PR can have a bit of an under-pricing problem, particularly when it comes to freelancers and new, small, boutique agencies looking to establish a client roster and get things going. As it’s a new quarter and taxes are getting squared away, now is a great time to re-evaluate how you’re doing business, from client on-boarding and setting expectations to taking a look at which client activities generate the most profit. And this includes taking a look at your pricing. Even without knowing the back-end of your business personally, I can venture to guess that 90% of the time, it’s time to increase your rates. Here’s why:
Premium pricing attracts premium clients
You’ve probably had the realization that it’s often clients paying the least who have the highest expectation and the greatest need for ongoing assurances, regular check-ins and concerns around immediate results. This is partially due to the fact that often, small retainers are born by companies who are still struggling financially and are looking to PR as the quick fix. Because they feel they have risked their own money and have the expectation that you’re there to drive direct sales through publicity, the entire relationship begins based on fear. On the other hand, you might have had the experience of low-paying clients not prioritizing PR, which often looks like not getting samples out quickly, not being available for media interviews, not showing up to calls on time, etc.
Jen Berson, Founder at Jeneration PR and the Profitable PR Pros Facebook group explains this further. “Agency owners tend to price based on what they think a client can pay, instead of on the actually value of the service they provide. It’s based on the fear of losing the client because the rate is determined to be too high.” Instead of this, Jen recommends confidently charging based on value, explaining that “clients that are paying more have more skin in the game, which leads them to be more invested and present in their relationship with you. The more clients pay, the more they leave you alone and let you do your job.”
The benefit of this is not only fewer headaches, but more time in your day to do what you’ve been hired to do and secure the results that validate your pricing.
Rock-bottom pricing drags down industry credibility
While this one might not seem as critical when looking at your bank statement, one huge issue I have with low pricing (offering social media management for $400 a month, starting full-service PR retainers at $500 a month) is that it leaves clients confused about the true value of PR. At those prices, it’s very tough to be able to dedicate the time a brand requires and keeps you scrambling to land more and more clients. The result is a pretty poor service provided and agency experience overall, which makes brands both resistant to putting their trust in the next PR agency and unsure what to expect from the relationship, leading to the feeling you need to “prove” yourself over and over. Conversely, when you believe fully in the value you provide, in your ability to create PR opportunities, secure partnerships and provide insight into editor-friendly marketing and content decisions, then you can stand firmly in pricing that gives you the room to make those results happen.
Undercharging feels gross; charging comfortable rates is expansive
If you’re undercharging you’re stressed out all the time, and let’s face it, PR is stressful enough. Starting each work day from a place of scarcity and lack makes it tough to do your best work and have access to your best creating thinking, which isn’t doing you or your clients any favors. The other tough challenge with under-charging is that it sends a very clear signal around where you are willing to settle, and as a service-provider this often means settling around value and worth, which should be non-negotiable.
To put this into context, Mindset Coach and creator of the free money magnet course Melanie St. Clair increased her pricing more than 200% her first year in business. She found that “the value of services should always be priced based on the value of the energetic exchange. Pricing your services is a statement to how much energy you and your client are bringing to the table.” For Melanie, “higher ticket programs were an easier sell because (a) premium clients know what they want and understand the value in investing and (b) undercharging gives of desperate money vibes.
The process of increasing rates with new or existing clients isn’t easy. but is a rite of passage for many business owners that ultimately is a huge opportunity for personal growth and the maturation of your role with clients. Raising prices is just one of the many topics we explore through the PR Council Mastermind which opens up again in June – if expert and peer support around business growth sounds like just the thing to support your expansion in the last half of 2019, apply now.