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Here’s the truth about selling digital marketing services…

Knowing how to price your SMMA services is one of the most important parts of running an agency. Go a little bit over the right price and you can make it tough to get clients. Go a little bit under the right price and you’re going to start losing money.

But, if the price it just right, you’ll feel like you’re literally printing money. This is why a proper pricing table is vital.

Luckily, getting it right isn’t too difficult.

What you’ll see me repeat through all of these articles is a simple formula: cost + markup = price. What this means is that the price you’re going to charge your client is the price that you’re going to pay plus the money that you want to make.

For most agencies, the markup part is simple. You’re going to charge a 20% to 50% markup on all of your services. This part can be difficult to get right, but this is the variable that’s easiest to tweak. The general rule is that your markup should be equivalent to the amount of value you’re providing in the deal.

The cost, really, is the difficult part. When you’re working with contractors, the number on the cost is right in front of you — it’s whatever they’re charging you — but that isn’t always the cost that you’re going to plug into this equation. You need to figure out your cost for the entire service you’re offering.

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