end up deflecting clients seeking valuable, long-term relationships. If you make a habit of pricing your projects too leanly, your weak profitability could cause your agency to lose its footing down the road.

Your job is to keep your eye on all those factors and adjust accordingly. So, how do you strike the perfect pricing tension without teetering too far one way or the other? There are several approaches to arriving at a price that’s fair to your client and will make you turn a profit.

Pricing methodologies

You have a number of options at your disposal in terms of pricing methodologies, from keeping clients on a retainer to charging per sprint, to setting a daily rate.

Deciding on how to price your proposal can require significant consideration. The key is setting your fees in a way that will profit your agency, and presenting the value of your services in a way that gets your prospective client to sign on the dotted line.

Charge by the day

Charging by the day is one common approach to pricing a marketing proposal.

To come up with pricing, break down the project into daily tasks. Figure out a daily rate based on the number of hours and people required to complete the job.

If some team members aren’t required until part-way through the project, you should account for that in your pricing.

Charging by the day is super flexible, so it’s a great option if you’re freelancing, just starting out, or are going after a project that requires you to be limber.

Agile Methodology

Agile pricing is a functional and simple way to price your marketing proposal. It’s easy to define and manage the scope of any project since it allows you to divide projects down into smaller chunks - known as sprints - then outline and budget each sprint separately.

This method is great for clarifying timeline and budget expectations for your client, in turn preventing “scope creep” (when features, deliverables, or expectations slowly get added to a project without the budget or timeline being adjusted accordingly).

The beauty of the Agile method is that you get paid for every sprint, which means no working for months on end, waiting for your payment.

Sell clients on monthly retainers

Developing an ongoing relationship in the form of monthly retainers has benefits to both you and your client. Retainers can bring stability to your business, providing you with more consistent cash flow each month. With that security, you’re able to build your business faster.

Meanwhile, your client benefits from not having to seek a new agency for every project that comes up. Working with an agency regularly also takes the “surprise element” out of forming a new bond.

First things first: Book a discovery session

Your client should be warmed up to you and your fees before you submit your proposal. The pricing section should not surprise them, or leave them wondering how you plan to get their project done. This is where a discovery session comes in.

A discovery session brings you and your client together to collect all of the intel you need about their business, their challenges, and the results they’re looking for.

It gives you all of the information you need to customize your proposal to your client’s needs and provide pricing that matches the job. Working with the client allows you to write up a more accurate proposal estimate that better meets their requirements, and manage expectations.

Quoting the project

Always consider these factors when determining how to price your marketing services: value, time, and cost.

Value provided can be the hardest one to qualify without promising a result to the client, such as a traffic increase, which can be difficult to deliver definitively. Analyze the value you promise carefully. Conversions or traffic increases can only be determined by looking at your individual client’s resources and capabilities.

Consult with your team members who will be working on this project before signing off on deliverables, timeline, and budget in your proposal. They’re the experts, so you’ll want to have their two cents so that your pricing and timeline are accurate.

Provide options

Talking about money and budgets can be awkward. However, a good way to open the door to a conversation about pricing with your client is to offer choices, ranging from a leaner option, all the way up to the full meal deal.

Be careful not to overwhelm your client with too many options, however. Providing too many options may confuse them, leaving them unsure of what they want, which is a tough mentality to turn around.

Try these three pricing tiers:

1. What can be completed as the bare minimal solution to their problem (aka their MSP).

2. What can be done with the budget they have available.

3. What can be done with their budget, plus a surplus, to really wow them.

Having an open discussion with your client about their needs and available budget will give you greater insight into what deliverables they consider to be mandatory, which are important, and which ones they could live without for the sake of saving some cash.

Conclusion

Pricing marketing projects is challenging. You need to gain the trust of your new client, get a firm grasp on their expectations, convince them you’ll deliver, and find a price that’s appetizing to them and still results in a nice profit for you.

When in doubt, find a pricing method that works for you and focus on your own profitability. You don’t want to become known as the budget option in the market. And if you lose a lead because of pricing, remember that you’ve set your fees that way to ensure long-term sustainability for your agency.

About Proposify

Until now, managing marketing proposals has been a tedious, painful chore. Proposify changes all that. We’re revolutionizing the entire process, from creation to close and every deal-closing moment in between. We’re online business proposal software that gives your team the competitive edge.