Knowing how to package and present your services is the key to selling them.
The truth is that humans operate on certain psychological principles. Even if your agency’s services are technically superior to the competitor, the winner is the agency that better captures the perception of prestige and value.
This means that even if you build the brand and acquire the right talent, you won’t turn a profit if you can’t figure out the best way to package your digital marketing service offerings.
The trick is to lean on tiered subscriptions, and we’re here to show you how to do it.
How to Offer Digital Marketing Services?
There are two primary strategies that agencies use to market their services.
The Volume Pricing Model
The first of these is known as volume pricing. With this model, you establish your pricing rates based upon the volume of items or services purchased. An example of this might look like this:
- 1-5 blog articles per month – $50 per article
- 6-10 blog articles per month – $42 per article
- 11-15 blog articles per month – $39 per article
The general strategy here is to motivate your customers to spend more by creating the perception of value. Though the cost per article decreases, you are ultimately selling more and achieving a greater profit. The customer feels that they are making a better investment by claiming the lower rate per article even though they end up spending more.
The primary benefit of using volume pricing is that it communicates your pricing formula to the user. The major downside is that it generally does not present as many opportunities for profit as tiered pricing.
The Tiered Pricing Model
The tiered pricing model is more common among digital marketing agencies.
With tiered pricing, you package your services and their corresponding monthly limits into packages that you will price according to their perceived value. These tier packages are not exclusive to marketing and are likely used in just about every subscription service you currently pay for monthly (i.e. Netflix, Spotify, Dollar Shave Club).
Let’s take a look at an example:
The tiered pricing model allows for convenient viewing of the offerings within each package. Users can quickly compare costs and make an informed decision before purchasing.
You’ll likely find pricing tables just like this on virtually every digital marketing agency you’ll find online. Let’s explore what makes the tiered pricing model so popular and effective.
Why You Should Use Tiered Pricing for Your Digital Marketing Service Offerings?
We recommend the tiered pricing model as it offers the following benefits:
1. You Keep Your Customers on Your Website
When making an informed purchasing decision, online consumers like to compare. It’s common for users to compare a product or service on several different websites before deciding where they want to spend their hard-earned dollars.
When you utilized a tier pricing comparison block like the one above, users are far more likely to compare your plans versus each other as opposed to comparing them to a competitor. This is a psychological strategy that preoccupies a person’s mind with the potential value of your plans only.
Additionally, these pricing tiers simplify the process of gathering data for a purchasing decision. Even if a well-written, long-form blog exists to specifically compare the services offered by two competing companies, most are going to respond best to these types of easy comparisons.
2. You Can Package in Under-Performing Services
It’s expected for an agency to have services that sell far better than others. In our experience, Facebook Ads and Google Ads campaigns perform well as they typically result in increased conversions and more immediate results. Conversely, standard content writing is not as popular.
If you find that one of your services does not sell as well, it’s not necessarily indicative of the quality. Rather, when faced with a choice, your customers are going to pick the sexier option.
If you package your services into set tiers, it’s much easier to incorporate your under-performing services in a way that increases the perceived value. While purchasing a blog from a freelancer typically won’t cost much on its own, adding several blogs per month to an existing tier can automatically increase its worth.
In these example tiers for SEO services, we distinguish the perceived value of each plan in two ways. The first is by increasing the number of hours offered with the existing service from the first tier. The second is to add a service that is not featured at all in the lower-tier plan.
While we know the standard cost for a quality blog is not much, what matters is what your customers perceive. You increase the value of Tier B by packaging in a product that the customer might not otherwise buy. However, when packaged in as an added benefit, the offer suddenly becomes much more appealing.
Essentially, segmenting your offerings into tiers can present opportunities for automatic upsells without needing to ask for them.
3. You Control the Perceived Value
As we touched on in the example above, it’s the direct comparison that dictates the perception of value in the mind of a customer. When you create service tiers and progressively increase your offerings, customers assume that the higher tier is more valuable regardless of what each added service is worth.
It’s for this reason that the tiered pricing model provides a greater opportunity to drive company profits. As long as you can adequately present the value of your tiers, you get to control the pricing.
Let’s return to the Netflix example above. They price their Basic tier at $8.99 per month. This is their minimum viable product. It’s the bare minimum that they can offer that will attract customers while still generating a profit.
The next plan offers minor improvements at nearly double the monthly cost. Netflix is likely capable of selling this tier for less, but the perception of value is baked into the tiers. The middle tier is even titled “Standard” for added measure. For new buyers, this automatically calls attention to the higher-cost plan as paying for the “Standard” sounds more attractive than being a “Basic” member.
How to Build Your First 3 Marketing Service Offerings?
Now that we’ve analyzed the benefits of utilizing a tiered pricing model, let’s explore how to go about building your first three packages:-
Your Three Tiers – Basic, Premium, Elite
These are not necessarily meant to be the names of your three tiers but indicate the progression of value with each new tier.
- The First Tier
The first tier serves as an entry point for anyone that wishes to get a taste of your digital marketing offerings.
This package should contain the bare minimum amount of services and features necessary to both attract customers and generate a profit. Aiding customers with the basic tier should realistically require a minimal time investment from your team.
Let’s take a look at the first platform paid tier that customers can purchase when using DashClicks:
- 5 Team Member Seats
- Unlimited Sub Accounts
- 1,000 Email Sends per Month
- 100 SMS Credits per Month
- 50 GB File Storage
This initial tier package offers an attractive selection of benefits that can realistically serve a small business. The cost is low according to our MVP, while still allowing us to offer great features.
