How Marketing, Advertising and PR Firms Price Their Work For You
A new study reveals pricing strategies employed by marketing, PR and Advertising agencies.
In the “Fees and Pricing Benchmark Report: Marketing, Advertising, and PR Industry 2008” those of us in the Marketing, Advertising and PR industries are being treated to a glimpse into the minds, and pricing strategies, of some of the most well known and profitable firms in our industry.
Based on a survey of 343 industry executives the report by RainToday.com pays special attention to the premium-price firms, profit leaders, and brand leaders in an attempt to find what they are doing right, and why they charge what they do.
One element of the study that is of particular interest is its focus on how clients are charged. The methods are broken down into either going rates, a fixed fee, or a value based contract. It further goes on to separate these strategies based on the type of firm that implements each type of strategy. The report looks at the strategy used by premium profit firms versus bargain firms, or by profit leaders compared to firms who have been decreasing their prices.
For those who are curious, using going rates is the most popular option overall, while value based contracts are the least popular. The exception to this is among premium priced firms who tend to favor value pricing far more than other firms.
Interestingly, this report compares not only statistical data but also actual commentary from the interviewed executives. This creates a much more interesting insight into not only how many firms are behaving a certain way, but also why they are behaving in that way.
As an example, we find that one executive doesn’t use value based pricing because he has “difficulty introducing the concept to clients.” At the same time we see quotes from executives who favor this model of pricing claiming “demonstrating value usually gets an agreement on a price that may seem too high at first sight.”
The report does an excellent job at controlling the data and providing clear insights into a variety of pricing strategies and tactics. Additionally, readers are provided with a number of clear suggestions for how to use the data to increase profits in their own marketing, PR, or advertising firm.
To get more information on the report go to RainToday’s Fees and Pricing Benchmark Report page.
RSS Ray will be interviewing the founder of RainToday.com and author of this report, Mike Schultz, on Online Marketing with RSS Ray July 23rd. Be sure to catch the interview live at 6:00PM Eastern, 3:00PM Pacific on wsRadio.com.
Tags: Competitive Intelligence, marketing firm pricing, marketing industry, pricing strategy
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