Increasing the prices for your agency services can be overwhelming, especially working through the transition with current clients who might be at a rate that’s lower than you’d like. The thought of trying to charge your clients more may make you feel guilty or afraid. Guilty for charging more to those who have been loyal and helped your agency succeed, and afraid that increasing your rates will cost you work, or at the very worst, a client. But, to sustain your increasing business costs and growth, a rise in price is inevitable as your agency grows.

There are a variety of ways to bill a client, but most commonly agencies follow one, or a mix of these four options:

  • Hourly. Pretty self-explanatory.
  • Value pricing. Charging a client based on their perceived value of services provided.
  • Project-based. Similar to above, but the total project will be a flat rate, with scope creep negotiated as a separate cost.
  • Retainer-based. Agency receives a set amount from the client to work on services for a fixed amount of time.

However, one of the most efficient ways for your agency to become more profitable is by increasing your billable rates. I’ve owned a marketing agency for a year and a half now and have slowly been able to raise my rates and grow my company, so let me offer you a few strategies to help ease into that conversation.

One. Know your competitor’s prices.

It might help to begin by understanding how your prices match up against similar and competing agencies — whether that’s locally, or if you compete against agencies nationally due to the nature of your clients’ industries. Do some research to see how other companies are offering specific services and if you’re over or under that price. You never want to be too low, but you also don’t want to be way overpriced. Many agencies will list packages or retainer fees on their website. You can also set up phone calls with other marketing agency owners who might be in your professional network and swap best practices and advice between each other. Your goal, obviously, is to understand how they charge and how they grow.

Two. Know the average rate of materials.

Understand the going rate for some of the materials you’re charging your clients for, such as blog content, social media monitoring and web banner ads. Try opening a job description to get responses and pitches back from service providers such as freelancers or contract employees. If freelance writers are quoting $250 – $300 to write one piece of blog content, you can use this as an “industry standard” to share with your clients. The same goes for project-based work. If you’re aware of an agency or company that provides similar services as you, for example, direct mail campaigns, try to find out their costs and what’s included in their services.

Three. Know the value of your client.

Another consideration is to assess the profitability of the client. Based on your current billing strategy with this client, are they making you any money? Or are they costing more than they’re worth? I’ve been in a situation where we have steady work from a client, but I fight tooth and nail on scope creep, or whether a deliverable was up-to-par. I end up eating costs they’re not willing to pay. In this situation, it’s best to just be frank on how the relationship is costing your business money, and you need to increase costs for it to make sense to continue working together. If they’re still not willing to meet you on costs, consider letting the client go if you have space in your monthly budget or more work than you need. They’re negatively affecting your bottom line.

Four. Know your client’s ROI.

One of the most critical points is to understand the return for your client on the deliverables your agency produces. It’s essential to always tie your agency’s work back to numbers. For example, if your 10 pieces of content per month are going to grow your client’s organic traffic by 10% per month, and the client’s organic revenue by 5% per month — this math proves how their initial investment is going to produce revenue and growth for their business. As long as your price is a fraction of the return, this should be an easy number for them to swallow. After all, what client would have a problem spending $10,000 a month if it’s proving a growth in revenue of $30,000 month over month? That’s a net profit for them of $20,000. This type of information helps determine the client’s ability to afford an increase in prices. These numbers are good to have in your back pocket, and in general, you should always understand the type of return your clients are getting from your services.

Five. Know when to change up your billing structure.

Consider doing away with billing by the hour. If your agency is efficient, you won’t bill as many hours as one with lower productivity. So, a more efficient agency is less profitable than an agency with low productivity — that doesn’t make sense, does it? Replace the billable hour with other pricing models such as a project- or value-based model (see common billing practices above). Both billing structures allow you to price larger projects and incentivize your employees to find ways to work as efficiently as possible.

Working with clients who understand your agency’s value and the value of the services you offer is a must. These clients will be more willing and open to your increase in prices because they’ve seen the value you’ve brought to their business. Clients who are right for your business will stick with you.


Jeanna Barrett is the Founder & Chief Strategist of First Page, an award-winning online marketer and an expat entrepreneur. Through content, social media and SEO, Jeanna uses the power of words and data to drive growth in brand awareness, organic traffic, leads, revenue and customer loyalty. She has a combined 12 years of inbound marketing experience at venture-backed startups, digital agencies and Fortune 500 companies, with an expertise focus on small business and technology. She’s been named ‘Top 40 Under 40’ of brand marketers and ‘Best in the West’ for financial technology marketing. In 2016, Jeanna left the U.S. to lay roots and build her business in Belize.