Marketers, we control what the world sees. Every week you will receive an email with the greatest marketing knowledge online. Entire marketing strategy breakdowns, marketing news, unique resources, & video strategies.

All previous issues are posted inside our Marketers Utopia.​

Marketing Breakdown

Fixed vs. Performance-Based pricing for your agency, the pros and cons.
​

I used up all my wit on Reddit today, so I am just going to jump into it.
​

How do you know you have the right pricing model for your agency? This issue is similar to that of a sales person's flat Rate per X or commission from sales, isn't it?
​

Let's assess (remember, it's 2 'ss')

​
Fixed-Rate

​
I mean, I won't explain it, but I will say that the fixed fee model is what most agencies choose to go with for a few different reasons. Generally, how some agencies price their service is based on what competitors are charging and/or their operational costs, which I will dive into deeper.
​

Here's an example of a macro view of fixed Rate
​

SEO- $300

Published Content - $250

Ads Management - $1000

​

Many (young) agencies follow this method as it tends to be the easiest method of calculation, minimizes tracking and provides expected earning. But let's outline some of the pros and cons of this method.
​

Pros

• Suitable for small, young agencies
• Easy to justify to a prospective client
• Good for prospects with a set budget
• Costs are easily budgeted for
• Everyone understands the model as it's the traditional way of working
• It doesn't require sophisticated tracking to calculate attribution
• If something goes wrong or the job takes more time, the price doesn't go up

​
Cons
​

• Estimates can become inaccurate quickly, leading to massive scope creep
• Disincentives an agency to find new growth opportunities for a client
• Not a good method to grow larger engagements and scale your agency
• Agency and client objectives are not aligned
• The agency isn't directly incentivized to make your campaign the best it can be
• The agency doesn't benefit from suggesting new ideas or experimenting
• If the campaign fails, the agency still gets paid the same (but they may lose the account!)
  ​

Performance-Based Model
​

When your agency is compensated based on the output of your work. For example, if you're working with a local pest control company running PPC ads. Every time you drive a phone call, you get paid, or if you sell a product on an eCom store, you get a % of the sale.
​

A performance payment model is when your agency is paid based on the campaign's effectiveness rather than on the amount of work the agency does or the size of your media budget. It's seen as a more progressive way of working that has benefits for both the agency and the client. It can be as simple as agreeing to pay the agency a % fee for sale from TikTok, for instance.

​

Think affiliate marketing but without being the influencer part.

​

Examples

• $25 for each phone call driven
• $5 for every verified lead capture
• $5 for every store location
• 5% of each sale made on an eCom store
• 10% of each sale made from abandoned cart email

​

You get the idea- almost anything can be broken down, it just depends on what the client values the most.

Pros:
​

• Agency and client objectives are aligned
• The agency is rewarded for suggesting new, more effective ideas and experimenting
• The sky's the limit – because the agency is free to increase spend and generate sales without budget limitations
• Clients are always happy to pay per result, so higher client retention
• It can be highly profitable if you can dial in the arbitrage right

​
​

Cons

• There's a lot of work that goes into driving results (months)
• Results are never guaranteed (you only eat what you catch)
• The client has all the advantages here
• Grey areas exist for service-based clients (e.g. send a client to a dental office, the client didn't book an appointment it could be because of lead quality or customer service)
• The client has to give the agency greater access to their business and their data.
• Some clients feel it's a risk to give up so much control.
• Agencies are effectively incentivized to break a client's rules to generate sales (e.g. ignoring brand guidelines, using intrusive ad placements or untrusted ad platforms)
• Very volatile
• Hard to keep track of incoming sales and manage cash flow, especially at the early stages
  ​
  ​

So, which is better? It depends on your marketing power. ​
​

Particularly for younger or newer agencies, consistency will be important, especially if you have other team members who rely on you for payment. Having a fixed fee allows you to build up your reputation, the number of clients and proof of results— a fixed fee is the way to go. So if you're just starting out, don't have many reviews or followers, even if you know what you're doing, stick to fixed until you build up the social proof and influence as an agency. Once others can 'vouch' for you through social proof, you will have more flexibility to

