One of the reasons so many of you read Social Media Explorer, or so I’m told, is that I have developed a reputation of someone who gives honest assessments. It might be a review of a social media marketing tool, a critique of a company’s social media marketing programs or campaigns or even reaction to a hot topic in the social media and digital marketing space. I’m honored to have earned your trust in that regard and hope to continue providing as unfettered and unbiased opinion as I can.
An area I’ve grappled with over the course of writing about the various vendors and tools that might help you with your social media marketing efforts, however, is pricing. Some very useful tools, like social media monitoring entry SocialMention.com are free. On the other end of the social media monitoring spectrum, you have tools that offer much more in terms of features and functionality. Some even cross into the category of market research tool or social media measurement instrument. Access to these requires considerable investment. As such, I have referred to them as, “expensive.”
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But that is a judgement call. I personally can’t afford hundreds of dollars per month for a social media monitoring solution like Sysomos, a consumer research tool like Consumer Base (SME partner) or even a robust monitoring/measurement/research instrument like Collective Intellect. But these tools aren’t meant for individuals. Nor are they meant for a social media consultancy. Their customers are companies with marketing budgets who value the information gleaned from the tools at levels an individual can’t fathom. A $500 monthly investment ($6,000 per year) is great value to a medium sized business with a $250,000 marketing budget that needs to know what people say about them online and respond to that accordingly.
Several friends of mine have lamented the frustrations of pricing themselves. Consultants like me aren’t taught how to value our own services in college. At the least, we’re guessing. At best, we put some thought and research into pricing and come up with a value statement: An hour of my time, based on the knowledge and experience I bring to the table, is worth X dollars.
When I left Doe-Anderson, I took its blended rate and added a few dollars per hour thinking my services and knowledge were in short supply. I should be paid more than the average hourly rate for a marketing worker. I took into account that pricing in Louisville is different than pricing in New York, San Francisco or Los Angeles and that my ideal customers (medium- to large-business) were in short supply in my city.
One of the first people I disclosed my hourly rate to (a public relations account manager in town) laughed at me. “You can’t charge that in Louisville!” But I wasn’t charging that in Louisville. My customers were, for the most part, elsewhere. Later, I found out what a friend and reasonable comparable consultant was charging per hour. It was almost double my rate. My prices went up.
Is public relations counsel worth $85 per hour? It is in Louisville. Is digital marketing work worth $150 per hour? It is in Chicago. Is strategic counsel worth $250 per hour? It is in some market, somewhere. Is social media marketing counsel worth $350 per hour? Is an industry analyst’s insights really worth four figures an hour? Not for some companies, but absolutely for others.
Now that I’m working on an online learning community and product, pricing has again perplexed me. What is the value of access to expert-level advice on digital and social media marketing? Many people would answer, “zero dollars,” because with Google and the right connections on Twitter, you can probably get a decent answer to your question. But what if that community came with robust content? Is it worth something then? To you, perhaps not. To fellow social media compatriots of mine, certainly not (and some are rolling their eyes at me for trying). But to my Aunt Suzanne who is tech averse and wants to learn how to use social media tools more effectively for both personal and business reasons, it’s worth a little investment. I’m ready to gamble there’s more of her than there are of my eye-rolling friends out there.
But is it worth $9.99 per month? $9.99 per year? $99.99 per month or year?
For $300 per month, you can learn from the best SEO minds around. For $47 a month and a $97 sign-up fee, you can get access to some great marketing seminars and an active forum community built around the notion that marketing doesn’t have to be sales and sales doesn’t have to be sleazy. For as low as $14 per month, you can use a tool that builds web forms, surveys and the like for you. Access to all that information, or the skills required to build the end product, is available online for free if you go looking for it. (Note: All links in this paragraph are affiliate links. I like cheeseburgers.)
At the end of the day, the price of something is not just what you have to pay. It’s the suggested value of that product or service to most of the people that product or company believes will buy it. If you don’t like the price, perhaps it wasn’t meant for you. If you need the service later in life and your circumstances change (you have more income, your department has built a budget for such an animal, etc.), maybe you’ll like the price just fine.
How do you tackle pricing for your product or service? What questions do you ask your customers to understand what their comfort levels are? What about vendors you use or software subscriptions you sign up for? I don’t want to know how you justify the price, I want to know how you determine the value of a particular tool or service. The comments are yours.