“What should I charge for social media management and consulting services?”
This is one of the questions I get asked the most by industry peers and aspiring social media managers. My answer is often a mix of example pricing from various companies and dependency formulas and usually ends with me saying something like, “Charge whatever you feel comfortable with!”
While my answer may seem vague, it’s an honest one. It’s taken me a looooong time to figure out what I feel comfortable charging, and the number continues to change.
Here are some things I have learned, along with a few suggestions for you if you’re struggling with what to charge.
Hourly vs. Packages
As a general rule, consulting services are best priced hourly, while ongoing social media management is typically much easier to sell in the form of a monthly package.
If you are getting started with consulting and want to charge hourly but have no idea where to start, here’s a quick guide.
*Please keep in mind that I’m not an accountant OR mathematician. This is just the formula I used when I first got started freelancing, after researching a few different strategies of others.
**If you’ve got a formula of your own that works, I’d love to hear from you in the comments!
Hourly Pricing Formula for Social Media Consulting
- Start with your monthly take-home pay, or what you want your monthly take-home to be.
- Figure out how many hours you can work each month.
- Divide your monthly take-home pay by the number of hours to get your hourly rate. Example: If you want to make $5000 a month and can work 40 hours a week, your hourly rate would be around $31.
- Now take that number and double it. This accounts for the fact that half of your time will go toward communicating with clients, going to meetings, and general marketing/business development activities. So going with our example, you’re now at $60/hour.
- Next, you need to build in a buffer to account for social media tools (like scheduling platforms), continued education, time off, and times when business is slow. I recommend 20% as a buffer. So now we’re at $72/hour.
- Round your number up to the nearest “0” or “5” to make it easier for clients to digest. Final number: $75/hour.
Now, of course you can charge more than that – especially once you begin to develop case studies full of data that prove you’re absolutely worth your rate! But this gives you a good starting point and makes sure you’re being financially smart.
An example of my package pricing: I created a Digital Strategy Coaching Package, which is basically two hours of consulting and a couple of hours of research and report generation, and I charge a flat rate of just $375, because I figured out that $375 is a friendly number that is more accessible to my audience and still worth my time.
I’ve since upped that package to $497, to account for the additional value I’m able to provide after years of experience in offering this service.
However, I’m not selling four hours of time. I’m selling the fact that whenever my clients walk away from me, they have a clear understanding of what actions they need to take, which tools to implement, and an understanding of at least 3 key ways to improve their bottom line.
I frequently use client testimonials and case studies to show potential digital strategy clients exactly what kind of results I can help them achieve – and that is why the service sells like hot cakes. So much so that I’m considering increasing the price again, and including some additional value-adds, to create an even more rounded offering.
Management packages are a bit trickier. You need to be able to explain exactly what your deliverables are, how they will bring value to the client, and the pricing needs to match the deliverables. I.e. if you’re being paid $2k/month but after a few months the value add to the company is only $500, then they’re out -$1,500. Which means they aren’t likely to keep you around. This is why tracking and monitoring your efforts are SO IMPORTANT.
This is the part where I want to throw a stack of papers in the air, drop the mic, and moonwalk off the stage.
I know, I know – it seems like a waste to track your time on a project if you’re making a set amount of money each month, but the smartest thing you could do when starting a new social media freelance business – or any business, for that matter – is to know exactly where your time is going.
I initially avoided tracking my time, but once I started, I was shocked by what I found. In 2014, on a $500 month retainer for one client, I was clocking 10 hours each week, which is super easy to do with management clients, who use an average of 2 hours each day. That’s 40 hours a month, which came out to $12.50 an hour. In the freelance world, this basically equals out to $6.25 an hour!
I was paying myself less than minimum wage to do highly strategic, focused work!
However, there were benefits I had to consider:
- Although $500/month isn’t a ton of money, it was a guaranteed $6,000 each year
- The clients were fun to work with, offered some really great perks, and referred me to other businesses who became clients
- I was just starting out
- The account was great material for my resume
In the end, after a little over a year, I gave the client all of the resources and information they needed to take their social media in-house. This was actually more beneficial for everyone, as they were able to allocate tasks to salaried employees they were paying anyway, and it freed up 10 hours a week for me to focus on higher paying work.
Here are some things to consider when you’re pricing out ongoing social media services:
- How much time will you spend on the project each month, and what does that break down to hourly? This is tricky because it requires you to project time before you start working. I’d recommend using a similar previous project as a guide.
- What exactly will you be doing within the scope of your retainer? Just Facebook management? Facebook and Twitter? Google+? Blog posts? Be clear with what is expected of you so you can account for your time and value.
- What is the estimated value you’re providing (otherwise known as Return on Investment)? If you are planning on charging $1,000 each month for management services, can you deliver a trackable amount of growth and value to the client to justify that fee?
Package Pricing Formula for Ongoing Social Media Management
A good formula would look something like this.
- Estimate your ROI. Let’s say you can increase online sales, which are directly and easily trackable, by about $3000 in a reasonable time period.
- Divide that number by 2. This is $1500, which is the max that you should be charging this particular client.
- Estimate the time you will spend on the account each month. Divide the total of $1500 by the number of hours you’ll spend on the account.
- Is this final “hourly” number one that you’re happy with? If so – great! There’s your pricing. If not, you should consider passing on this project.
Final thoughts: not every opportunity will be a good fit for you, and that’s okay.
I’ve turned down many a potential client because I knew I wouldn’t be able to deliver the return they were looking for on a budget that would make it worth my time.
As my company, Conversations, has grown over the past 6 years, I feel like we’ve done it all.
We’ve worked with non-profits, government entities, startups, retail businesses, restaurants, athletes, authors, and everyone in between…
Some projects were for basically no money, and some were for a whole lot of money.
I learned that more money does not always mean more satisfaction with the work you’re doing. It’s all about balance. After all – you’re not taking this leap of faith away from a comfy 9-5 desk job just to slave away on your own time. Choose the work that fits the lifestyle that you are creating for yourself.
At the beginning of 2017, I took a good long look at my previous clients roster, and realized that over 80% of our best clients (“best” being defined as: great to work with, pays on time, and overall value of work perceived on both ends) had been solo or small firm attorneys.
So we took our own leap of faith, and rebranded as a digital marketing company – specifically for solo and small firm attorneys with niche practice areas.
I’ll talk more about niching out and how that worked out in my next post….
Bottom Line: Don’t force a relationship that seems unlikely to work from the start; instead, focus on developing a niche in an industry that you can deliver a high return within. You’ll make more money, your client will make more money – and that’s social media biz!