a social media talent marketplace
Jeremiah Owyang had an interesting piece about what top corporation..., but what would you consider a fair price for social? Clearly, he's talking about big companies investing in internal resources, but what about small business and retail marketing? Consultants don't tend to share their pricing, usually because they want to be able to charge more in the future, but this can be a form to share how you price, instead of your actual number.
Personally, I break pricing down into three strategies:
What you think you're worth
What you think the company should pay
What you think the company will pay
These sometimes are the same, but how you think about pricing matters.
1) What you're worth:
When I started, I worked on an hourly rate based on what we charged for interactive marketing, including strategy, design, SEO, and web development. I based those numbers on what I could charge as a consultant based on my background. As I got better, I charged more.
If this is your path, simply determine what you are replacing or equal to in the market. If you are moving into social media from another field (PR, small business consulting), charge the same rate. Your experience is the same, and you're just adding social into your box of tools.
2) What the company should pay:
If you don't have that experience, base the rate on similar services to the client. For example, figure out what the yellow pages, or SEO firms, or copywriters, or website developers charge to create a similar product or result. It's not science, but it maximizes your chance at the business if you're delivering a result at the same price the client pays another vendor to deliver that result.
3) What the company will pay:
This is a bit of an advanced pricing strategy I learned from two very successful friends. They determine what a project looks like, what it will accomplish, and how it can be implemented. Then they determine what they want to make that project happen. The price is nothing more than a figure they put in their heads for the time and opportunity cost to perform the work, but it works.
Not everyone can do it, because it takes both expertise and confidence to pull it off. You also get a significant number of rejections if you're overreaching. And it's not defensible (it's not meant to be). Asked to explain why they charge the way they do, both people said it's the price they want to charge, and it's up to the client to come up with the money.
The first time I heard it, I was flabbergasted. I gave a dozen reasons why it wouldn't work. And yet, for them it does. What is lost in translation is the intensity, focus, and passion they bring to the work. They charge a lot because they know they are worth it, and they recognized that a low-priced project isn't supposed to do much.
A high-priced project, on the other hand, has a lot at stake. In addition to the vendor needing to deliver, the client has to work with the vendor to achieve results. High-priced projects cost more than money. Going high forces everyone involved to make sure they work towards a successful conclusion.
And in the final measure, if the project has value, it pays for itself and more.
So tell me, how do you price your services? Don't be afraid to put numbers if you want to, but it's perfeclty fine to be vague and discuss the reasoning behind it.