Social Media Agency Trends, Pricing, And More
Social media agency trends change frequently, but they’re important to analyze and adapt to. As a social media agency, how do you meet the modern challenges of packaging and pitching your services? How do you finding the right fit with clients and meet their needs – all at a fair price?
We wanted to dig deeper into what’s really happening out there among social media agencies today. So we went straight to the source. A total of 220 Sprout Social agency customer respondents were asked to tell how they’re defining themselves and their services, what they see as their biggest hurdles, how they structure their fees, and more.
We’ve analyzed the findings. Here’s the state of the social media agency trends in today’s marketing world.
How Social Agencies Identify Themselves To Their Customers
A lot of small to mid-sized agencies struggle to differentiate themselves and their services. This is especially true in a market that’s grown increasingly crowded. Finding the right way to describe services to potential clients is critical.
Almost a fifth of responders, 19 percent, defined themselves as “full service” agencies. They basically intended to mean they handled all aspects of digital marketing for their clients. This can include content creation, website development, social media management, branding and more.
A total of 11 percent of respondents described themselves as “niche or industry focused.” Embracing a niche strategy can be particularly effective at helping an agency stand out from the crowd. This is especially true if the agency wants to become “the” expert in a certain field.
Another 11 percent of respondents considered themselves solely “digital marketing” agencies. These agencies focus on social media management, social analytics and similar services. That’s fine for clients who have their own clear vision of how they want to build their brand but need a partner to help with the mechanics of social in order to do it.
Using agency “buzzwords” isn’t a bad thing when it comes to setting client expectations. In fact, it may be necessary in order for agencies to find the right clients.
Client Types Agencies Come Across
Those three main agency descriptions actually correspond nicely to the three basic client segments agencies tend to find:
- Clients who want an agency that will take the reins and handle everything
- Informed clients who understand their industry well, but seek a specialist to manage their social exposure
- Industry expert clients who are self-directed and resident experts regarding marketing, but need the sophisticated aid of an agency to provide better insights and management
Knowing this information is often key to packaging the right services for clients. This is also essential to finding the right price point at which to offer those services.
Social Services Agencies Offer To Their Clients
There’s no right or wrong mix of services that you can offer your clients. However, clients increasingly expect social media management (and to a lesser degree, paid social and content development) to be part of what they can get when they hire an agency.
Social media management is also an important part of the pitch to many clients. No matter what else they may offer, 43% of respondents say that their proposals to clients were wrapped around social. The majority of those who didn’t focus on social media services first used it as an add-on to their other services. Here’s how different agencies are throwing their pitches to prospective clients:
How Agencies Price Their Services
Not all agencies price their services alike. Some operate on billable hours, while others operate on a monthly retainer system. Some charge a percentage of what their clients spend on advertising. By looking closely at the responses we received, we were able to suss out some common trends:
- $3000 per month is average for social media platform management
- $150 is the average hourly rate
- 15-20% of the digital ad spend is typical
However, the type of client that an agency has can deeply affect its pricing model. Companies that want to hand over the social reins to an agency typically have tighter budgets — and less understanding of the value of social marketing as a whole.
Companies seeking specialists expect to see a significant return on their investment — but they’re willing to pay more for it.
The “resident experts” are somewhere in the middle. They tend to understand the value of the services they get, are willing to pay more for those services, but also expect to see a tangible return on their investment.
Common Problems Agencies Face With Clients
All agencies encounter certain pain points when they’re proposing services to their clients. Looking closely at what our responders had to say, it was easy to identify the three biggest problems:
- Managing client expectations (23%)
- Educating clients on the value the agency can offer (21%)
- Educating clients on the value of social in general (20%)
What’s painfully obvious about these statistics is that — despite all of the information out there about the importance of social to a brand’s survival in the digital age — companies still aren’t grasping the message.
Agencies need to define for themselves what type of clients they’re ideally going to partner with on a regular basis. Understanding an agency’s client profile makes it easier to offer the right mix of services at the right price.
Even then, however, agencies can expect to hit a blockade with a lot of prospective (and existing) clients who just don’t understand what they’re being asked to pay for, especially when the results of an agency’s efforts aren’t immediately visible!
So, what can an agency do about it? Educate and inform! Selling the value of social on the front-end when approaching most clients is probably the best route to take. Once that hurdle’s leaped, an agency can educate its clients on what they can expect in terms of action and return on their investment, and why that agency is the right one to hire.