Strong creative communications and advertising ideas are immensely valuable marketing tools. But what are they worth? How do you know that you are paying a fair price for something as ephemeral as an idea?
Let’s go to my kitchen to find out.
My kitchen mixer (or tap or faucet) had died and begun to leak all over the place. So I bought a new mixer and started the job of removing the old one. It soon became clear that the old mixer was held in by a single rusted bolt that didn’t want to budge. The job was a bit beyond me so I called a plumbing company.
He arrived, took a quick look and flipped open the price book. My eyes nearly fell out of their sockets when I saw the figure of $508. This is to install a kitchen mixer that I had already bought, mind you. The guy was an employee and the price was not negotiable.
I politely said, ‘No thanks, I’ll get a friend to help me get it sorted somehow.’
The plumber then offered to do the job for the company hourly rate: the hourly rate being $250. You may not be too surprised to hear that this was still too rich for my blood.
As I thanked him and showed him the door, the plumber then offered to do the job for $100 cash. Now he was talking sense! ‘You bet’, I replied. $100 is about what I had expected before he came.
The new mixer was installed in 10 minutes.
How does this relate to creative pricing?
Here’s how. Each of the prices quoted to me came with a bundle of advantages.
- The original $508 was fixed and known. This is very similar to paying a communications agency a monthly retainer. The costs are high but you know where you stand upfront. This method is good if you haven’t got a clue about what’s involved in the job.
- The hourly rate of $250 was half the fixed price. The risk I took was that the job would drag on. This is the same risk a marketer takes when they pay an agency by the hour. Where does it end? Is there any benefit in the supplier working quickly?
- The final figure of $100 was what I had in mind from the start. In the same way a marketer who states a price as part of their brief seldom gets cost blowouts.
But the really important parallel between my kitchen and your marketing communications is this:
The very same job can cost you up to 500% more!
- It will cost you more if you are unaware of the process. Acquaint yourself with the costs of similar jobs done in the past.
- It will cost you more if you want all the bells and whistles. Agencies with nice furniture, water views, free lunches, lots of staff: who pays for all this stuff? You.
- It will cost you more if you don’t set a realistic budget as part of the brief. Good creative suppliers will work to your stated budget.
So by following the tips above, you’ll get what you want for the cost you want.
Now, I’m going to have a chat to my kids about a future career in plumbing.