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The Great (1-Sided) PPC Pricing Debate
Kirk Williams@PPCKirk
State of Search Conference, Dallas 2015
Who am I? Who are you? What is life?
#StateOfSearch @PPCKirk@DFWSEM
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#StateOfSearch @PPCKirk@DFWSEM
#StateOfSearch @PPCKirk@DFWSEM
To the chase!
There is noperfect PPCpricing model.
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To help us think more deeply about our pricing & find the best model for our individual situations.
“ ”—————————
Our Goal Today:
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but first…
*3*CrucialCaveats
#StateOfSearch @PPCKirk@DFWSEM
but first…
*3*CrucialCaveats
#StateOfSearch @PPCKirk@DFWSEM
but first…
*3*CrucialCaveats
#StateOfSearch @PPCKirk@DFWSEM
but first…
*3*CrucialCaveats
#StateOfSearch @PPCKirk@DFWSEM
philosophiam pretium
“What are the underlying principles that should drive our
pricing model choice?”
#StateOfSearch @PPCKirk@DFWSEM
philosophiam pretium
“What are the underlying principles that should drive our
pricing model choice?”
how you measure value matters.
#StateOfSearch @PPCKirk@DFWSEM
philosophiam pretium
“What are the underlying principles that should drive our
pricing model choice?”
your pricing model should fit with your customer relations.
how you measure value matters.
#StateOfSearch @PPCKirk@DFWSEM
Principle #1 - How you measure value matters.
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Principle #1 - How you measure value matters.
Time
=
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Principle #1 - How you measure value matters.
Time Task
=
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Principle #1 - How you measure value matters.
Time
Expertise
Task
Aunt Edith Brad Geddes
=
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Principle #1 - How you measure value matters.
Time
Expertise
Task
Results
$
Aunt Edith Brad Geddes
=
#StateOfSearch @PPCKirk@DFWSEM
&
My Take on Measuring Value: Task & Expertise + Results.
$#StateOfSearch @PPCKirk@DFWSEM
principle #2: your pricing model should fit with your customer relations, unlike Han.
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pricing should be seen as marketing
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Status Quo = a la carte, confusing!
pricing should be seen as marketing
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STRESSED brides
pricing should be seen as marketingStatus Quo =
a la carte, confusing!
#StateOfSearch @PPCKirk@DFWSEM
STRESSED brides
We Said: “Screw
ala carte” & simplified it to
1 flat price.
Oh… and we raised prices
50%.
pricing should be seen as marketingStatus Quo =
a la carte, confusing!
#StateOfSearch @PPCKirk@DFWSEM
STRESSED brides
We Said: “Screw
ala carte” & simplified it to
1 flat price.
Oh… and we raised prices
50%.
Feedback from Stressed Brides?“We. Love. It.”
pricing should be seen as marketingStatus Quo =
a la carte, confusing!
#StateOfSearch @PPCKirk@DFWSEM
ask yourself: “How will my future price changes affect my loyal client’s orientation to me?”
pricing should be seen as customer retention
#StateOfSearch @PPCKirk@DFWSEM
ask yourself: “How will my future price changes affect my loyal client’s orientation to me?”
pricing should be seen as customer retention
#StateOfSearch @PPCKirk@DFWSEM
PPC Pricing Models…
There’s… too many of them!#StateOfSearch @PPCKirk@DFWSEM
Performance??
Combination??
% of Spend??
Flat Fee??
Hourly??
a PPC pricing model analysis.
Pros &
Cons
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hourly
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“hourly makes sense to my corporately trained brain…”
HOURLY Benefit #1: Pricing Simplicity
Client
(but…)
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HOURLY Benefit #2: You *Have* to Get Into the Account.
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HOURLY Benefit #3: Helps Prevent Scope Creep
Initial Agreement2 weeks
3 months6 months
1 year
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“hourly makes sense to my corporately trained brain…”
HOURLY Concern #1: Pricing Disconnect
Client
“…BUT HOW MUCH DO YOU MAKE AN HOUR?!?!”