The important thing to remember with your first basic package is that you don’t want your customers to feel basic. If the first tier feels cheap or not worthwhile, they’re not going to invest their money into your business. By comparison, your middle tier will feel like the real basic tier and will not make customers feel like they’re purchasing a valuable upgrade.
Your basic customers are important as they’re the ones who are essentially sampling your digital marketing offerings. If you capitalize on the opportunity to impress, you will have a much easier time convincing this customer to upgrade at a later date.
For this reason, you certainly won’t want to name this first tier “Basic.” Instead, try to name your tier something that indicates the tier status without diminishing its worth. For this reason, names such as “Starter” or “Lite” are very common. When they’re convinced that your services are worth it, they’ll be excited to change their status from being a starter to becoming a premium member.
- The Middle Tier
The middle tier should realistically be your most popular service package. It offers a clear middle ground that separates the customer from being “basic” or a “starter.” It also offers an attractive selection of services and benefits at a lower monthly rate than your expensive, elite tier.
For the middle tier, you might want to utilize a naming convention that enhances the sense of value and provides a sense of higher class. Many businesses might utilize the term “Premium” or “Advanced.” Our naming conventions see us calling our middle tier “Plus,” whereas we save our most premium value for later.
Let’s look at our Plus tier as an example:
- 10 Member Seats
- Unlimited Sub Accounts
- 5,000 Email Sends per Month
- 500 SMS Credits per Month
- 100 GB File Storage
To further enhance the value, users also gain access to additional features within the various platform software. There are several things to point out when we compare the first tier to the middle tier.
The first is that all of the listed benefits double in quantity or otherwise increase significantly. Gaining access to double the number of team member seats is more sensible for your everyday marketing agency. You also gain access to more messaging capabilities and file storage to accommodate the scope and scale of your agency.
If that’s not enough to convince someone that the middle plan is worth the extra monthly fee, the expanded capabilities of the platform software will do the job.
It’s also not just about comparing the plans directly. There’s also a unique psychological effect that happens when a person purchases a more expensive plan over the least expensive one. The customer typically associates the name of the plan with how they view their agency.
If you name your middle plan the “Premium” tier, a customer is likely to think “My agency is important and worthy of Premium.” This is as opposed to feeling as though their agency is small or basic. Suddenly, it’s not only about the services provided but about the feeling of worth associated with being a member of that plan.
Finally, it’s important to reiterate that you don’t want the gap between your plans to be so extreme as to alienate your basic-level customers. There should be an appropriate increase of offerings that directly relate to the increased monthly value.
Test out different pricing schemes and nail down your middle-tier. Getting the price right here is the key to motivating your basic customers to upgrade when the time is right.
- The Elite Tier
This tier is the best package that your agency can realistically offer. The Elite tier will only appeal to a certain class of a customer by design. You’ll reserve your higher tier for those who want access to the maximum level of service your agency can offer to a single client. This should also include additional bells and whistles that create a sense of undeniable value.
However, you can start building your elite package by simply taking the same features and services offered in lower tiers. You will need to increase the limits of these features by a notable margin so that the customer does not feel as though they are overpaying for marginal improvements.
Let’s take a look at our very own elite tier:
- 20 Team Member Seats
- Unlimited Sub Accounts
- Unlimited Email Sends
- 1,000 SMS Credits per Month
- 250 GB File Storage
The price per month is a notable increase from the middle-tier plan. However, we once again greatly increase the value of the same deliverables. By increasing our quantities by double or more, we’re already off to a great start. Setting one of those deliverables to “unlimited” also implies a special level of treatment reserved for high-paying customers.
However, the cost per month is still an issue. While there may be customers willing to pay this monthly rate, we would benefit from adding a few more features to truly seal the deal. This is where you will need to get a bit creative and think of ways to truly make those customers feel special.
A common tactic to increase the value of an elite plan is to offer an exclusive support line. A customer that’s paying top-dollar will likely feel entitled to priority service, and they’re right. Because the elite tier generally only applies to a small selection of customers, offering this priority service shouldn’t become a burden.
An additional idea is to throw in some smaller, add-on features that your agency might sell a la carte. If you cannot realistically provide free add-ons, you may be able to offer them at a lower rate that’s exclusive to elite customers. What you’re able to provide will largely depend on your offerings and the capabilities of your agency.
With your elite tier, it’s important to remember that you’re now marketing to a higher class. Because most will want to spend less, you shouldn’t expect to sell your elite plan as often as your middle-tier plan. Instead, you want to curate a package for the elite customer that’s truly worth the asking price. As long as the value and quality of service are present, you’ll have an easier time keeping your elite customers on board for the long term.
Build Attractive Packages for Your Digital Marketing Service Offerings!
Packaging your digital marketing services into attractive tiers is the best way to keep customers on your site while controlling your profits.
Allow your customers to dictate which deliverables are most valuable to them. Then, take those same deliverables and scale them up in a way that correlates to a progressive increase in value. Further enhance the value of subsequent tiers by packaging in additional services that are generally low-cost to implement, yet valuable to a customer’s success.
Additionally, be mindful of customers in one tier when creating benefits for the next tier. An increase in a tier’s price isn’t simply to generate more profit but to communicate to customers that the added benefits of an upgraded tier are worthy of the additional cost. You want your customers to aspire toward the upgrade rather than feel alienated or ripped off for purchasing a cheaper tier.
Finally, remember that any package is only as valuable as the quality behind the actual service. Make sure that your team is ready to provide excellent service to all customers regardless of the package they purchase. Instilling satisfaction is the best way to create loyalty and encourage customers to invest more in your digital marketing service offerings.