When did your agency last review its pricing strategy?
If it was before COVID-19, then it was probably in 2019 or early 2020.
Have your staff salaries increased since then?
Most likely you are paying your team more than what they were earning in 2019, if you haven’t increased your hourly rates, the additional cost of higher salaries and other costs will be eating into your profit margin.
To review your rates – here are a couple of simple steps you could do today:
- Increase your base hourly rates by the Wage Price Index each year.
- Apply the industry ‘3 times’ rule to today’s wages.
- Consider alternative compensation models which incentivise your agency and client to focus on the Key Objectives of the campaign – read the suite of KMint Pricing booklets.
With a cleverly designed pricing model, the above computations will be a cinch. This is one of my personal favourite projects, so if your agency would like an injection of price modelling expertise, consider a fast injection of KMint Consultancy to get it done right away.