If you’re trying to get a handle on the price of marketing for your home service business, you are far from alone. It’s why we’re doing this You Ask Us and We Answer series.

In general, our guidance is that you should expect to spend approximately 10% of your revenue on your marketing.

Again, that is just a very broad answer. We also have an article that goes into greater detail on what that marketing budget should cover.

However, in this blog, we will explain how we arrive at our prices, with special attention to:

How our costs impact the amount of money you pay for marketing.
How other companies try to offer below-market prices.
Why bargain basement prices are never really a bargain.

How Do Marketing Agencies Determine Pricing For Their Services?

In a word, time determines the price of a marketing company.

While we also have some overhead from tools and other fixed costs, marketing is primarily a service.

“Profit margins are a consideration,” adds Mark Sherwin, President and Co-Founder of LeadsNearby. “People tend to think that a marketing agency is super profitable, but when you subtract the people costs from the revenue, you see that many firms are down around 4% profit.”

Just like your business, the cost of our materials determines our prices and our greatest material is time.

Mark says, “If it’s a simple task that can be done by anyone in the agency, you’re going to pay less. If you have a complex task that requires an employee with specialized skills, the cost is going to go up.”

A million-dollar company is going to require more time on the phone and more strategy sessions than a hundred-thousand-dollar business. “You’re not paying more because you can. You’re paying more because it takes more manhours to give you the service you need.”

How Do Other Marketing Companies Keep Their Prices Down?

Mark admits that pricing strategies can vary from firm to firm, but you are always going to get what you pay for.

“You might be able to find someone that can do X, Y, Z for $99 a month, but ask yourself, how much time are they really going to be able to dedicate to you?”

There are three common ways other marketing agencies try to offer too-good-to-be-true prices.

The first is that they are outsourcing the work. This means that people halfway around the world, who have never seen or talked to you, are now trying to capture the voice of your brand. And that is the best-case scenario.

The second most common way marketing agencies try to give you impossible prices is by not doing any work on your business. You will get templated content or possibly AI content that has never been read by human eyes! If you’ve ever seen any AI fails online, you know what a scary thought it is that the first person that could be reading your new pages is a potential customer.

The other most popular way other marketing companies will try to cut corners to keep their costs down is by creating content that you do not own.

“You might be getting your site or content for a steal,” Mark says, “but ask what happens if you try to find a new company. You might be disappointed to find out that you didn’t actually purchase your content for that unreliably low price. The content was leased and now you have to start from scratch if you want to go somewhere else.”

As you can see, that’s not how we operate at LeadsNearby.

Don’t Settle For Less

If you are looking for honest marketing with transparent pricing and clear communication, you are looking for LeadsNearby. Give us 15 minutes to show you what we can do for your home service business.

How Can I Get More Local Customers for My Home Service Business? » « Google Local Services Ads: Rollout Through Current Evolution