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Many marketing agencies bill clients using an outdated method that rewards ineffectual behavior. Traditional billable hours are flawed; both the agency and the client suffer because of this substandard billing. Moving towards a progressive, flat fee billing method results in positive changes for the agency and its clients.

Traditional Agency Billing

Conventionally, marketing agencies bill using an hourly rate. The rate varies based on which of the agency’s employees is servicing the client’s account, resulting in a tiered-rate system. This tiered-rate system is priced based on the agency’s cost. The agency calculates the costs associated with a particular job and then adds what they consider to be a suitable markup.

Problems with Conventional Billing

Traditional billable hours are flawed due to several issues. The first problem is that it overlooks inefficiency and can even promote unproductive work behavior, whether intentional or unintentional.

Marketing agency employees are not motivated to minimize distractions, maintain accurate time tracking, or adhere to cost effective work habits. Clients should not have to worry about the efficiency of their marketing agency’s employees.

marketing agency pricing

The second reason why traditional billable hours are flawed is that conventional billing is unpredictable. Though clients are provided with an estimate, this estimate can vary significantly based on how much labor is actually associated with the task. Clients may be dissatisfied when their bill winds up being significantly more than originally estimated.

A final complication is that traditional billing is lacking in transparency. Clients know that they are billed by the hour, but they have no idea what work is actually performed for their account. Non-transparent billing can lead to trust issues between the client and the marketing agency.

A New Billing Method

There is a new model that is predictable and transparent. The billing method is a consistent monthly rate (or subscription) and it eliminates several of the issues associated with conventional billing. Matrix Marketing Group uses this approach and it is based on the value that we provide to the client rather than solely on associated costs. To do so, we charge a flat rate that includes numerous marketing tasks that we feel can offer significant lasting value for our clients. Benefits from effective marketing techniques are realized over a period of time rather than all at once.

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There are tiered billing models that are suitable for different sized businesses and are aligned with the company’s growth goals. The entry-level package is ideal for small businesses with a limited marketing budget. The mid-level package is attractive to small to mid-sized businesses who desire to grow their business. The final package is appealing to businesses striving for ambitious growth in revenue.

Why Marketing Package Billing Methods Makes Sense

The fixed price billing method is transparent. Clients know exactly what their rate includes and what services they can expect. They do not have to concern themselves with scope creep or paying for additional hours for an agency to complete a task. Also, clients don’t have to worry about a fluctuating billable rate if a more specialized staff member is required. Regardless of who winds up working on their account, they get the expected product for the same rate.

Billing based on value gives clients predictability. Traditional billable hours are flawed in part due to their variability. Predictability is a vital characteristic for small or new businesses with a limited marketing budget. The rate for the company’s marketing package is the rate that they pay for the agency’s services. There are no last minute surprises that may cause the client to rethink working with the agency in the future.

With fixed monthly costs, efficiency and strong work habits are encouraged. The firm bills the same, regardless of how many hours a project requires. This eliminates any incentive to work at a less than timely rate. Employees with superb work behavior are not punished under our model. They bill the same amount as an employee who takes twice as long to accomplish a task.

Traditional billable hours are flawed; this is an outdated model that can drive clients away. Our progressive billing system makes our services more affordable, drawing in a larger number of clients. Clients better understand the billing method and are more satisfied with our services. We focus on what value our services add by using flat fee pricing that applauds an efficient work environment.

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