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Know what to charge, every time you charge.
Owning your own social media marketing agency is pretty exciting stuff. But cost calculations and profit-and-loss sheets aren’t that thrilling. After all, even after crunching the numbers, how do you know you’re not drastically overcharging? Or, that you’re not charging enough?
Working out pricing for social media marketing services is one of the first things you need to establish when starting an agency or working as a freelancer. But that’s not to say that your pricing is set in stone. You can always modify your pricing after you’ve built up more experience or refined your services. Hey, if you wanted to, you could even tweak your pricing according to which client you’re pitching to.
That said, social media management services can be difficult to sell. On the surface, social media management looks like it’s just posting a few images and videos every now and again! Of course, any social media manager knows that there’s a whole lot more to it than that! Social media management, when done well, requires strategy, creativity, and knowledge about social media algorithms and new features.
A good social media manager should be able to boost a client’s reach and engagement and help them hit their digital marketing goals, from lead generation to increasing conversions and even changing brand perception. And yet, many small businesses think that they can do it all themselves, and may therefore be unwilling to cough up a lot of money for social media services.
Therefore, it’s up to social media agencies and freelancers to carefully present their social media management pricing and packages in order to best illustrate the value that potential clients can gain from it.
Your pricing needs to balance your pricing somewhere between being competitive enough against other agencies while still making enough money to remain profitable.
So, how should you present your social media management services in the best light, with competitive pricing that still makes you money? Keep scrolling to find out!
When you first decide to start a social media agency or start working as a freelancer, thinking about which services you’ll offer can certainly feel overwhelming.
If you’ve already got a background in social media marketing or content marketing, then good for you – this task should be easy.
But if you’re not sure how you’ll position yourself within the market and which services you’ll specialize in, you’d better get your thinking cap on! You’ll need to consider your scope of work carefully and decide which services you offer, and how comprehensive those services should be.
Yet what you’ll also need to consider is how you can package and promote those services to demand the maximum price possible for them – yet remain reasonable enough to stay competitive within the market!
For instance, which service sounds better:
“Social media content creation”?
OR “Social media content creation for two social media platforms including graphic design, content scheduling, copywriting, hashtags, and post optimization”?
Not only does the second service option show exactly how much value you’ll be offering potential clients, but it also establishes clear definitions of what’s included in each of your services.
If a client agrees on a vague service like “content creation”, they might have unrealistic expectations about what’s included in the service, leading to disagreements – not a good way to start your new working relationship!
Social media marketing services you could offer include:
When creating a package, remember that with social media, there are so many variations in how social media managers work and what they offer. After all, different clients have have different needs. For instance, some clients, especially new business owners, or large businesses, might prefer to do their own community management, or provide their own creatives. You can let clients maintain ownership of some of these services but just remember that this might give you less control over their results. It’s up to you and your clients to find an arrangement that suits you both.
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When it comes time to set up your pricing model, there are several ways you can structure these.
Most agencies or freelancers will structure their online marketing costs based on an hourly, monthly, or annual basis, as well as on a campaign-by-campaign basis. Let’s assess each pricing model so you can decide on the best option for you.
Social media management isn’t typically priced by the hour, with a few exceptions. Why? Well, it’s just not that lucrative, and it can be messy to track and manage your hours day by day. Using an hourly rate means that, aside from doing more hours, you’ll never be able to increase your margins unless you increase your rates. Your client will also know exactly how long each task takes, which might degrade the value of what you’re doing.
Hourly rates are capped which makes it hard to increase your revenue. Also, unless you have a set number of hours set aside per week, it can be difficult for social media managers to guarantee availability for clients within this arrangement.
Remember, your clients aren’t just paying for your time. They’re also paying for your ongoing training, your membership in certain social media groups, and your expertise.
That said, you might use an hourly rate for:
To define your hourly rate, consider whether you’re an agency or a freelancer. Check with social media groups online to see what social media managers charge in your country. Social media rates will vary, however, depending on where you’re based, how much work experience you have, and the type of services you’re providing.
A monthly retainer (or contract) is a great way to ensure time is locked in for each of your clients. With this pricing model, you’ll receive an agreed-upon monthly fee for set services. You’ll be able to prioritize each client’s needs and also consider how their social strategy might need to be tweaked month by month.
You’ll also get a steady income each month and be able to budget hours and services accordingly or even outsource as needed.
For new clients, you might want to start with a shorter contract, such as three months, to begin with. Once you’re both happy with the arrangement you can create a longer contract.
After all, you’ll also want to see how you work with a particular client. Some clients will want countless changes to their content or they might want additional meeting hours or phone calls. In these scenarios, the scope can creep up and up, and management hours can spiral out of scope. That’s why, when you’re defining services for this pricing model, you need to be as specific as possible. You can even outline a certain number of hours within a package, if you like.
