How much does it cost? This is one of the first questions we have when we try to hire somebody.
If you are looking for a short answer, the email marketing agency charges between $250 to $700 per email. It will include email marketing strategy, copywriting, design, and implementation. However, if you need a more detailed explanation, you should keep reading.
There are many variables to be able to answer this question, but I will do my best to describe those variables.
Here are the most popular pricing structures that agencies offer:
Before we start, I would like to mention that all these prices I will be describing are according to the US standards. If you live in any other country or are shopping worldwide, the prices might be much lower depending on the country. However, based on my experience, there are not many email marketing agencies in the world in comparison to other industries.
Also, in this post, I will be talking only about the full service email marketing agencies and not freelancers. Freelancer prices might be much cheaper, but you will get one person. In email marketing agencies, you will get a strategist, project manager (aka account manager), technician, copywriter, and designer.
Email Marketing Agency Pricing Myths
When I was doing some additional research for this post on Google, there were top results on the first page of Google with unrealistically low prices. For example, a company stated, “If you’re a mid-sized business working with an agency, rates start at around $300 to $900 a month”. I am not sure what kind of full email marketing service can you provide for $500 per month.
Also, another popular article states, “On average, a mid-size business can expect to spend $9 – $1,000 per month on email marketing if they self-manage their campaigns (depending on the platform and number of subscribers) or $300 – $500 per month if they work with an agency.” According to their statements, it looks like you will pay less when you work with an email marketing agency vs doing it yourself. It does not make sense.
Here is our take on the email marketing agency pricing.
This arrangement is not typical for email marketing agencies. Only the agencies who just started their business might charge per hour for their work or per hour for the consultation.
This hourly model is not common for email marketing agencies. However, the prices might vary from $120 to $250 per hour.
For some reason, this is the most requested option from many clients. Clients like the flexibility to pay for the house. However, there is a reason why email marketing agencies do not charge per hour.
The reason is that it would be extremely expensive for the client and would not make sense.
Another common practice is to charge per project. However, this email marketing cost structure works for setting up automatic emails (aka drip campaigns, sequences, flows).
It will not work for campaigns (aka broadcast, newsletter, and promo campaigns).
The automatic emails allow you to set up once and leave it as long as you are happy with it.
You can’t do the same thing for campaigns since you need to create a new one each time you send it.
So, the cost of setting up automatic emails varies based on what you want to set up.
The most common set of automations are:
Those 3 automations will have between 1-3 emails each. Let’s focus on 3 emails per flow since it is the minimal, optimal setup in my opinion. So, a setup like that will cost around $3000 on the low side and $6000 on the high side.
Here is what we do in our agency, just so you can see the real numbers.
We have a bronze package where we charge $3500 per month. It takes us 2 months to set up the fundamental flows. In other words, you are looking at the cost of $7,000 for the setup. In our agency, we include approximately 7-10 different flows and a total of 30-40 emails.
I do not believe there is even one agency who does revenue share only.
In most cases, it is a combination of the retainer (base fee), which we discuss in the next section and the revenue share.
There are a bunch of ways to do it, and it depends how you negotiate with the email marketing agency you plan to work with.
If you do email marketing already and you’ve had any good results, I would strongly suggest to do a revenue share only on top, not the part that is already working.
This is the most common way to partner up with email marketing agencies for both parties, the client and the agencies.
It takes time to learn your company, your clients, and your products. Also, it takes time to optimize the email marketing for maximum performance. Even for those automations that you can’t “set and forget”, you need to constantly work on them to improve the performance.
The lowest retainer I have heard about so far is $2500, which included 10 emails per month. On the high side, it is $7500 per month for 10-15 emails.
Some agencies also charge you for the setup fee and then a monthly retainer.
This is one of the essential price factors for production accounts. There are multiple pricing models when it comes to PPC services, ranging from hourly rates to flat rates to a monthly retainer model.
Obviously, the more emails that must be produced, sent, tracked, and assessed, the more expensive it will be. Individual email production costs can range from $300 to $10,000 or more, depending on email complexity, dynamic features, number of content sections, number of links, artwork originality, templates, segmentation, testing, and so on.
Finally, combinations of the aforementioned price choices can be utilized to tailor a relationship between the firm and the agency. Digital marketing is a constantly changing field. You might be able to create a price system that offers services tailored to your client’s unique requirements.
A frequent approach is to combine a value-based pricing model, a popular choice among customers, with one of the other approaches to decrease the agency’s risk.
For example, companies frequently combine a project-based approach with a commission-based model. For a fixed fee, they will build numerous internet properties and a TV ad for a customer. Then, for the TV campaign that incorporates the ad and brings visitors to the web domains, Company will earn a 15% commission.
Another method the agency employs a hybrid model is to charge a monthly retainer for advertising management and then charge project-based pricing for websites, commercials, etc.
Based on the models shown above, our ideal pricing model for B2Bs working with an agency is a hybrid approach in which:
- The foundation is a retainer, which allows for the flexibility to alter services to meet the needs of the client, as well as a quarterly plan developed to match objectives and continually monitor the agency’s effectiveness.
- For example, you might include a performance reward based on KPIs in the quarterly plan in the collaboration.
- Minuscule kickbacks are acceptable since you can use them to negotiate reduced agency service prices.
- Allows you to evaluate specific clients and customize your offerings to them.
- Clients can only pay for the services they require.
- Increase the value of your agency by providing more alternatives to clients.
- Your services are cost-effective.
- Implement hourly rates and recurring income structures to accommodate everyone.
- Clients may bargain for numerous services, lowering the profit margin.
Choosing the best price plan for a digital marketing business may be difficult. So, if you’re unsure which one to use or if you currently have a model in place that isn’t lucrative for the agency, there’s no excuse you can’t alter it.
Taking the effort to learn the advantages and disadvantages of various pricing models may help you reach your goals faster and take your agency to the next level.