Pricing Philosophy: How to think about agency pricing

Written by: Karl Sakas

Pricing is ultimately about what your clients are willing to pay. There are three agency pricing models—hourly, milestone, and value-based. Agency life is easier when you get in front of clients who are happy to pay whatever you ask. Beyond the model, you also need to decide how you position your pricing, how to anchor value, and more. Let’s look at what you you can learn from my pricing philosophy.

Karl’s Agency Pricing Philosophy

Here is my philosophy on agency pricing:

  1. Perception: Price is in the eye of the beholder. That means one person might think $5,000 is exorbitant, while another thinks $100,000 is a steal.
  2. Value-Anchoring: Price isn’t about cost. It’s ultimately about what your client thinks it’s worth, not what it cost you to produce it. You’d ideally always anchor price against expected value, rather than how the price compares to zero. (Because zero price = zero value.)
  3. Packaging Counts: Good presentation makes things seem more valuable. This applies to pricing options, too—”$10,000 down and $5,000 a month for eight months” sounds less imposing than “$50,000.” Offering high-value, low-cost bonuses helps, too.
  4. It’s Just Business: Price isn’t a referendum on your personal value as a human. It’s what a business prospect thinks your agency’s services are worth to their business.
  5. Confidence: Your confidence level on pricing will fluctuate based on your sales pipeline. The best way to feel confident about your pricing is to build and maintain a strong sales pipeline.

In the end, find ways to get clients to focus on the value in working with you, not the cash price-tag. During a recent sales call, I asked a coaching prospect if he had any questions about my coaching process. He said, “No, I’ve been following you a year or two; I know what you do.” Instead, we focused the call on his goals and the logistics of getting started. It was a question of “how soon” instead of “if” or “how much.” Question: How do you approach pricing at your agency?

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