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≠
HOURLY Concern #2:
When you look annoyed all the time,
people think that you’re busy.
“ ”
Busy Work ≠ Good Work
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HOURLY Concern #3: Discourages Speed & Skill Growth#StateOfSearch @PPCKirk@DFWSEM
HOURLY Concern #3: Discourages Speed & Skill Growth#StateOfSearch @PPCKirk@DFWSEM
HOURLY Concern #4: Screw You, Tools
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Easy to sell, but selling your soul to the clock isn’t worth it“ ”—————————
HOURLY SUMMARY
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performance
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I make $,you make $
Performance Benefit #1: Rewarding to both parties.
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No futurehagglingrequired
Performance Benefit #2: Scaleable
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Performance Benefit #3: Sounds Great!
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performance pricing is like Dudley Dursley
(it’s everyone’s favorite, but is, in reality, quite boorish)
but....
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Performance Concern #1: Complicated Negotiating
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Performance Concern #2: What if Client Breaks Something?
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Performance Concern #3: Seasonal Trends
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Can you really trust them??
Cancelled Orders
Phone Orders
Tracking Errors
Include Brand??
Performance Concern #4: Data Accuracy
X
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The Performance Model Attribution Pie-Chart
PPC Everything Else
NO
TO
UC
HY
!!!!
!
Performance Concern #5:
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Looks like puppies and unicorns from afar, Turns out to be werewolves & donkeys.“ ”
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PERFORMANCE SUMMARY
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flat rate
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FLAT RATE Benefit #1: Simple to Sell
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FLAT RATE Benefit #2: Pricing WYSIWYG
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FLAT RATE Concern #1: Not Growth-Focused
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FLAT RATE Concern #1: Not Growth-Focused
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FLAT RATE Concern #2: Can Invite Scope Creep
Initial Agreement2 weeks
3 months6 months
1 year
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Simple selling with no eye for the future.“ ”—————————
FLAT RATE SUMMARY
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% of spend
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Fee
$1000 $3000 $10,000 $50,000
% of SPEND Benefit #1: Simple to Sell
Fee
Fee
Fee
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No futurehagglingrequired
Fee
$1000 $3000 $10,000 $50,000
% of SPEND Benefit #2: Scaleable
Fee
Fee
Fee
#StateOfSearch @PPCKirk@DFWSEM
¯\_(ツ)_/¯ Fee
$1000 $3000 $10,000 $50,000
% of SPEND Benefit #3: Simple to Track
Fee
Fee
Fee
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% of SPEND Concern #1: Misaligned Goals
ClientAgency $#StateOfSearch @PPCKirk@DFWSEM
“Are we seriously going to have to go through this again?”
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Client Agency
Can we please kill the misaligned goals attack??
$Reality: Client doesn’t increase spend
unless client is J with results!
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% of SPEND Concern #2: Client Issues
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`
$1,500 Spend
% of SPEND Concern #3: Small Account Issues
$1,000 Spend
$500 Spend
SAM
E WO
RK
LOA
D
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Scales well, but small business is the pits.“ ”—————————
% OF SPEND SUMMARY
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My Model (combination)
+
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Ad Spend Budget Management Fee
Tier 1 $0 – $2,500 $400
Tier 2 $2,501 – $5,000 $800
Tier 3 $5,001 - $10,000 $1,200
Tier 4 $10,001 - Up 12% of Ad Spend
% of Spend with a Flat Rate Twist
*not my actual SMB pricing rates, but close enough to be helpful
#StateOfSearch @PPCKirk@DFWSEM
Prevents Small
Account Drain
Not Difficultto Sell Scaleable
Spend Reduction
Means Work Reduction
Client Goals Aligned with
My Goals
% of Spend with a Flat Rate Twist
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TIP: Always, always, always charge a Setup Fee
Each build isyour Mona Lisa
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keep searching for the best model
for you.
#StateOfSearch @PPCKirk@DFWSEM
State of Search Conference, Dallas 2015
Questions? Ideas? Insults?——————————————————————————————————————
@PPCKirk
Slides & Links: bit.ly/ppc-pricing