When costing your monthly retainer, be sure to include costs like:
You might want to create set pricing plans or come up with custom packages for each client, or both – the choice is yours!
An annual retainer works in the same way as a monthly charge. You might be on an annual pricing plan but bill your client each month. This arrangement is good in some ways, as it gives you more security.
Yet, if it’s a new client, just ensure that you define the pricing model and project scope carefully before signing on the dotted line!
Working on a one-off social media campaign can actually be a great way to trial a new working relationship – from the perspective of both clients and social media managers. Or, sometimes a client might just need extra help for an important campaign.
Not only is this extra revenue for freelancers and agencies, but campaigns can also be fun! Not to mention, if they go well, they can make great case studies to add to your website.
But how do you come up with a campaign rate? Well, just use your normal hourly rate and try to determine how many hours you’ll need to spend to work on a campaign. You might want to add a buffer in your campaign rate to cover any extra hours, to cover any travel time, additional costs. or your attendance at events.
So, how do you actually set your pricing plans and sell them to clients confidently? After all, you’ll want to do your research and know that you’re selling the right services at the right prices.
Well, let’s run through it, step by step.
First off, how can you know if you’re drastically undercharging or overcharging? Well, without any research, you won’t!
There are several ways to research what social media managers or agencies are charging for similar services.
According to a study by The Content Factory, the average business spends between $6,000 and $10,500 per month on social media management. Of course, this will vary greatly depending on what each organization’s business objectives are, who they are targeting, and how much paid social advertising they will be doing.
Another way of calculating the cost for each client is by figuring out your hourly rate, counting up the hours and additional costs involved, and then adding a buffer. This certainly doesn’t mean you have to officially use an hourly rate or even mention one to your client. It’s simply a way of calculating your costs internally. You can present a flat rate to your client.
Therefore, your monthly retainer cost calculation might look something like the below, however, you might not break down the exact hourly rate for the client.
If you’ve already been working with existing clients for some time, you might want to gather feedback on your existing pricing plan. How you approach this will depend on the relationship you have with your client/s. The best social media managers are honest with their clients and aim to have open conversations with them.
If you’re close with your clients, you might simply ask them their opinion. Or, if you’d prefer to try a more subtle approach you could send them a client feedback questionnaire. This could include questions about the perceived value gained from your services, the results, and the cost itself.
Keep in mind that selling a service is similar to selling a product. A Gucci handbag might not necessarily be drastically better in quality in comparison to a regular leather handbag. But people will still spend a lot more on high-end brands because they believe the Gucci bag is worth more.
If you can prove the value of what you’re doing and continually reinforce the positive results gained, you’ll have a much better chance of continuing that monthly retainer. You can do this by using things like:
All of these factors can help you or your agency command a higher price for your services, so it’s worth investing time and effort into making sure you’re presenting well! Your client testimonial and case studies can even be listed on your website, so you can sell prospective clients on your brand even before you speak to them!
For instance, as we can see below, L & A Social have a number of case studies listed on their website, with specific results listed to demonstrate the effectiveness of their social media strategies.
Instead of focusing on increasing your pricing time and time again, why not also consider reducing your outgoings? This will increase your overall profitability or might mean that you can afford the things you really need, instead of the things you think you need.
That said, you should be considering how you can increase efficiency and retain clients for the long term. If you haven’t yet, consider the below:
Remember, structuring your business and working out your pricing plan is all about how you position yourself or your agency. There are endless things you can do in order to command a higher price, but you need to have the confidence to demand what you’re worth!
Are you ready to start setting your pricing for social media management? To set your prices and make your social media services as efficient as possible, you need to be super organized, with the right marketing tools for the job.
As your client needs grow and you start to look to increase efficiency within your agency, you’ll need to come up with several ways to reduce the time spent doing client work. Not only that, but to keep your staff happy and reduce burnout, you don’t want your employees doing boring tasks like scheduling and reporting! By automating some of these tasks you can boost efficiency and maximize bottom line profits.
Now that you know how to get started, why not shape your social media marketing agency into an efficient time-saving machine? Get started by signing up for Sked’s 7-day trial. Our all-in-one social media scheduler allows you to automatically post images, carousels, Instagram Stories, videos, and more. But it doesn’t just work with Instagram. It also works with LinkedIn, Twitter, your Facebook page, and plenty of other social channels! Our smart scheduler enables you to save hours every week and turn your social media marketing strategy from ad-hoc to amazing.
But not only that – Sked Social also has powerful advanced reporting functionality which can help you prove the effectiveness of your social media marketing strategies, which can, in turn, help you command a higher rate for your work – what could be better?