As a consultant or as a freelancer determining your pricing structure is one of the most frustrating parts of starting a business. It would be nice if you could just close deals and people write you blank checks. Figuring out exactly how to charge and what to charge for social media management is the cornerstone of an effective business.
If you were to charge too much, you won't land the clients. On the flip, if you charge too little you'll be broke and overworked.
So here's some advice from a social media consultant to all small business owners out there free of charge about dealing with the realities and costs of social media marketing.
Social Media Marketing Budgets are on the Rise
The average social media marketing spend is roughly 10 percent, with that figure on the rise, too.
According to Top 10 Digital Agencies:
“It has been found that, on average, the monthly cost of social media advertising is between $4,000 and $7,000. This is between $200 and $350 per day, which is an incredibly high cost.
There is an average monthly cost of $2000 to $4000 per month to create a Twitter account from scratch. It was revealed that a number of businesses pay an average of roughly $1000 and $2500 monthly to reorganize and revamp an existing Twitter account. To set up and operate a Facebook marketing account, PR agencies collect, on average, a monthly fee of $2500 to $5000.”
Those are some pretty significant figures that most small business can't afford. If you can, chances are you are hiring from a top tier agency.
What are small businesses supposed to do then, if they can't drop four grand on Twitter management?
Hire in a Top to Mid-Level Freelancer or Consultant
Finding the right freelancer or consultant doesn't have to be difficult. There are many sites to search for the right freelancer. But before you jump in and try to hire your first freelancer figure out these key elements first.
Decide Your Marketing Budget and Where You Wish to Allocate It
Knowing what the social media spend is and where it is being allocated can help you determine an effective strategy. If the client is spending $500-$2,000 a month on Facebook advertising, it would make sense to invest more resources into community management on that platform.
If they have a low social media spend, it might make sense not allocate resources to Facebook (a pay to play platform). Instead, you could focus your energies on emerging social medias like Periscope, Snapchat, Instagram, and Musical.ly.
If you don't know how to do this, pay 2-3 consultants for an hour of their time. Ask them to give you a breakdown of how they would tackle it for your business.
Pro tip: Never try and muscle free consulting out of consultants. While many will give you tons of free advice, you won't believe how much extra knowledge they have once you pay them. Trust us, we know you are trying to get free info out of us - it isn't hard to tell.
Create the deliverables, and tasks for each platform, after you understand what the social media spend is, and where it is being allocated (some consultants might even help you figure out what you need).
These tasks and deliverables may be:
- Creating 7-10 daily tweets
- Creating 2-4 Facebook posts per week
- Writing 1-2 blog articles per month
- Monitoring keywords, hashtags, and trending topics
- Increasing relevant followers by 100 new followers a week
- Create, manage, and optimize 1-2 advertisements for Facebook and Twitter
This will help you price different social media managers and compare apples to apples. This also helps reduce ambiguity in the scope of a project.
Some people like to use fancy language to mask what they are doing.
“Daily activities to increase engagement”
“Monitoring relevant hashtags and creating timely CTA's”
“Strategic management, and implementation of weekly Facebook and Twitter account”
Sure those phrases sound fancy but they don't really say anything. There is a lot that can be interpreted. Concise information is the best way to approach any business deal of this magnitude.
Hourly, Retainer or Fixed Project Based Pricing
Pricing at an hourly rate is by far the easiest to set up. It is the status quo of pricing. A contractor will charge a certain amount per hour and bill the client accordingly. This is a very easy and transparent system to work out. As the contractor becomes more well known they have an opportunity to charge more per hour. The clients only pay when the contractor completes hourly work.
The downside to hourly based work is that usually, the contractor has to do the work first, and get paid. If a client refuses to pay (and believe me this will happen) they are out the time they worked.
Most clients will “cap” the amount of hours you work for them. It's smart because theoretically, a worker could work a bazillion hours and just charge them for it. It's a safeguard for the client and the freelancer. However, it can also be a hindrance.
On more than one occasion, I have not been able to hit benchmarks due to a change in Facebook/Instagram algorithm. What was working just stopped, and the hourly cap didn't allow me to hit those benchmarks. Truth be told, this made me stop doing hourly based work more than anything else. Telling the client you didn't hit benchmarks is the worst.
Hopefully, you'll create an understanding relationship that will allow you to increase or decrease your weekly hours based on situations that arise.
Get Paid on Retainer
This is a scenario where the client pays a certain amount in advance as credit for a number of hours. They buy out a certain amount of hours from you to guarantee that you'll be available to work for them. The freelancer or consultant are to perform the tasks and services agreed upon for said many number of hours or until they hit a benchmark to re-evaluate.
I personally recommend retainer based models for both parties. The freelancer gets paid in advance and they don't have to wait around to pay their bills. The client knows exactly the cost is going to be and what they are getting in return.
Project Based Pricing Can Be the Most Challenging but Can Also Be the Most Profitable
The client and the freelancer determine the scope of work. This includes what services will be rendered, what benchmarks will be achieved, and what the cost will be. It is very similar to a retainer-based model, except there are no set hours attached.
If the client is charged $2,000 for a project and it takes the freelancer 5 hours to complete-the freelancer makes bank! But if it takes the freelancer takes 400 hours to complete the same project, they make $5 an hour. Both parties know up front nd get to negotiate the cost.
The truth about social media marketing budgets is that they vary widely. The more you invest in social media, the greater return you should have (as a general rule).
Truth be told, your competition is investing more and more into social media. You should be too. I see a day where 80 percent of marketing budgets are social media with the remaining 20 percent being other avenues.
Are there any more lies when it comes to social media budgets?
Budgeting Photo via Shutterstock
This article, "The Truth About Social Media Marketing Budgets" was first published on Small Business Trends
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