Tuesday, May 23, 2006

Pricing Your Copy

It's a situation you'll find yourself in time and again...you've got a client who describes the job, and then asks for pricing. But you don't know where to begin!

Well, the smartest advice I've ever heard comes from Bob Bly. He says simply ASK for the client's budget. It would go something like this:

"Well, do you have a copy budget for the project?" And sometimes they'll say yes.

"What is it, if you don't mind sharing," you say. And they say, "we figured about $3,000." And you can say, "That was about what I was thinking." Or if appropriate, "Wow...we're way off. Let me do some thinking."

This is the ideal situation...that they'll willingly share, but it'll happen only a fraction of the time.

What do you do when your client says, "We don't have a budget" or "Yes, we have a budget (but you'll never know what it is)."

Here's how to figure out what your client can afford to spend for your copy...

#1. Find out how many pieces are going to be printed or (e)mailed.

#2. Determine whether your work is for gaining a lead, a sale, or something else, and what percent is likely to convert (ask the client for this information).

#3. Find out the price of the service or product, then calculate what the potential campaign revenue is to the client.

#4. Come to a potential figure for your client's profit possibility, and then see if your pricing appears acceptable within that framework.

Here's a quick exercise to see what your initial pricing might be for a lead-generating direct mail package.

Imagine you're being asked to write copy for a 6" x 9" envelope (including concepting), a 2-page sales letter, an 11" x 14" brochure, and a 3" x 11" reply device.

What would you charge? Go ahead, just give it a ballpark and write it down somewhere.

Ok, now let's go through a logical process of estimating your fee using a hypothetical software company (my favorite niche market):

The client's product is a practice management software for veterinarians. The product sells for $10,000 per installation. The client has a rented cold prospect list of 5,000 veterinarians and is hoping you can generate 2 percent in leads, which would be 100 inquiries.

Let's say of the 100 leads, a third are "cold" and won't close for awhile. Another third are "warm," and the rest are "hot." That would mean 33 hot leads, with a projected immediate conversion ratio of 10% (based on the client's past conversion ratio history). So figure 3.3 percent times $10,000 and projected IMMEDIATE revenue is $33,300.

This doesn't count revenue from cold and warm lead that move up to hot over time. So considering this, what do you consider a fair price for your work? Is it anything like the price you threw on the table earlier?

There's no rule of thumb for what to charge, but considering your client's other costs...list rental, postage, printing, design, etc...I'd certainly start at $3,000 for my services, and probably try for more, perhaps $4,000 or $4,500.

What if your client is a big mailer like Intuit...selling a $1,000 product in a one-step to a list of 50,000, with a projected profit of $230,000? Now your job is harder (selling versus getting leads), and they stand to profit more...MUCH more...by your work. A job like this would go for about $10,000, depending on your track record and experience.

Bottom line, the more you know about the math behind your client's campaign, the better, and more fairly, you can price.

They call this a "Resource Box":
Chris Marlow shows freelancers how to land the high-quality, high-paying clients in corporations, organizations, and institutions. Check out her coaching program at The Copywriters Coach.
BTW, you can publish this article for free! As my subscriber, you can reprint this article as long as it's reprinted in its entirety...and the resource box stays intact of course :)

ALSO, if you liked this month's article and know others who could benefit from the marketing ideas found here, please do THEM a favor and ME too and send them a copy of this newsletter! They can sign up at: Freelancers Business Bulletin

(And now you know where we find this stuff! Linda)

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