Running an agency can feel overwhelming, especially when client demands and pricing strategies collide. Many owners struggle, not because they lack skills, but because they set their prices way too low. Let’s explore how adjusting your pricing model can lead to significant growth and long-term success.
🚿 The Bathtub Analogy: Cash Flow Management
Ever feel like no matter how hard you work, your profits evaporate faster than you can generate new income? Think of your agency as a bathtub. The water flowing in represents new clients and income, while the drainage symbolizes overhead costs and low pricing.
- Visualize: 🎣 Imagine filling your tub with fast-flowing water. The drain—representing expenses and low fees—constantly threatens to leave you with little more than a puddle.
- Reality Check: Many owners are afraid to raise their prices, opting instead to attract more clients. The result? A stressful struggle to keep up. This ultimately leads to burnout or business closure.
Quick Practical Tip:
Instead of rushing to lower your prices to attract clients, reassess what value you provide. Aim to charge more and limit the number of clients you take on.
🏷️ Affordable vs. Premium Clients
Are you luring in bargain hunters who haggle over every penny? If your agency operates on a low-cost model, you’re likely dealing with clients who prioritize scarcity over quality.
- Key Insight: The agencies charged higher prices often attract better clients. Luxurious brands create a perception of value, leading clients to buy without constantly questioning prices.
- Illustration: 🏪 Imagine shopping in a discount store versus a luxury boutique. Discount shoppers come with complaints and low expectations. Conversely, luxury buyers seek exceptional quality and are ready to invest.
Quick Practical Tip:
Evaluate the pain points of your potential clients. Higher-paying clients have bigger problems that cost them money. Show them how your services resolve these pressing issues.
📈 Shift in Pricing Approach
Feeling skeptical about raising your prices? Understand that you have to identify pain points significant enough to warrant a premium fee. High-ticket clients may need solutions for problems costing them tens of thousands.
Example Transformation:
- Low-Ticket Proposal: “We’ll manage your social media for $1,500 a month.”
- High-Ticket Proposal: “Our campaign generated an additional 50 qualified leads, worth approximately $115,000. We can implement a robust lead generation system for a one-time investment of $5,000.”
Quick Practical Tip:
Package services in a value-driven language. Explain the solution you offer—not just the task. Help clients see your work as an investment into their future.
💰 Beyond Retainers: The Value of Payment Plans
Many agencies leap into retainer agreements thinking they’re the solution—but clients often view retainers as an ongoing expense. Switching to a payment plan approach can lead to long-lasting relationships and higher revenue.
Real-life Scenario:
With retainers, agencies might face clients questioning the value of their services month after month. After initial gratification wears off, retention becomes a challenge.
- New Model: Charging an upfront fee for a defined service package, followed by optional ongoing management, could provide:
- A one-time fee for a complete system (e.g., $15K, broken down into four monthly payments).
- More revenue per client than traditional retainers.
Quick Practical Tip:
Shift from a monthly fee structure to a one-time payment for defined value, followed by the option to manage ongoing services at a lower cost.
🔍 The Right Clients, Right Prices
The goal of an agency isn’t to simply land as many clients as possible. Instead, focus on attracting the right clients and charging accordingly. Quality over quantity is key.
Mathematical Breakdown:
- Payment Plan Scenario: Charge $4K per month, and with just 10 clients, you can earn a maximum of $160K/month by month five.
- Retainer Model Comparison: Compare that to the $2,500/month retainer—where the maximum revenue would plateau at around $75K due to churn.
Quick Practical Tip:
Don’t be afraid to market higher-priced packages. It allows for better delivery and justifies your pricing. You’ll attract clients who value your offering and are willing to pay for it.
📋 Key Implementation Steps
Transitioning to a new pricing model may feel daunting, but these simplified steps can guide your approach:
- Define Your Package: Identify services that provide clients with comprehensive value and can be delivered beyond your active involvement.
- Value-Based Pricing: Price based on the meaning and financial value you bring to your clients, not just your time.
- Quick Wins: Ensure clients see significant progress quickly, instilling confidence in their investment.
- Payment Structures: Develop attractive payment options that are easy for clients to accept and align pricing around results.
Closing Insight:
One successful client willing to pay your new, higher price can validate your shift. You’ll be surprised by how quickly it’ll become easier to sell this model thereafter.
🧰 Resource Toolbox
Here’s a collection of resources to support your agency’s growth and strategy adjustment:
- Unorthodox Digital – Work with us to scale your agency/coaching/service business
- 7 Figure LIVE Event – Join our next 7 Figure LIVE Event
- Mini Course – Get our FREE 5-Day Mini Course
- HighLevel – GHL for business management
- Join Unorthodox Team – Currently hiring
- Social Media – Follow Liam on Instagram
These tools can help boost your agency’s overall effectiveness and allow for greater growth opportunities.
By understanding the significance of pricing correctly and following these actionable strategies, you can revolutionize how you operate your agency. Higher prices, right clients—it’s all about value! 💡
