Quenzel Marketing Agency’s Transparent Pricing
Clients want to know how their marketing budget is spent, and they need to understand what it takes to execute specific marketing efforts. At Quenzel Marketing Agency, it doesn’t matter if clients are on a monthly retainer or have chosen to be billed on a project basis, all clients receive a detailed action plan identifying the steps to perform the marketing assignment.
For marketing projects, clients receive a simple estimate broken out with detail by category, for clients on a monthly retainer, they receive a monthly marketing agency plan with pricing details for each marketing project.
Time for each task to complete the marketing assignment are provided for complete transparency and pre-approval before the project is started. There are no surprises when the bill arrives.
Marketing Agency Profitability
The advertising agency business is a service industry and operates under conditions of unusual risk and uncertainty. Based on the Association of National Advertisers, Inc. (ANA) and the European Association of Advertising Agencies (EAAA), the consensus is that a 15% – 25% operating profit, as a percentage of gross revenue, is “fair agency profitability”. A 15% – 25% operating profit is in line with comparable businesses in a service industry, such as lawyers, contractors and accountants.
Quenzel Marketing Agency seeks business relationships that will provide a 20% operating profit on gross revenue.
Marketing Agency Compensation
There are no simple solutions to Agency Compensation. However, as with all business relationships, the best solution is the one that best meets both the client’s and the agency’s needs.
While a client usually knows how much money their business is prepared to spend on branding, advertising, website design, or digital marketing; how much their business is prepared to spend on the supporting agency services to deliver the planning, creative, production, implementation and metrics tracking required to execute the various marketing communication services; is often open to a variety of factors.
Whichever system the client and agency chose, for the relationship to flourish the Engagement for Agency Services should include five key components:
- Provide professional marketing communication services to the client.
- Fairly compensate the agency for its time and expertise.
- Be simple to understand, administer and report.
- Provide incentives to both the client and agency.
- Be reviewed periodically.
Marketing Agency Pricing Methods
Based on the principles outlined above, Quenzel Marketing Agency has successfully worked with a variety of clients under a variety of Agency Engagement Compensation arrangements, including:
Agency Commission Compensation: Agency receives a certain percentage of media and production charges.
Guaranteed Minimum Compensation: Puts a ‘floor’ under the agency’s compensation. A predetermined minimum-income amount, including aprofit. Made based on assumptions about the level of service required for a period, usually a year. Payments customarily made monthly. Commissions credited against the monthly payments. The agency keepsany excess of commission over the aggregate payment during the contract year.
Hourly Rates: Hourly charges for time-reporting employees to recover agency costs, plus a profit.
Flat Fee, Fixed Compensation: A predetermined, fixed payment period (usually a year) is based on an anticipated workload, at an assumedlevel of advertising activity (customarily billed in monthly installments with media and production billed at net).
Flat Fee Plus Direct Labor Costs: Combination of ‘fixed fee’ plus ‘hourly charges’. There are several varieties. The fixed, or flat amount, can bethe agency charge for either: (1) overhead, (2) overhead and profit, or (3) just profit. Correspondingly, the hourly charge would cover either: (1) direct cost and profit, (2) direct cost only, or (3) fullcost.
Reduced Commission/Sliding Scale: Client pays the agency an amount less than the standard 15% commission for a level of service less than full-service.
Volume Rebates: Reduced commissions but with full agency service for the client. This works when advertiser billings increase beyond a certain level, without a proportionate increase in agency costs, the advertiser recovers an increasingcommission rebate as the billing increases.
Cost-Plus-Profit: Like the hourly rate methods, except a negotiated profit factor added to the total annual service cost. Usually billed in monthly installments. Fee adjustments during the year, or at year’s end, compensate for any difference between the estimated and actual cost.
New & Small Business Marketing Packages
Have a new business or a small business looking to grow?
Look no further. Quenzel Marketing Agency offers cost-effective marketing packages to help small businesses get started or get growing fast.
Ready to get the phone to ring and get the orders rolling in? Online marketing is a great way to find people searching for your services. As a Google Certified Partner, we will set up eMarketing campaigns for you, so potential customers can find your business. Choose 1 online medium, 2 online mediums or 3 online mediums to drive business fast.
Look your best with a professional website. Choose from a simple 1-page site, 5-page site or 10-page site. Should you need more robust website capabilities or a larger website, please contact us for a personal quote.