Our friends over at RainToday.com, an excellent online resource for service businesses and consulting firms, recently issued a report, Fees and Pricing Research Report: Marketing, Advertising, & PR Industry 2008. Here are some highlights from it:
Discounting: Highly Criticized, Yet Highly Used
59% of consulting firms report that they do indeed discount their fees. The most common level of discount offered is between 6 – 10% of originally published or mentioned rates.
The average discount level: 12.8%.
“Not only are there major financial implications to discounting, the discounting discussion shifts the conversation from being about the value the firm provides to being about price. If price is an objection (and it often is) don’t jump straight to cutting price – cut the deliverables and promised outcomes first and the decrease in price will follow (without forfeiting project profitability)."
Prices on the Rise Despite Threats of a Recession
Two-thirds of marketing, advertising, and PR firms have seen their fees for services increase at least somewhat in the past two years and another 76% expect to increase their fees at least somewhat in the next one to two years.
Comment from report authors, Mike Schultz and John Doerr, “Right now, the United States economy is uncertain at best. Yet, even though the economy has slowed, the data suggests that most firms have either not felt a pinch or are not adversely affected by downturns. It will be interesting to see how the next several quarters of U.S. economic growth (or lack thereof) will actually affect fees for marketing, advertising, and PR services.”
More info here.