On What Basis One Should Charge the Client
Project vs. Hourly
A recurring debate in this arena is whether to charge hourly or by the project.
The short version is that you can often make a lot more money by charging per project and focusing on selling value as opposed to time.
Charging hourly can give you more control.
Here are the Pros and Cons of the Charging per Hour method:
- It is straight-forward, no messing around with estimations for various
- Making your client rate public will help you save some time, clients who contact you have basically agreed to your asking
- You can calculate the rate that fits you best so that you will properly utilize each working
- Clients who have no idea how long it takes to work on their project may not approach
- There is a slight chance that you are over-pricing or under-pricing your services this
- Clients with smaller projects may think that your rate is too high for them
Charging per Project: If you are not satisfied with the “pay per hour” system then you definitely have to consider this one. Here are the Pros and Cons of this method:
- You can tell exactly what is the amount you would like to get paid for doing the specific
- It will be easier to get “small leads” because high hourly rates usually frighten clients with smaller projects in their hands
- A wrong estimation will make you work more because often times the agreed rate can’t be changed.
- There is no constant pricing when it comes to projects, which might be considered a scam by some
What Could be the Ideal Amount to Charge
A conducted fresh research on the current state of digital marketing agency services and costs, to help entrepreneurs orient themselves in the digital marketing sphere. This survey, which brought in more than 1,000 responses from digital marketing agencies and freelancers, spanning 16 countries, including the United States, the United Kingdom, and several European regions, included queries about services covered, prices, and payment models. Among the biggest takeaways:
- Freelancers’ hourly rates in the digital marketing industry start at $50 (all cost figures given here are S. dollar amounts).
- The most commonly used payment models are monthly retainer contracts and project-based
- Agencies typically prefer monthly-retainer contracts, while freelancers service clients mostly on a project-based fee payment
- In the United States, the hourly model is the most popular, the monthly retainer contracts and project-based fees that UK and other European respondents said they preferred.
- The average industry fee for a monthly retainer contract (across all studied regions) starts at $1,000.
Here are the details:
- Freelancers’ monthly retainer contracts start from $251, and their project-based fees, from $5,000. You can expect to hire a freelancer on a monthly retainer contract at a cost that starts as low as $251 — through the $1,000 noted in the last bullet above is the average. You can expect freelancers’ project-based fees to start at $5,000.
- Freelancers’ hourly rates range between $50 and $100.
- The average hourly rate for a freelancer is more than $100. But the majority of freelancers charge less than $50 per Also, the hourly fee model is quite popular, regardless of agency size.
- The average industry fee for a monthly retainer contract doesn’t go beyond $3,000.
- The average fee across all U.S. regions for a monthly-retainer contract ranges between $1,000 and $3,000. However, in Europe, it is a bit lower, around $751.
- Agencies mostly prefer monthly retainer contracts, while freelancers prefer a project-based fee-payment model
- Small- and medium-sized businesses are the best
- The general trend shows that small- and medium-sized businesses are the best clients for freelancers and agencies The reason is that the digital marketing industry is still quite a new market, and most agencies aren’t experienced enough or big enough to deal with enterprise customers.
- Freelancers deal mostly with hyper-local, local, and small businesses. Hyper-local, local and small businesses have limited budgets, which is why they prefer to deal with freelancers who will charge significantly less than the average agency.
- Agency clients are seeking mostly SEO and PPC
- The survey revealed that the following services were the top five — in the following order — that survey respondents across all regions said they preferred:
- PPC management
- Social media
- Content marketing
- Analytics and UX
- The bigger the agency, the more ‘other
services’ they offer. The bigger the company, the more customized solutions it provides, and the higher the average price per customer.
- Analytics and UX is growing It was great to see analytics and user experience design (UX) among the most popular services agencies said they needed because this data correlated perfectly with the current worldwide trend.