The other day a fellow marketing consultant asked me the one, great unanswerable question in marketing…

No, it’s not, “Why do people think chimpanzees are funny in TV ads?” The unanswerable question that he asked me was, “How do you know what to charge?” Seriously, I replied that after 30 plus years in the business I still know of no good answer.

Really, its two separate questions: the first is “how much are your services worth” and the second – and more important – question is “how much is marketing worth.”

How much are your services worth?

You can look at this (at least) two ways. A) How much money do you need to make in order to live in a certain way and how hard are your willing to work for that income? B) How much can you ask for your services without triggering uncontrollable laughter?

For example, you can ask for a $1,000,000 / hour for your services. You won’t sell a lot of hours and a lot of people will laugh at you, but you only need to sell one every so often to have a pretty good life. Still I don’t recommend it. Most of those folks who might be persuaded to pay such a fee have their resources tied up with Nigerian bankers they met over the Internet.

We peg our hourly rate at $125, which is higher than your average graphic designer, but lower than most other “professional” services. This is also a kind of litmus test for the potential client. If they think our hourly rate is expensive then they probably rank marketing services somewhere between yard work and dog walking.

How much is marketing worth?

A better place to begin the estimation of marketing costs is to propose a scope of work that is directly connected to helping a prospective client achieve some marketing or business goal. For example, a number of businesses we’ve met have stated that they want to “…double profits in the next six months.”

Perhaps this kind of statement is a litmus test for us. No reputable marketer can or would promise this kind of result so perhaps they’re checking to see if we’re honest. If they’re actually looking for someone who will guarantee such a result, we don’t fit the bill so we quickly wrap up the meeting and leave.

This usually sounds like a lot of effort to most potential clients, and it should if it’s done well. When this happens I usually back up and ask them what an increase of 50% (or whatever their stated goal is) means to them in new business, profits, working capital – how much dough will they realize. And, what difference will it make to them, their company, etc. I had an old boss who used to say, “You’ve got to spend a nickel to make a dime.”

If nothing else, a discussion about goals precipitates “how much” money the client is actually willing to spend to grow their sales, market share, territory, etc. – which is almost always a fraction of what it would actually take to achieve the stated goal.

In any case, when someone honestly answers the question about what they have to spend I never mock the amount as being ridiculous. I make it a point to try and propose a project that will produce useful results for whatever they can afford to budget.

Bear in mind that NOBODY knows what any marketing / advertising / Internet / sales tool generally costs. As a result they are almost always surprised at how “expensive” it is to achieve a measurable increase in results.