kirk williams: ppc pricing debate
TRANSCRIPT
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?
@PPCKirk
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@PPCKirk
To the chase!There is noperfect PPCpricing model.
@PPCKirk
To help us think more deeply about our pricing & find the best model for our
individual situations. “ ”—————————
Our Goal Today:
@PPCKirk
but first…
*3*CrucialCaveats
@PPCKirk
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.
@PPCKirk
Principle #1 - How you measure value matters.
Time
Expertise
Task
Results$
Aunt Edith Brad Geddes
=
@PPCKirk
&
My Take on Measuring Value: Task + Expertise + Results.
$@PPCKirk
principle #2: your pricing model should fit with your customer relations.
@PPCKirk
Status Quo = a la carte
STRESSED brides
We Said: “Screw
ala carte”
We raised prices 50%.
Feedback from Stressed Brides?“We. Love. It.”
pricing should be seen as marketing
@PPCKirk
ask yourself: “How will my future price changes affect my loyal client’s orientation to me?”
pricing should be seen as customer retention
don’t be her@PPCKirk
PPC Pricing Models…
There’s… too many of them!@PPCKirk
Performance??
Combination??
% of Spend??
Flat Fee??
Hourly??
a PPC pricing model analysis.
Pros & Con
s
@PPCKirk
hourly
@PPCKirk
“hourly makes sense to my corporately trained brain…”
HOURLY Benefit #1: Pricing Simplicity
Client
(but…)
@PPCKirk
HOURLY Benefit #2: You *Have* to Get Into the Account.
@PPCKirk
HOURLY Benefit #3: Helps Prevent Scope Creep
Initial Agreement
2 weeks3 months
6 months
1 year
Amount of Account Work
@PPCKirk
“hourly makes sense to my corporately trained brain…”
HOURLY Concern #1: Pricing Disconnect
Client
“…BUT HOW MUCH DO YOU MAKE AN HOUR?!?!”
@PPCKirk
≠
HOURLY Concern #2:
When you look annoyed all the
time, people think that you’re busy.
“ ”
Busy Work ≠ Good Work
@PPCKirk
HOURLY Concern #3: Discourages Speed & Skill Growth@PPCKirk
HOURLY Concern #4: Screw You, Tools
@PPCKirk
Easy to sell, but selling your soul to the clock isn’t worth it“ ”—————————
HOURLY SUMMARY
@PPCKirk
performance
@PPCKirk
I make $,you make $
Performance Benefit #1: Rewarding
@PPCKirk
No futurehagglingrequired
Performance Benefit #2: Scaleable
@PPCKirk
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performance pricing is like Dudley Dursley
(it’s everyone’s favorite, but is, in reality, quite boorish)
Performance Benefit #3: Sounds Great!
@PPCKirk
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Performance Concern #1: Complicated Negotiating
@PPCKirk
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Performance Concern #2: What if Client Breaks Something?
@PPCKirk
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Performance Concern #2: What if Client Breaks Something?
@PPCKirk
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Performance Concern #3: Seasonal Trends
@PPCKirk
Can you really trust them??
Cancelled Orders
Phone Orders
Tracking Errors
Include Brand??
Performance Concern #4: Data Accuracy
X
@PPCKirk
38%
30%
12%11%
9% Adwords
Organic
Bing Ads
Referrals
Performance Concern #5: Last Click Attribution. BOOOOO
1 Order
@PPCKirk
The Performance Model Attribution Pie-Chart
PPC Everything Else
NO T
OUCH
Y!!!!
!@PPCKirk
Looks like puppies and unicorns from afar, Turns out to be werewolves & donkeys.
“ ”—————————
PERFORMANCE SUMMARY
@PPCKirk
flat rate
@PPCKirk
FLAT RATE Benefit #1: Simple to Sell
@PPCKirk
FLAT RATE Benefit #2: Pricing WYSIWYG
@PPCKirk
FLAT RATE Concern #1: Not Growth-Focused
@PPCKirk
FLAT RATE Concern #2: Can Invite Scope Creep
Initial Agreement
2 weeks3 months
6 months
1 year
Amount of Account Work
@PPCKirk
Simple selling with no eye for the future.“ ”—————————
FLAT RATE SUMMARY
@PPCKirk
% of spend
@PPCKirk
@PPCKirk
Fee
$1000 $3000 $10,000 $50,000
% of SPEND Benefit #1: Simple to Sell
Fee
Fee
Fee
@PPCKirk
No futurehagglingrequired
Fee
$1000 $3000 $10,000 $50,000
% of SPEND Benefit #2: Scaleable
Fee
Fee
Fee
@PPCKirk
¯\_( ツ )_/¯ Fee
$1000 $3000 $10,000 $50,000
% of SPEND Benefit #3: Simple to Track
Fee
Fee
Fee
@PPCKirk
% of SPEND Concern #1: Misaligned Goals
ClientAgency $@PPCKirk
“Are we seriously going to have to go through this again?”
@PPCKirk
Client Agency
Can we please kill the misaligned goals attack??
$Reality
@PPCKirk
% of SPEND Concern #2: Client Issues
@PPCKirk
`
Larger SMB Client
% of SPEND Concern #3: Small Account Issues
Medium SMB Client
Small SMB Client
@PPCKirk
Scales well, but small business is the pits.“ ”—————————
% OF SPEND SUMMARY
@PPCKirk
My Model (combination)
+
@PPCKirk
Ad Spend Budget Management Fee
Tier 1 $0 – $2,500 $400Tier 2 $2,501 – $5,000 $800Tier 3 $5,001 - $10,000 $1,200Tier 4 $10,001 - Up 12% of Ad Spend
% of Spend with a Flat Rate Twist
@PPCKirk
Prevents Small
Account Drain
Not Difficultto Sell
ScaleableSpend
Reduction Means Work
Reduction
Client Goals
Aligned with My Goals
% of Spend with a Flat Rate Twist
@PPCKirk
TIP: Always, always, always charge a Setup Fee
Each build is
your Mona Lisa
@PPCKirk
keep searching for
the best model
for you.
@PPCKirk
State of Search Conference, Dallas 2015
Questions? Ideas? Insults?——————————————————————————————————————
@PPCKirk
Slides & Links: bit.ly/ppc-pricing