site_logo
  • Why Manceppo?
    • WordPress
    • Mailchimp
    • Profiles
    • Form builder
    • Lead scoring
    • Rules engine
  • Solutions
    • B2B Companies
      • B2B Marketing as a Service
      • B2B Marketing Accelerator Program
    • B2B Marketing Agencies
    • Partner Marketing
  • Pricing
  • Resources
    • Blog
    • E-books
    • Templates
    • Academy
    • Webinars
  • Agency
  • Login
  • Cookie Policy (EU)
SIGN UP FREE

Marketing Agency Pricing Models for B2B Services

April 7, 2020

  • 0 Comments
  • Bob Oord
  • How-To, Tips & Tricks
  • B2B Marketing, B2B Marketing Agencies
Marketing Agency Pricing

In just a few years the role of marketing has changed for B2B’s and as a consequence, what B2Bs expect from their B2B marketing agency and agency pricing. Today investments in marketing must help a business sell more stuff. Anything else that it achieves is nice, but it’s complementary to that main goal. At the same time there is an increasing number of challenges and trends B2B’s need to address, including privacy, technology and changing customer expectations. How should you pay for your agency services? What should be your agency pricing model?

Pssst, don't tell anyone. Here you can download our secret manuscript on turning B2B marketing agencies into a success. In this e-book we will share a proven 4 step campaign process and 3 conditions for agency success based on years of agency experience. It’s a guideline on how to grow your agency and improve your operations.

Please share your e-mail address*

Thank you for downloading our e-book. You will receive the link by email.

B2B Marketing Agency Services

Lets first be clear on the type of services B2B agencies charge for. These can vary widely, including:

  • Strategy & Tactics
  • Content Marketing
  • Display & Remarketing
  • Search Engine Marketing
  • Lead Generation
  • Content & Video Production
  • Marketing Technology
  • Email Marketing
  • Campaign Management
  • Social Media Marketing

Some services have a more direct relation in ‘helping sell more stuff’, think of generating qualified sales leads. But other services, like the production of a video, can have a more indirect relation with the top line. Normally a combination of the services above is needed for marketing to be most effective. For instance, lead generation is less effective when the buyer journey is unclear and content is of poor quality.

6 Agency Pricing Models

Now, how should your agency charge for its services? Let’s discuss 6 agency pricing options, the pitfalls of the different options and how agencies and clients can benefit from these different deal types.

The 6 basic agency pricing models you can choose from include:

1. Time & material

The most straight forward (and traditional) way of working in which the cost is based on actual time spend on a project and an hourly rate is calculated.

Pitfall: The pitfall of this pricing option is that there is no common incentive. There is an incentive for the agency to spend more time on the service that really needed, as this implies more billable time to be spend. An incentive to maximize revenue which is contrary to the client objective of keeping cost in sync.

Benefit: Time & material are a flexible way of working together, when during the project ideas and demands change there is flexibility to adjust.

2. Fixed prices

In a fixed price the budget is set in advance for a combination of services to be delivered. For instance a fixed price can be set for the development of a set of content.

Pitfall: With a fixed price inflexibility can be a result. When ideas change during the project, chances are there is no (or not enough) room for adjustments.

Benefit: Clarity on the budget.

3. Retainers

Increasingly agencies work based on a fixed price per month for a combination of services. Typically a tactical campaign plan and targets are set per quarter and these need to be realized within the budget and time-frame.

Pitfall: In a retainer there is more flexibility, as the co-operation can be adjusted over the months. But the pitfall here is the planning cycle. Be clear on objectives per month or quarter and communicate clearly so everyone is on the same page.

Benefit: Clarity on the budget.

4. Performance based

In a performance based cooperation, pricing is based on realizing certain KPI’s. For instance B2B agencies can work with a client based on a pay-per-lead agreement.

Pitfall: The main challenge in a performance based cooperation is a common view on the performance. For instance, a common view on the quality of leads in a pay-per-lead partnership. Another challenge can be a lack of focus on indirect factors that contribute to success in the long run, for instance investments in the insights in the buyer journey and the quality of content mentioned earlier.

Benefit: The main benefit of performance based deals is the alignment of incentives.

5. Kick-backs

In certain campaigns an agency can also be partly compensated by a kick-back from the media partner or technology vendor.

Pitfall: The technology vendor or media partner is aligning incentives with the agency here, not the client.

Benefit: When the agency earns money from a supplier, there can be more room for discounts towards for the client on additional services.

An alternative for kick-backs, especially for media buying, is using an agency fee on top of the negotiated net prices of the media partner to cover cost related to the media buy. This makes the actual media cost 100% transparent to clients.

6. Hybrid models

Finally combinations of the pricing options above can be used to customize a partnership between the company and the agency.

Looking at the models above, our preferred pricing model for B2Bs to work with an agency is a hybrid model in which:

  • A retainer is the basis, providing the flexibility to adjust services to needs and a quarterly plan made to align objectives and measure success of the agency continuously;
  • A performance incentive can be made part of the cooperation, for instance based on KPIs in the quarterly plan;
  • Limited kick-backs are fine as they can be used as leverage in lower pricing of the agency services

Summarizing pros and cons per agency pricing option

There is no agency pricing ‘holy grail’. The challenge is to find a pricing model in which the interests of both the client and the agency are most aligned. In determining a partnership, consider the following pros and cons:

 ProCon
Time & materialFlexibleNo common incentive
Fixed priceClear budgetInflexibility during project
RetainersClear budgetDon’t plan to far in advance
Performance basedIncentives are alignedDiscussions on lead quality
Kick-backsCan result in lower pricingIncentive on higher budget
Hybrid modelsCustomize partnershipCan become complex
Comparing Agency Pricing Models

In discussing your next partnership consider these pros and cons to find an agency pricing model that works best for you.

E-book B2B Marketing Agency

Post navigation

← Previous Post Previous post:
Next Post → Next post:

About Author: Bob Oord

Write a Comment

Cancel

Latest posts

  • 4 Strategic Pointers from Content Marketing Guru Robert Rose for SMBs
    September 7, 2021
  • Using AI for B2B Marketing as a Small Business
    March 30, 2021
  • Mailchimp for B2B Marketing Automation, CRM and Sales
    January 20, 2021

Tags

AI B2B Lead Generation B2B Marketing B2B Marketing Agencies B2B Marketing Tools Buyer Journey / Persona's Content Creation Content Marketing Coronavirus Inbound Marketing kpis Lead Management Lead Nurturing Lead Scoring Mailchimp Marketing Automation Marketing Stack marketing tools Partner Marketing SEM, SEO & SEA small business SMB Social Media Strategy WordPress
Register button
site_logo

  • Privacy Policy
  • Cookie declaration
  • Terms of Use
  • Sign Up Free!
  • Jobs
  • Contact
  • Hosted by Geckotools
Mailchimp

© 2021 Manceppo - hosted by Geckotools

FacebookTwitterLinkedinYouTube
Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}