Why do agency prices always seem too high?

A few weeks ago, during a second (or third) sales meeting for a combo emailing audit and email marketing trainingA customer told me: "My management thinks you are very expensive, it looks like an expert award !".

Ah. I've never heard that one before. Because expertise, as aemailing agencyit's still a big part of our lives. reason for being.

Anyway. I wanted to take the time today to talk about the prices charged by the agenciesand in particular by Badsender (I am not really aware of the practices of the others, we built all this very gradually by trial and error).

But if you want a quick summary of this article, here's what you should remember from the conclusion?

What are the prices charged by Badsender agency ?

This time, we will only talk about benefits to the "TJM (average daily rate, see below) and leave out the services we provide on a flat rate basis.

This is another big topic, is a html email integration on a fixed price basis, or do we make visible the (estimated) time we will spend on the project? Frankly, we haven't managed to form a religion on the subject, we practice both. It depends mainly on the culture of the customer, on what he is ready to accept, on his level of confidence towards Badsender.

To come back to Badsender's GMTs, here is a transparent overview our "catalog" prices :

• Design of an emailHTML integration, campaign management... : 770 euros HT per day or 110 euros HT per hour.
• Consulting, audit, project management, design system email documentation... 1050 euros HT per day or 150 euros HT per hour.
• Training : 1260 euros HT per day or 180 euros HT per hour.

You will also have understood that we "pretend" that the days are 7 hours long... which is not quite the reality, we will talk about it a little further.

What is the ADR or Average Daily Rate? The average daily rate (ADR) is a pricing method that allows services to be invoiced by the hour or by the day. The ADR is calculated by taking into account the daily salary of the person performing the service, but also all the related costs (paid vacations, work tools, overheads, etc.). It allows the client company to have a simplified pricing system that is easy to calculate and compare with other service providers.

Prices by profile or by type of agency service?

Traditionally, in agencies, there are different levels of prices charged for different profiles in the agency. Prices by function (a emailing designer will cost less than a emailing consultant) and prices by level of expertise (a junior will cost less than an old hand).

For me, it's a hierarchy I'm not comfortable with at all! Why should an html integrator necessarily be cheaper than a consultant? Why should a writer be cheaper than a designer?

If we go back to the price list mentioned above, it seems to me much more relevant to make a difference in relation to what the mission will bring to the client:

• Building teams It's about transmitting knowledge over the long term. The experts create and regularly enrich a body of knowledge that is passed on to others. This requires a lot of work upstream of training. In the case of Badsender, some trainings (like our deliverability training) have been in constant evolution for almost 10 years. The amount of work and time spent cannot therefore be reduced to the duration of the training.
• Transmit methodologies Whether as a consultant in the context of an audit, or as a project manager during a mission to create a design system emailFor certain types of missions, our objective is to help you think about and transmit these methodologies. It is therefore necessary to value the time spent by the expert who accompanies you, but also the time spent in the construction of these methodologies (and their continuous optimization).
• Deliver a final product If you ask us to create an HTML integration, to design a new year's greeting email, to write a welcome email, ... again, you have to take into account the time of the service, but also the cumulative experience of the people involved... and the tools and methodologies applied during the service.

Therefore, we cannot reduce the price of our services to the time spent to perform them. We greatly prefer consider the value it brings to our customers, and the level of autonomy it will give them.

A designer-integrator specialized in emailing will be able in some cases to train your teams in HTML email integrationIn other cases, we can do design coaching or deliver an HTML file based on a brief.

If we go back to the prices charged by Badsender, we can classify them by level of autonomy acquired after delivery of the service:

• High autonomy ? Team building = 1260 euros HT per day
• Average autonomy ? Transmit methodologies = 1050 euros HT per day
• Low autonomy ? Delivering a final product = 770 euros HT per day

But you must be rich then at Badsender?

Not so much, no! An expertis someone who continues to train on a daily basis. This requires a lot of time.

This is where we need to start talking about the working hours of Badsender employees, their salaries and profitability.

To begin with, the objective of Badsenderis not to pay its shareholders (at the time of writing, out of 12 people working for the agency, 7 are shareholders), it is to pay proper wages on time each month.

Salaries are 87% of Badsender expenses

The average net salary at Badsender (based on December 2022), is 3358 euros before withholding tax (since globally, everyone is senior)

But the most important amount to remember is the average total cost of wages (the super gross, with all employee and employer contributions), which is 5853 euros per month.

The share of time billed is about 30% of the time worked

Of course, this proportion is not the same for everyone! An administrative assistant or a sales manager will produce almost nothing invoiced, while an HTML integrator will spend most of his time on invoiced projects.

Let's imagine an HTML integrator (in real life, nobody has only one hat at Badsender, but this is for the example). He spends about 65% of his time on client projects that will be invoiced. On a month of 140 hours, this gives :

• 55% on production, i.e. 77 hours invoiced, i.e. approximately 8470 euros of income
• 10% on consulting, i.e. 14 hours invoiced, i.e. approximately 2100 euros of income
• 10% of team meetings (nothing billed)
• 5% of technical exchanges with others (still nothing billed)
• 10% of research and development (nothing billed yet)
• 10% from article writingdocumentation and training enrichment (sometimes documentation is billed, but rarely)

Our kind integrator finances a part of the costs generated by the remuneration of the "non-productive" positions of the agency (and I thank him, because I represent probably one of the least productive positions of Badsender 😉 ).

You pay the price for expertise, quality and efficiency!

Writing about a hundred articles a year on our blog, publishing podcasts, writing guides dedicated to emailing, being on the lookout for new market developments, enriching our methodologies, investing in high-performance work tools, organizing internal cross-training, maintaining a high level of multidisciplinarity, industrializing and standardizing our production... all of this time and energy is spent to enable us to continue to progress in our expertise and to continue to learn.

So much time and energy that allows us to deliver the best services possible around the emailing expertise.

With the accumulated experience, tools and methodologies used, we also manage to reduce the time spent on your projects (and therefore also to reduce your bills). Our goal is also to optimize your time. Because when a deliverable does not generate a round trip, we save your time and therefore your money.

Going back to the little animation in the intro, on the famous Cheap / Fast / Good diagram, Guess which positioning we have chosen 😉

And no, we are not rich, nor is that our goal. We generate between 4 and 6% of margin (which is in line with our sector). Margin that has always been reinvested and never distributed to shareholders since the beginning of the Badsender adventure.

So if our prices still seem high... well come and test us. Maybe you will save money 😉