Pricing is one of the most challenging aspects of running a white label ppc service. With a multitude of factors influencing cost —from ad spend to the complexity of the campaigns— how do you ensure you’re not underselling your services while also being competitive in the market? Here’s a comprehensive guide to help PPC agencies and freelance consultants price their white label services.
Understand Your Costs
Before you can price your services, it’s crucial to understand your costs. For many, this could be the ad spend costs, PPC tools, and software subscriptions, as well as labor, administrative, and overheads. It’s common to overlook the latter costs but accounting for all expenses gives you a solid foundation for pricing.
The Ad Spend Factor
Ad spend is typically the largest portion of a PPC campaign’s cost and is often used as a basis for pricing. Most agencies and consultants charge a percentage of the monthly ad spend, which can range from 10% to 20%. However, this can vary depending on the agency’s level of service and the client’s industry.
Infrastructure Costs
These are often fixed and include the cost of bidding and analytics software, CRM systems, and other tools that are necessary for running PPC campaigns. Allocating a portion of these costs to each client helps ensure that you’re not losing money, even on smaller accounts.
Labor and Overhead
Don’t forget to account for your time, your team’s time, and the cost of running your business. A simple formula to estimate labor cost is by multiplying the number of hours you’ll spend on the campaign by your hourly rate. Overhead costs should also be included, although in a more indirect way, to ensure that the business is profitable.
Determine Your Profit Margin
Profit margin is what’s left after you deduct all your expenses from your total revenue. Your profit margin should be high enough to cover costs, leave you with a profit, and allow you to invest back into your business. Setting a target margin will guide your pricing strategy. It’s typically between 20% to 40% but can be higher for high-touch services or specialized markets.
Competitive Pricing Analysis
Conduct a competitive analysis to understand what others in the market are charging for similar services. This can help you position your offering and gauge where you stand in relation to your competition. However, be wary of pricing too low, as this could compromise your legitimacy and quality in the eyes of potential clients.
Value-Added Services
Consider bundling or adding extra services to justify higher pricing. This can include adding SEO audits, landing page optimization, or detailed reporting analytics. Clients are willing to pay more for services that provide tangible added value, which can include anything from improved ROI to better customer insights.
Communicate Clearly with Clients
Transparent communication about your pricing is important for building trust with your clients. Use your pricing to emphasize the value that your service provides. Clear, concise explanations can go a long way in showing that you’re not just charging for the sake of profit, but for the quality and depth of your service.
Conclusion
Pricing white label PPC services can be a complex task, and it’s critical to get it right. Understanding your costs, setting a competitive yet profitable margin, and communicating the value of your services can help you develop a fair and attractive pricing strategy. Remember, pricing is not set in stone, and it’s okay to re-evaluate and adjust as your business grows and market conditions change.
