The Great PPC Pricing Debate - State of Search 2015

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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To the chase!

There is noperfect PPCpricing model.


To help us think more deeply about our pricing & find the best model for our individual situations.

“ ”—————————

Our Goal Today:


but first…

*3*CrucialCaveats


but first…

*3*CrucialCaveats


but first…

*3*CrucialCaveats


but first…

*3*CrucialCaveats


philosophiam pretium

“What are the underlying principles that should drive our

pricing model choice?”





how you measure value matters.





your pricing model should fit with your customer relations.

how you measure value matters.


Principle #1 - How you measure value matters.



Time

=



Time Task

=



Time

Expertise

Task

Aunt Edith Brad Geddes

=



Time

Expertise

Task

Results

$

Aunt Edith Brad Geddes

=


&

My Take on Measuring Value: Task & Expertise + Results.

$#StateOfSearch @PPCKirk@DFWSEM

principle #2: your pricing model should fit with your customer relations, unlike Han.


pricing should be seen as marketing


Status Quo = a la carte, confusing!

pricing should be seen as marketing


STRESSED brides

pricing should be seen as marketingStatus Quo =

a la carte, confusing!


STRESSED brides

We Said: “Screw

ala carte” & simplified it to

1 flat price.

Oh… and we raised prices

50%.




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.”




ask yourself: “How will my future price changes affect my loyal client’s orientation to me?”

pricing should be seen as customer retention


ask yourself: “How will my future price changes affect my loyal client’s orientation to me?”

pricing should be seen as customer retention


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


hourly


“hourly makes sense to my corporately trained brain…”

HOURLY Benefit #1: Pricing Simplicity

Client

(but…)


HOURLY Benefit #2: You *Have* to Get Into the Account.


HOURLY Benefit #3: Helps Prevent Scope Creep

Initial Agreement2 weeks

3 months6 months

1 year


“hourly makes sense to my corporately trained brain…”

HOURLY Concern #1: Pricing Disconnect

Client

“…BUT HOW MUCH DO YOU MAKE AN HOUR?!?!”


≠

HOURLY Concern #2:

When you look annoyed all the time,

people think that you’re busy.

“ ”

Busy Work ≠ Good Work


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


Easy to sell, but selling your soul to the clock isn’t worth it“ ”—————————

HOURLY SUMMARY


performance


I make $,you make $

Performance Benefit #1: Rewarding to both parties.


No futurehagglingrequired

Performance Benefit #2: Scaleable


—————————

Performance Benefit #3: Sounds Great!


—————————

performance pricing is like Dudley Dursley

(it’s everyone’s favorite, but is, in reality, quite boorish)

but....


—————————

Performance Concern #1: Complicated Negotiating


—————————

Performance Concern #2: What if Client Breaks Something?


—————————

Performance Concern #3: Seasonal Trends


Can you really trust them??

Cancelled Orders

Phone Orders

Tracking Errors

Include Brand??

Performance Concern #4: Data Accuracy

X


The Performance Model Attribution Pie-Chart

PPC Everything Else

NO

TO

UC

HY

!!!!

!

Performance Concern #5:


Looks like puppies and unicorns from afar, Turns out to be werewolves & donkeys.“ ”

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PERFORMANCE SUMMARY


flat rate


FLAT RATE Benefit #1: Simple to Sell


FLAT RATE Benefit #2: Pricing WYSIWYG


FLAT RATE Concern #1: Not Growth-Focused


FLAT RATE Concern #1: Not Growth-Focused


FLAT RATE Concern #2: Can Invite Scope Creep

Initial Agreement2 weeks

3 months6 months

1 year


Simple selling with no eye for the future.“ ”—————————

FLAT RATE SUMMARY


% of spend



Fee

$1000 $3000 $10,000 $50,000

% of SPEND Benefit #1: Simple to Sell

Fee

Fee

Fee


No futurehagglingrequired

Fee

$1000 $3000 $10,000 $50,000

% of SPEND Benefit #2: Scaleable

Fee

Fee

Fee


¯\_(ツ)_/¯ Fee

$1000 $3000 $10,000 $50,000

% of SPEND Benefit #3: Simple to Track

Fee

Fee

Fee


% of SPEND Concern #1: Misaligned Goals

ClientAgency $#StateOfSearch @PPCKirk@DFWSEM

“Are we seriously going to have to go through this again?”


Client Agency

Can we please kill the misaligned goals attack??

$Reality: Client doesn’t increase spend

unless client is J with results!


% of SPEND Concern #2: Client Issues


`

$1,500 Spend

% of SPEND Concern #3: Small Account Issues

$1,000 Spend

$500 Spend

SAM

E WO

RK

LOA

D


Scales well, but small business is the pits.“ ”—————————

% OF SPEND SUMMARY


My Model (combination)

+


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


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


TIP: Always, always, always charge a Setup Fee

Each build isyour Mona Lisa


keep searching for the best model

for you.


State of Search Conference, Dallas 2015

Questions? Ideas? Insults?——————————————————————————————————————

@PPCKirk

Slides & Links: bit.ly/ppc-pricing

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The Great PPC Pricing Debate - State of Search 2015