Okay, so below are the things my contact had requested me to do over the weekend. Their overall goal that they’re involving me in is the company’s social media marketing1. Research the company that they are helping2. They want Twitter and Facebook content creation and release for at least a month.3. They’re looking into articles to float around the blogospher. They want me to a 4 week editorial calendarSo by Sunday I will be sending them a PPT presentation of how I propose to get the company’s product introduced to the market via Twitter and FB; I will advise them on how often to post and how to track engagement using FB’s analytics tools.So my pricing concern is actually two-fold. How do I price the proposal and then how do I price the services I’m proposing once they approve it?
- You can create the proposal as a project, including a timeline through the end of the first month. You’ll want to estimate how much time the entire “project” will take you to complete — don’t share this with the client, just know it for yourself. Multiply the estimated hours by what you want to be making per hour for this kind of work. That is your project price. If they want to pay less, your job is to negotiate by saying that you are happy to cut back on some of the services provided in exchange for less money. That way you are not diminishing your value, but rather trading less work for less money.
- You can establish the relationship as an initial project + monthly retainer. In other words, you can structure your proposal for an ongoing work arrangement that extends beyond the first month. In this case, you would establish a fee for the first month of work — the initial research and strategy work — which you would price like a mini-project per #1 above. Then, you would propose a monthly fee for a specific set of responsibilities in months 2 to infinity.
- Charge hourly. This is the simplest way to charge, but it also limits your ability to learn and creates poor incentives. I hate charging hourly, but it is definitely the most comfortable way to get started. Decide what you think your hourly rate would be, track your hours, and bill the client every week, two weeks, or month according to your agreement.
- If you price this as a project, make sure you are very clear about the timeline, expectations from the client (what they have to do to make the project successful), deliverables, and responsibilities. Your deliverable should be concrete, agreed upon, and tied to deadlines. Your payment should be tied to the completion of those deliverables. This is how you provide value without charging an hourly rate.
- You can use the project pricing and still propose and ongoing monthly retainer. The best method for this is to propose the initial project and then have a final slide of your proposal that paints the picture of what an ongoing monthly partnership would look like (benefits, responsibilities, cost, etc)
- Only charge hourly if you can’t do anything else. Hourly sucks for you because you have to track and justify every hour you spend. Additionally, if you want to make more money, you have to work more hours. Hourly sucks for the client because they just want their problems solved in as little time as possible, they really want outcomes not just hours worked, and they have to scrutinize every hour you spend. Additionally, it’s harder for the client to predict what they project will cost, which is just stupid for everyone involved.
- The opposite is true of project pricing — the less time you take to complete the deliverables with excellence, the more money you make per hour — your incentive is to efficiently delight your customers so you maximize your return on time invested. This makes the client happy while making you more money. It’s also much less stressful for both parties.
What did I miss? What would you have suggested in response to this email? Do you have another pricing strategy that has worked well for you in the past?