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PPC Campaign Management Fees

What do you do?

     
12:57 am on May 17, 2003 (gmt 0)

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Would appreciate recommendations about the charge model those experienced in PPC management have found works best. I've got clients wanting me to provide PPC in addition to the SEO I've been doing and want to make sure I have a charge model that won't leave me high & dry.

Seems like there are several different approaches used such as:

1) Monthly fee based on % of client monthly spend, eg 15%. Usually the % has a set minimum $ value (eg $150).

2) Set $ monthly fee dictated by # of KW managed. I've seen figures like $150 - $450.

Both the above approaches may or may not include an up-front set up fee. This either seems to be fixed or vary based, primarily on # of KW.

Comments about what the best approach is would be gratefully received.

4:27 pm on May 18, 2003 (gmt 0)

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Check what your competitors are doing before selecting a pricing model. Do a quick Google search for PPC management companies and contact each one of them (as a customer). You will get a better idea about what/how much you should charge for PPC mgmt.
9:55 pm on May 18, 2003 (gmt 0)

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Hi vibgyor79

That's always an option but one I try to avoid because I know how frustrated I get by BS quote requests from other SEOs. Wastes my time! That's why I posted the question here.

I see from your website that you charge US $150 to $450 per month with no setup fee. How do you determine the final price you quote someone? Also, do you have a minimum contract period?

3:39 am on May 19, 2003 (gmt 0)

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Biggles: Don't try to be nice to your competitors - Heck! They are your competitors after all! Competition research is extremely important - you should generally never set a price for your service without knowing what your competitors are charging.
12:57 pm on May 21, 2003 (gmt 0)

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>>you should generally never set a price for your service without knowing what your competitors are charging

Bull.

Everyday I have competitors popping up that can offer to design a website for $450, we've all seen them. I cannot design and develop an effective website for $450 for my clients but given your statements you are telling me I should set my prices based on what my competition charges?

If you want to avoid price shoppers then you do not sell your services based on price. Instead you sell on the value it will provide your client.

To determine pricing, determine WHAT you will be doing for the client and how long it will take you to do that. Then add in your overhead expenses and you have your price.

Communicate the value of them using your services. Don't seel the features, sell the benefits - you know.. sell the sizzle and not the steak.

Just my thoughts.

Aaron

Tor

1:05 pm on May 21, 2003 (gmt 0)

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Just my thoughts.

Excellent thoughts Aaron. This is exactly the way we also stipulate our price before we quote it to a potential client.

1:25 pm on May 21, 2003 (gmt 0)

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Aaron, let me throw one other thing into the calculation: value to the client. The most profitable businesses are the ones that can charge far more for a product or service than what it actually costs them. And I don't mean by gouging the client, as such deals won't last for long; I mean by delivering sufficient value (e.g., decreased costs or higher profits) that the fee is well-justified. It's certainly important to know your costs and overhead so you don't get into money-losing deals, but look for opportunities to deliver great value (and profit from it!).
1:27 pm on May 21, 2003 (gmt 0)

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>>This is exactly the way we also stipulate our price before we quote it to a potential client.

It's a very difficult concept to get across to clients. We've only starting doing this within the last 6 months or so.

When we develop proposals and whatnot, its' easy to sell the features of the service you'll be providing but it takes a bit more work and thinking involved to present the proposal in a light that sells the features and benefits which then tells the client where the value is in what you are doing and how it will help their business.

Aaron

1:41 pm on May 21, 2003 (gmt 0)

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Turning it on it's head for a second.

Rather than wondering what to charge, ask yourself if you have the expertise to provide the service required. Then, assuming that you do, find a model that works for both parties.

Factors that need to be taken into account before even thinking about pricing a job are :

1. Market sector - if they sell obscure products and all the keywords they are the only bidders, or they are one of 50 or so advertisers, somehere in there is a value proposition.
2. Number of "active" keywords - although many accounts have thousands of keywords, there will be a nucleus of keywords that need to be managed around the clock. Do you have the resource to do that? Will you use software?
3. What duration contract do you put in place - if you have a walk away contract you could get fleeced if they decide to dispense with your services and you have done a lot of the work.
4. What level of financial and technical support will you get from the PPC providers - will this impact positively or negatively on your pricing?
5. How quantifiable are the "results" going to be, so will you be able to isolate your added value in this equation or not.

If I was approached by a trainee hairdresser who wanted to charge me the same rate as if Vidal Sassoon cut my hair I'd be a bit upset. I'd expect there to be some sort of concession by the fact you don't do this already (assuming that you don't) and if you are asking the question about charging then I'd guess I am right).

2:05 pm on May 21, 2003 (gmt 0)

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>>> adding to the above

Ask some questions!

What is their conversion rate is per unique visitor.
What is the repeat order rate.
What percent of sales are made via an 800#
What can they afford to pay per sale in commission.
What is the gross revenue per month.
What percent of gross revenue can they devote to a PPC Campaign

Most of the time when you hear the answer to the last 2 questions you will determine that it is not worthwhile to make a full-blown proposal at all. You may be better off training them to do it themselves for a flat fee in advance.