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A business team evaluates project costs.

Ignorance is Expensive, and It Could Cost You

June 1, 2023
If you don’t know the cost of something, you cannot know how to value it.

“What’s your budget?” is the first question many marketing agencies and some freelancers will ask - regardless of the size of the project. Which is interesting, because unless you are a marketing professional and buy a lot of vendor services from different companies, how would you know what an appropriate budget is? Your framework is simply what you are able or willing to pay – which may not be the cost of performing the service.

Like all business activities, marketing comes with costs. Creation costs. Placement costs. Printing costs. Website costs. Even the best hands-on, in-house marketer – which is a salaried cost – is going to need some external support on services. And if you do not have a Marketing department, you will need even more hired support for marketing activities.

There are a lot of options for getting support. You can hire an intern – who will not have the experience to get things done efficiently. You can hire a friend of a friend – who may or may not have the correct business experience. You can hire a freelancer and hope for the best on timeline, scope, and quality. You can hire an agency and try not to worry about whether they know anything regarding your industry; it will be fine…, they know “marketing”. You can buy that support by the project. You can hire a consultant to craft a strategy and help you determine which marketing priorities to tackle first. You can use services and tools like Tailor Brand, DesignPickle, Canva, or Fiverr to support your design and web development needs. There are circumstances under which any of these options are a solid business choice.

But, as a purchaser of marketing services, would you know that location of those services factors into costs, and that some services (programming, video editing, designing) are location-neutral? Do you know what the average creation cost is of the ad or brand or video you need? Did you know that if you price marketing services or projects from several agencies, costs can be wildly different?

And sometimes agencies get in their own way. I’ve had agencies ask for my budget for the year and come to me with a plan for spending it, despite lacking experience in my industry, because they are marketing “experts”. Without knowledge of the specific industry - how would an agency or freelancer know what is customary and expected in the market, versus what is novel and eye-catching? You don’t know what you don’t know – and it can hurt you.

True story:I once spec’d a single website with six different website providers. The same site. With the same new layout in a PPT rendition, with the site framing and the same site-porting map of current URLs to the proposed new site. The same SEO specs. The same requests, expectations, and deliverables. Pricing for the new website literally ranged from $13,500 to $254,650. What was the difference? The overhead of the firms – geography, location, staff compensation – how quickly they’d finish the assignment, how many layers of people on the project. Any of them could have built the site and it would have worked for the build. A few of them were better choices for the company’s long-term marketing goals.

What was my pricing expectation for that website’s programming? $35,000–$40,000. (It ended up being $45,000.) How did I know what to budget? Experience. While I am not a web designer, in my business career I’ve built more than 20 websites from the ground up and have been responsible for the upkeep, upgrades, maintenance, and content-management for more than 30 more. I’ve priced out and implemented platform upgrades, SEO refreshes, new content, new images, landing pages. I’ve done the work myself (hours of time, which also has a value); I’ve hired freelancers, small agencies, and large specialist firms to support the needs of different websites.

With that website experience behind me, I have the ability to estimate what the market will charge for an e-commerce or brand website build (which require very different support.) This enables me to plan a budget before I engage with potential website programming vendors.

With that same marketing experience, I can budget for media placement costs, ad creation, video content, and more. I know what my company is willing to pay as well as the value of the work in the marketplace. I am not looking for the cheapest option; I shop for the option that will give us the best long-term value. The specific qualities that make up value often are determined differently by various companies (meaning, what I value may not be what you value.) Do you have someone on your team with the same ability?

The next time you get a quote for a marketing project and it’s too expensive for your budget, or more than your current vendor estimates, consider why you were shopping. Maybe your current vendor is not delivering results and more effort or skill is required, which comes at a higher cost. Maybe you are only focused on what your company is willing to pay and not what the work costs in the marketplace. Maybe you do not have the correct knowledge framework to value the investment.

Alexandria Trusov is the Global Marketing Director at Alpha Resources and a B2B marketing consultant to manufacturers and other B2B companies. Contact her at [email protected] or visit www.truinsightsconsulting.com.

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