How Does Price Have an Impact on Marketing Strategy?

There are many reasons why agencies choose to do retainer-based pricing models, and it’s not what you may think. For us, it’s about realizing the full potential of the marketing program, and as we use AI-powered Robotic Marketer to develop a data-driven marketing strategy, we can predict outcomes in a way that most other companies cannot.

Pricing strategy is critical to any business, including digital marketing services. The pricing strategy adopted by a digital marketing agency can impact its target market, profitability, brand image, and competitiveness.

Here are the six different pricing strategies for digital marketing services:


Cost-Plus Pricing

A Cost-plus pricing strategy allows digital marketing agencies to add a markup to their cost in order to determine the price of their services. The markup is added to cover the agency's overhead costs and to generate a profit. This type of pricing strategy is often used by agencies that offer a wide range of digital marketing services. The cost-plus pricing strategy is straightforward and simple to understand, making it a prevalent choice for various agencies.

Value-Based Pricing

When marketing agencies choose to use value-based pricing, they set prices based on the perceived value of their services to the customer. This type of pricing strategy considers the benefits that the customer will receive from the services, such as increased website traffic, higher conversions, and improved brand awareness. The agency sets its prices based on the value the services will provide to the customer rather than the cost of delivering the services. Value-based pricing requires marketing agencies to possess a deep understanding of project management while focusing on long-term goals. 

Competition-Based Pricing

Competition-based pricing is a pricing strategy where an agency's price points are heavily influenced by its competitors. This type of pricing strategy is often used by agencies that offer similar services to other agencies in the same market. The agency sets its prices based on the prices offered by its competitors to remain competitive and attract customers. Competition-based pricing allows agencies to be seen by customers as a viable option price-wise and ensures customers will not be surprised by price points.

Package Pricing

Digital marketing agencies that implement package pricing offer a set of services at a bundled price. This type of pricing strategy is often used by agencies that offer a range of digital marketing services, such as website design, search engine optimization, and social media management. The agency packages its services together and offers them at a bundled price, making it easier for customers to understand the value of the services they receive and the price they will pay.


Retainer Pricing

Retainer pricing differs from most pricing strategies; it is essentially an agreement between a marketing agency and a customer. Marketing agencies set recurring fees for their services for a certain time period. This type of pricing strategy is often used by agencies that offer ongoing digital marketing services, such as social media management and search engine optimization. The agency sets a recurring fee for its services, which the customer pays on a regular basis, such as monthly or quarterly.

Digital marketing services have various pricing strategies, including cost-plus, value-based, competition-based, package, and retainer pricing. The right pricing strategy for a digital marketing agency will depend on its specific business goals, the market's unique factors, and the services offered. 

The key is to choose the right pricing strategy that meets the agency's goals and provides value to its customers. By adopting the right pricing strategy, a digital marketing agency can increase its profitability, attract customers, and build a strong brand image.