Points pricing offers clients of service businesses more flexibility at a price they can count on. Instead of having to renegotiate a contract, a client can simply re-allocate points to the strategy they need.
Market Veep began like a lot of other agencies. We had big hopes and dreams, a few computers, and almost no set processes. Most of it we figured out as we went along.
Some ideas worked; some didn’t. Others we thought would be great turned out to be not so great after all.
For example, we switched between three different project management tools in a year and a half. It was frustrating, but it helped us discover how we work best as a team. We wound up better off than if we had kept the same tool and let the problems persist.
We don’t like to settle. Over time, we put our processes and best practices into place. But we improve them continually. Our goal is to streamline our processes to make it easier for us to be a part of our clients’ teams.
That means less stress, better alignment, and more collaboration. If something doesn’t work — fix it. Above all, we want to make sure we can give our clients the top-notch marketing they deserve month after month.
Finding the Ideal Pricing Model
When it came to setting prices for our services, we knew an hourly rate just wouldn’t cut it. It didn’t seem fair to our clients because it made quoting prices too inaccurate. We wanted to be sure that the price we quoted was the price they paid, and we didn’t want to surprise them with a bloated bill at the end of the month because a project took longer than expected.
So instead, we decided to charge by the project, at first.
Projects that provided more value were more expensive than smaller, less valuable ones. The most valuable projects also tended to be the most complex.
For example, a content offer provided a lot of value because it converted visitors into leads. It required original writing, original design, calls-to-action, a landing page, various approvals, and it needed to be shared on social media.
Meanwhile, setting up a business page on a social media platform was relatively simple and inexpensive (but still very important).
It worked well for a while. Most of our clients were happy with the services they paid for month after month. But we ran into one glaring issue: Our clients needed more flexibility with their marketing strategies and their chosen projects.
If we needed to switch to a different strategy, we had to crunch the numbers and pull out the contract.
Maybe they wanted to forgo a content offer and add a few pages to their website. How much of their monthly budget would be left over? What would they spend it on? What if they couldn’t afford the new strategy they wanted?
All-in-all, it was a frustrating and time-consuming experience for our clients and for us. So, we started looking for other options.
That’s when we discovered points pricing.
How Points Pricing Works
Now, we’re certainly not the first agency to use points pricing. There are even some companies out there whose pricing models are “proprietary.” But using points is gaining popularity in many B2B service industries, not just the marketing sector.
The most basic points pricing system involves a certain dollar amount for each point. The service company sets point prices for each of their services and the client spends points based on which projects they want.
For example, the client might purchase a set number of points for each month. They can spend those on an array of services, like blogging, monthly emails, a content offer, PPC ads, sales collateral, etc.
Together, all the services should make a comprehensive marketing strategy. It makes sense. But this model doesn’t take the value or complexity of each project into account.
For example, a website redesign is a large project. But every website is different. A very small site may take 1 month to design. A larger one may take a few months or more.
Some websites may have coding issues in the backend that need to be resolved. Some websites have eCommerce integrations and other plugins.
With this model, a website that has 10 pages would have the same cost as one that has 150 pages. There’s no way to ascribe an accurate number of points to a website redesign service because websites vary by client. That makes this model a recipe for client disappointment. The service company can’t do work for free, and a large website project that’s priced the same way as a smaller one is bound to go out of scope.
Just as the HubSpot pricing model, with it's various packages and tools, is able to provide users with the right features at the right price, so too do we strive to offer a marketing pricing model that accommodates marketing budgets of all shapes and sizes.
Points Pricing Based on Value
A better points pricing system takes the value and complexity of each project into account, as well as the exact needs of the client. Instead of saying every project costs the same amount of points for every client, the service company provides a point quote for each project based on each client’s unique needs.
Many projects may still cost the same number of points, however.
For example, a blog post that’s 750-1500 words has a similar level of complexity and value regardless of the client. A revitalized website may vary. Either way, the client gets exactly what they need at a price and timeframe that’s reasonable for both the service company and the client.
Also, the client gets an accurate quote for the project or service they chose. They don’t have to worry about overpaying, and the service company doesn’t have to worry about going out of scope.
If they decide to change projects, they can just re-allocate the points in their monthly retainer. Every project has its own point value specific to the client. There’s no need to renegotiate a contract.
The Results of Points Pricing
As a result, we’ve seen several advantages to our new pricing model.
Our clients have realized some major benefits:
- Clients have more flexibility with their marketing strategy
- Our client onboarding process is much faster
- Clients get a clearer picture of where their money is going
- Clients can take advantage of new marketing opportunities quickly
- There’s no need to renegotiate a contract when priorities shift
- We can manage client projects more efficiently
- We’re able to deliver services much more effectively
- Our agency provides clients more accountability and transparency
- Our pricing is client-centric, rather than agency-centric
If our client is releasing a new product or service, they can run an ad campaign for it without needing to purchase additional points. All they have to do is suspend a project or projects of equal value and reallocate their points.
If our client feels like they have enough content offers, they can allocate those points to SEO, backlinking, directory listings, social media, or any other strategy of equal value.
We understand that priorities may shift over the course of a year or even over the course of a few months. We want our services to be agile enough to address these new needs.
With points pricing, our clients get exactly what they need for a price they can rely on.