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As a small or medium-sized business owner, choosing between an inclusive monthly retainer up-front or paying by hour (or project) for your outsourced online and print marketing needs can be a bit tricky.
Below we'll break down the benefits of hourly rates and upfront-priced packages so you can decide which option is right for you. We'll also share what the typical marketing budget should be for a small to medium-sized business.
Below are a few of the pros and cons of each option.
Up-Front Package Pricing
While you're searching prices for marketing service packages, you'll find that many providers won't show pricing on their website. Instead of a price, you may be greeted with a form that will help them determine what to charge based on the specific services you require. If you don't want to give up your data for a quote, you are not alone. When you find advertised prices, it is because agencies have developed packages and specific services already selected for you. To save yourself a headache down the line, be sure any up-front packages spell out exactly what's included in the package from the start.
As an example, PFC Creative offers up-front social media and website management packages for $499 with up to three unique social media posts per week with our monthly plan among other services.
Up-Front package pricing is great for at least one reason. You know exactly what you'll pay each month based on your selection of a group of provided services. Here are a few of the pros and cons of up-front online marketing package options:
PROs
- Convenient: You pay a set amount each month for a specific set of services.
- Predictable: You know exactly what you're paying for each month and can plan your budget accordingly.
- Discounts and Benefits: Upfront priced packages often come with additional benefits, such as priority support and discounted rates.
CONs
- Waste: Use-it or lose-it up-front packages may mean you pay for services you don't use.
- Contracts: You may be stuck in a contract even if it's not working out for you. Read the fine print or you may be stuck in the contract for a lot longer then you wish.
- Over Time Fees: If you have a very busy month, you may find yourself paying additional fees for services. Reputable providers will give you a heads up before you go over.
Hourly or Project Based Pricing
Hourly a-la-carte or project based pricing means simply paying your online marketing provider by the hour for any service offered. If you have a specific marketing skills gap on your team, an hourly provider can help fill that void while you find in-house replacement, or as a lower cost solution for your marketing staffing needs. Outsourcing your marketing can help you meet your budget, while also ensuring a high quality of work from experienced and skilled marketers.
If you wish to outsource for multiple skillsets, it may save you time to work with a marketing provider that offers a wide variety of services rather than working with multiple contractors - particularly when a project will require collaboration among teams.
Here are a few of the pros and cons of hiring hourly or project based marketing help:
PROs
- Cost-effective: You only pay for the time that is spent on your project, which can be more cost-effective than an upfront priced package.
- Flexible: You can adjust the amount of time you need each month based on your business's needs.
- Priority Service: If the provider is trying to earn long-term business, you may get a priority response from their team.
CONs
- Higher Cost: You're less likely to get discount pricing for the work you're requesting.
- Services Unavailable: Up-front contracts often mean that you have reserved time from your marketing provider, but with a-la-carte requests there is no guarantee they can take on the work.
- Harder to Budget: Without a fixed cost, it is harder to estimate how much your services will cost with each month or project.
What Are Typical Costs for Online Marketing Services?
Hourly costs and package costs for outsourced online services can vary widely depending on the provider, the services offered, and the level of experience and expertise of the team. However, here are some general guidelines to give you an idea of what to expect:
Hourly Marketing Services Costs:
- Entry-level: $50-$75 per hour
- Mid-level: $75-$150 per hour
- Senior-level: $150-$300+ per hour
- Entry-level: $500-$1,000 per month
- Mid-level: $1,000-$3,000 per month
- Senior-level: $3,000-$10,000+ per month
What Should Your Marketing Budget Be?
When it comes to determining your marketing budget, of course this will vary by business. Small and medium-sized businesses often are faced with smaller budgets than bigger companies.
That said, a good rule of thumb is to allocate 7-8% of your total revenue to marketing. For example, if your business generates $100,000 in revenue per year, you should allocate $7,000-$8,000 to marketing.
Of course, this number will vary depending on your industry, competition, and business goals. Small and medium-sized businesses that have relied on word-of-mouth tend to get started may find that it trails off over time.
One mistake many small businesses make is to wait till all the word-of-mouth momentum is gone to invest in marketing. Energized happy customers can make your marketing efforts a lot more fruitful if you don't wait too long.
So, Which Pricing Model is Best for My Business?
If you have a solid and consistent marketing plan - and are confident you will stick to it each month - an online marketing package is a great solution. For example, if you want to outsource your social media management, a social media package from a provider for x number of posts per month will be a good investment. As long as your social media provider works well independently, you won't be wasting any budget to keep it going. If you're looking for regular blogging for SEO, a package would also be a solid investment.
If you have a variety of online and print marketing needs, you can still save money with a package. Just be sure to take utilize all the marketing service hours in your contract each month. You can also look for a provider that offers you the option to carry over some of your unused time each month. PFC Creative offers month-to-month carry-over for up to three months to ensure you get what you have paid for.
We hope this has been a helpful guide for determining which marketing services payment option is right for your small or medium-sized business. We're happy to share our experience with you and would be more than happy to provide more insight and excellent service as your outsourced marketing provider.
At PFC Creative, we offer both hourly and upfront-priced packages to meet the needs of small and medium-sized businesses. If you're looking for an outsourced marketing provider that can help you achieve your business goals, contact PFC Creative today.
