Selling PPC Lesson 6: How To Price Your PPC Services

Selling PPC Lesson 6: How To

Price Your PPC Services

Time to get serious now! You’ve decided that you are going to start offering PPC services to your clients. Now the question is, how do you price your PPC services.

Below are some questions you can ask and models you can use to baseline your pricing.

Questions to Ask Yourself :

  • Are you including this service as part of a package of services?
  • Have they just launched SEO and you want to generate some leads now before the SEO efforts start to kick in?
  • Is ad spend rolled into your package or does the client pay for that?

Models :

Straight Markup Approach :

In the Straight Markup Approach you take our rate (for example, our base rate of $449) and then just add a flat rate (say $400) to it or use a multiple, such as doubling it ($449 x 2) to $898 a month.

There are a lot of agencies that charge a flat fee plus a percentage of the “ad spend”.  For example, $500 plus 10% of ad spend.

Personally, I’ve never been a fan of “percentage of ad spend” models because a) it's hard to predict your revenue or your clients’ admin costs in advance and b) it incentivizes spending MORE - spending EFFICIENTLY should be the goal.

Straight Markup But I’m Going To Sell A Lot of PPC Approach :

If you plan to really promote PPC and on-board a lot of clients (and I think you should!) then aim for a lower monthly fee to your clients but also take advantage of our multi-account discounts.

  • 5+ accounts your base rate drops to $399/month
  • 10+ accounts your base rate drops to $349/month
  • Let’s say you charged a lower rate - say $649/month but had 20 clients. Do the math.
  • Your monthly recurring revenue on EACH client would be $300
  • $300 x 20 = $6,000 or $72,000 per year.

That’s really not bad money considering you only had to sell the client one time and Adwords clients, when you target well and set clear expectations, tend to retain for 2+ years.

Why a lower monthly fee? First of all, it's a reasonable price to charge. You can ignore the social media gurus teaching  you to quickly scale a 6 figure income by getting a few high dollar clients - it's much better to go wide and create a steady, predictable stream of income.

Remember, every month your clients will look at that charge on their credit card and weigh it against the other investments they could make in their business. You don’t want your charge to appear excessive. You want a long term steady revenue stream.

Package Approach :

Some of you are selling a package of services. Great idea!

In that case you usually package all your services into one monthly fee.

An example could be website design, local SEO, Facebook ads and Google Ads.

You determine the rate your market/industry can support. Most would charge $1500-$2500 for these services. In this scenario you need to find a way to cover your costs, then make sure you have plenty of margin for expenses and profit. But the client never sees the breakdown of individual services - they just pay one monthly invoice.

One advantage of this approach is you normally sign clients for 6-12 months under this type of scenario.

One dis-advantage is that it's typically a longer sales cycle than selling a single service.

I’m Paying the Ad Spend Approach :

This is probably the trickiest approach to price correctly.

Normally we recommend charging the client your admin fee and use their cc for ad spend. This keeps a lot of expense, and potentially charge backs, off your card.

But it's an approach we see being used more and more, especially with agencies guaranteeing a specific number of monthly leads and focusing on a single niche.

In a scenario like this you may charge the client $4000, pay your white label providers and  your clients ad spend while you pocket whatever remains.

Again, not my favorite approach, but one I see being used more and more frequently.

That wraps up Chapter 6. In our next chapter of the Complete Guide to Selling PPC we will learn:

Selling PPC Lesson 7 : Sell What They Need - Leads