​

Focus on your strength to make the most amount of money. ​
​

On the other hand, if you already have a reputation, particularly on social profiles such as followers on Instagram, TikTok and/or a portfolio and know you can drive results (with proof), then you could be leaving serious money on the table if you didn't charge by performance. You should charge more for what you are particularly good at. For instance, if you have gained phenomenal results from TikTok ads, find clients who value TikTok ads the most for their business. Aligning your strengths with what clients value is the best way to maximize your profits.
​

Essentially, advertise what you (your agency) specialize in, but plan ahead for financial (and unexpected) turbulence to keep your agency afloat should mistakes happen or the account gets banned.

Marketing News ​
​​
So apparently, if you’re not using carousels on Instagram, you should reevaluate your life choices.

When you think of carousels in 2022, the only thing that should come to mind is Instagram, not that scene from Euphoria.

But seriously, research from 102 million posts from 2021 was done, and the most valuable finding was how big of a role carousels posts played when it came to engagement (surprised?).

​
​Here are the top findings from the study by Social Insider:​
​

1. Carousels lead to a higher average engagement rate

​
Profiles under 5K have the potential of reaching an average engagement rate of 4.90% when choosing to post more carousels.

In the case of medium-sized accounts (between 10K-100K followers), the best option for higher engagement rates is video, with values up to 2.90%

​
Large accounts (with more than 100K followers) will benefit more from using carousels.
​
​

2. Using more carousels can help you increase your engagement per impression rate and make you gain more likes.​
​

The carousel post wins when it comes to engagement per impression across all profile sizes, revealing one of Insta’s strategies.
​

3. Carousels lead to more comments on Instagram
​​
If you’re looking for more comments from your posts, here is what to follow depending on the number of followers you have.
​

• For an account under 10K followers choose to post a carousel (read the *** note at the bottom)
• In the case of medium-sized accounts (10K-50K), a mix between carousels and videos is the magic combo
• When it comes to accounts between 50K-100K, it would be preferable to start pushing videos more

​
​4. Carousels are more likely to be saved by Instagram users​
​

Depending on your business objectives, it may be better to choose one type of post format to make your followers do what you want.

​

5. Carousels increase the chances of a higher reach rate​
​

Carousels generate twice higher reach rates than videos, at least in the case of small profiles (under 5K).
​

The highest reach rates for carousels are 1.27% for small accounts and middle-sized accounts (1.20%), those between 50K-100K followers.
​
So, should you ditch the videos?
​
***Considering TikTok has overtaken Google as the most visited website in 2021, we highly doubt Instagram plans on rivaling TikTok videos with more (carousel) images. Reels was launched for a reason and like any robot, Zuckerburg is programmed not to lose. So even if you have less than 10K followers don’t rely on caro images only.
​
The only true answer is data, so keep a close on your reach, engagement and ultimately, your goals when it comes to videos and caro’s.

FREELANCING VS RUNNING AN AGENCY

​

Sponsored by Utopia

For every problem holding back your business growth, there’s a marketer that already fixed it

​

And within a 3-minute talk with that marketer, you could get rid of every bottleneck stopping your business from making the money you wish.

This is why Utopia was created, a community of 2200+ advanced marketers, some of them rolling 9 figures per year. And you can join it for the price of a large pizza.

E-commerce, agency, paid media, conversion rate, SEO, email marketing. There’s a question you have about those?

​Turn to Utopia, and get an expert to answer it. Seriously.

Don’t be the marketer that tries to start a fire with 2 sticks. That’s what you’re doing if you rely on Google search results polluted with shallow knowledge.

If you’re just starting out, you can get a roadmap from a person that years ago was exactly where you are now.

And there’s way more in Utopia:

• 3333+ battlefield tested strategies. You can copy/paste them right away to start getting sales.
• 33+ courses on mastering any marketing skill. If you wanted to buy these courses singularly, you’d have to shell out thousands of dollars.
• Bi-weekly live calls with 7,8,9 figure brand owners.

​
​Join today for less than a large box of pizza.​

​

Much love,

​

Wiz
​