Stop trying to keep up with the Joneses

Agency owners love to ask what others are charging or what services they are providing. They dig into the competition for insight on their own planning.

Chip and Gini argue that while competitive intelligence can be helpful, it should be one of the last steps in the process, not the first.

Figure out the pricing that works for your cost structure and delivers the profit margin you want. Test it with prospects to see if it works. If it doesn’t, see how you can tweak it. If it works, try increasing the price next time around.

Chip’s grandfather once cautioned him to not try to “keep up with the Joneses” and that’s good advice here. Build the agency you want, not one patterned on what the competition is up to.

Resources

* Spin Sucks Community* Rick Gould

Key takeaways

* Gini Dietrich: “Who cares what anybody else charges? What does it cost you to do the work? Figure that out. And then base it on that. You do not base it on industry standards or what other people are charging.”* Chip Griffin: “Some advice that my grandfather gave me, he said, just remember, don’t try to keep up with the Joneses. And, that’s good advice for agency leaders as well. Don’t worry about keeping up with all the other agencies. You need to figure out what’s going to work for you, getting you the clients that you want at the profit margin that you want and supporting the team that you have. If you do those things, you’ll be in good shape, no matter what all of this data says.”* Gini Dietrich: “You can’t do it based on the competition. You have to do it based on how much it costs you to do business, what your profitability margin is, and then figure it out from there. Because if you don’t, you’re going to end up being unhappy, going bankrupt, going out of business.”* Chip Griffin: “Focus on what you are trying to build. When you do competitive research, you’re simply imitating other people. It would be like if I decided that I’m going to open a burger restaurant and I just went to McDonald’s and I wrote down everything that they did and I just copied it.”

View Transcript

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: Today, Gini, I wanna know how much you charge so I know how much I should charge. Okay.

Gini Dietrich: Okay. Sounds good.

Chip Griffin: Right after this.

So today we’re gonna talk about a favorite topic that many of you have, which is pricing . Everybody wants to know how much should I charge? And sometimes they even want to know what you charge so they can figure out what they should charge.

Gini Dietrich: Yes. So there was actually a question in the Spin Sucks community on this very thing, asking for a great benchmark report for average PR agency retainers and hourly rates for team members, so that they could make sure in a new business pitch that they’re in the ballpark for industry standards.

Chip Griffin: Do you have any thoughts on that, Gini?

Gini Dietrich: I do. Do you?

Chip Griffin: I have many.