Productized Services May 29, 2020

Launching Productivized Sevices for a Performance Agency. Need Thoughts.

Saajan Jain @Sj20

Hi Guys,

How is WFH doing to everyone?

I am running a performance marketing agency since two years now & we manage all kind of paid media for different ad budgets & the payout is either retainer or commission or completely random as we do anything & everything. Mostly it's based on media spends but due to changing environment, it keeps changing & our payout also reduces for those months. I want to go ahead & launch fix service packages giving a better offering & fixing a standard price structure

Here is what I have thought.

1st Tier
Retainer - 3000$/month
Offerings

  • Complete paid media planning, execution & automated reporting (through google data studio, etc)
  • Leads Integration with CRM/Excel (in case of lead generation for services)
  • All creative designs (for ads)

2nd Tier
Retainer - 5000$/month
Offerings

  • All services of 1st tier
  • 3-5 Brand Videos
  • Paid Media Management for budgets till 100000$/month
  • Social Media Management (planning, design & execution)
  • If the ROAS (return on ad spends) crosses 3x for the client, we take 2% of total ads revenue with retainer.

Would love to hear thoughts on this structure? Has anybody done for a digital agency? How much have you paid in the past? Any other feedback/suggestions are welcome.

  1. 3

    I can't speak for the particulars, but I think the idea of "full service on retainer" is a great idea (and I'm currently doing a private beta for the same in analytics).

    Pricing seems to fit that model well - the top tier, at $60k/year, is a relative bargain compared to retaining an agency, and presumably you could carry a large enough clientele at once to make you rich.

    Only thing I'd be wary of is the 2% take - in certain categories that could really impact the store/brand's margin, and there is an adverse incentive for you to widen the net to capture more transactions (say, bumping from a 7-day conversion window to 30-day).

    1. 1

      Yes, I am still wary of the 2% thing so will be talking to more people on this, also its quite difficult to track the exact revenue based on different conversion windows. The rest makes sense. Thanks!

  2. 1

    I'm working something similar for paid ads and have put together a few different models, one of which is also based on a % of revenue.

    My concern with that model is that clients might like the paid on results angle but it brings suspicion once the numbers start to (hopefully) get large. I was thinking that to counter this, things like the attribution model and conversion window would need to be part of the agreement from the start.

    Also, invoicing and chasing a different amount each month would be hard work unless it could be automated somehow.

    I'm looking at just one particular aspect of paid ads though and probably in just one industry as we should always niche down eh!

    1. 1

      This is great. .Would love to how it would work for you. I haven't thought much about niche yet but thats good to know & focus.

  3. 1

    I think this would depend on how you're getting your leads. Price expectations can vary vastly if the leads are outbound generated vs inbound.

    1. 1

      Outbound as in?