Marketing Consulting Business Model? Big Opportunity! Need some help..

[Ethan S]

Thank you guys so much for all of these amazing threads.. I’m new! But don’t go easy on me.

The reason I’m here is for advice from insightful people just like you..

Situation:
Currently I run a Digital Marketing Agency working with small businesses in my local area. My total income from this is around $4k a month with 5 total clients.. The area I live in has less than 10k people in total and little competition just for context.

Recently I have got a pretty crazy opportunity to work with my local town to help educate local business owners in marketing.. Basically they are going to pay me $13k over the next 4 months to reach out to local businesses to meet with and present solutions for them!

During this time I will be hosting events with speakers, chatting one on one with business owners and helping them sign up for some grants available.. Basically they are paying me $13k to generate a tonne of leads and good will for myself as an expert in Digital Marketing..

They don’t care if I sell my services to the businesses eventually as long as that’s not my only ambition.. Which it is not! First I want to provide a tonne of value so they see me as someone they can trust.

But I would be stupid not to see this as the massive opportunity it is..

However I am also struggling a little bit.. I feel as though I don’t yet have a proven model for my business! Which means a lot of this could blow up in my face if I’m not careful..

But it also means there is $10k’s a month of money on the table here..

Recently I’ve been studying a lot of Jay Abraham’s stuff and I think I might be interested in doing something similar to what he does.. Consultative selling a solution to their problems when it comes to Digital Advertising, Copywriting or Outsourcing Work.

I know it’s probably best to just pick one niche and sell the solution to that niche but it’s just not really in line with this opportunity.. Becoming a trusted advisor to these businesses and getting a piece of the upside might work best!

*Main Question*
How would you guys set up a digital marketing consulting business model.. Keeping in mind that I know about Digital Advertising and Copywriting and could outsource a lot of other solutions as well!

Here Are Some of My Thoughts on Pricing:
First off I want to say that I WILL ONLY sell after I’ve determined what value I can bring to the business.. Because selling a solution to a problem they don’t perceive or have is not a good use of anyone's time. Also I will offer a 100% + Risk Reversal to them.. Trusting a marketing guy is hard sometimes.

Do what I’m already doing and charge a high monthly retainer on whatever they want to get done.
Pro’s
- I work 6 hours a week to make $4k a month
- The clients really don’t bother me because they found a solution to one problem but have bigger ones
- No budget clients
Con’s
- A lot more rejection and may create a worse name for myself as being too high priced
- Most businesses will baulk at the price
- There is no real way to measure in value most of what I’m doing

Consultative selling the solution to something and taking 10% of the value.
Pro’s
- Multitude of different projects.. Most of these guys have no referral systems for example
- Potential to see much bigger solutions and therefore much bigger money
- Could get paid only on guaranteed performance and keep a good rep
Con’s
- Not really an expert in this at this time.. But I could get better quickly
- They may already just see me as the digital guy and have a hard time seeing anything else
- This is the one I’m leaning towards so it might have bias and I don’t see other cons

Setting up like a contractor with base pay rates of like $50-75 an hour and outsourcing the work.
Pro’s
- There are literally hundreds of things I could do for them in this model
- The business owners are used to paying contractors like this in my area
- People trust contractors around here and I could brand around that
Con’s
- $50-$75 per hour is not a large sum of money after taxes, freelancers and overhead
- Scope creep and lower value clients are likely to take up a lot of time

*Bonus Passive Income Maker
Since a lot of these businesses will want to DIY it I will shoot tutorial videos + have links to affiliate pages for all of the top problems.

Thanks so much for reading this long post! I know I'm new to posting so my apologize if this isn't correct etiquette.

 

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[Hassassin]

Ethan, nice to bump into you again.

Sounds like you have a serious opportunity to scale and help others.

I don't have experience with anything agency related as I've always freelanced, but once I've scaled my content marketing, I'm looking to establish a premium content marketing agency (maybe we can talk collaborating at some point?)

My role models for this type of work are : Benji Hyam from growth and convert: Newest Content Marketing Articles - Grow and Convert and Jason Quey, from Growthramp. Both guys founded prominent marketing and conversion agencies, and there ideas and strategies maybe of use to you!
Haych,

 

[ReeZ]

How do you plan on measuring the % fee that you're gonna get out of step 2?

Is it 10% of the profits you've generated, net or gross profit?
How would you define the value that you bring, and how can you measure it in a way that guarantees you getting paid?

I don't take ANY project based completely on performance. You could, however, combine Option 1 & 2.

Set a monthly base fee, and then you're gonna take X% of the gross profits generated over a certain percentage.

If a company's projected growth based on the previous months/years had a 5% growth.
I'd likely take 20% of the gross profits, that is exceeding a 10% growth rate. So they get the complete profits for this year's growth, a bonus 5% growth. Anything after that, I get 20% PLUS my monthly fee.

If you're selling a system and not your services/expertise, they should be able to buy you out for a set sum.

 

[GoodluckChuck]

This is the business model I have operated under for over two years and I love it.

As a consultant you are free to do whatever you want which is important in marketing for local businesses because the needs I run into are all over the board.

I've tried a few times to niche into various services and industries but I always end up doing consulting because I just want to solve problems and learn about business.

I don't think you have to worry about having high prices as long as you focus your energy on helping people. You're getting paid by your government to help so just help. If you're too expensive for someone maybe have some options for them to get an entry level service or better yet a training program to help them market for themselves.

Lately I've relished in the fact that as a consultant I can speak freely even when someone is getting in over their head. It's really nice to be able to be honest with people no matter what even if it means they don't become a paying customer.

Maybe you can do that in any model but I found that as a SEO salesman I was always trying to sell SEO where as a consultant I'm more like a private detective getting to the bottom of issues and exploring solutions in the most objective way possible.


For your opportunity I would make my primary aim to develop relationships and solve problems. Let the feedback you get dictate which direction to run with it.

I wouldn't get too hung up on worrying about details like how much to charge or how to niche. It's too early to know those answers

 

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[Ethan S]

Ethan, nice to bump into you again.

Sounds like you have a serious opportunity to scale and help others.

I don't have experience with anything agency related as I've always freelanced, but once I've scaled my content marketing, I'm looking to establish a premium content marketing agency (maybe we can talk collaborating at some point?)

My role models for this type of work are : Benji Hyam from growth and convert: Newest Content Marketing Articles - Grow and Convert and Jason Quey, from Growthramp. Both guys founded prominent marketing and conversion agencies, and there ideas and strategies maybe of use to you!
Haych,

Thanks Hassan I will check these out! Hopefully have some time to get back to you as well.

 

[Ethan S]

How do you plan on measuring the % fee that you're gonna get out of step 2?

Is it 10% of the profits you've generated, net or gross profit?
How would you define the value that you bring, and how can you measure it in a way that guarantees you getting paid?

I don't take ANY project based completely on performance. You could, however, combine Option 1 & 2.

Set a monthly base fee, and then you're gonna take X% of the gross profits generated over a certain percentage.

If a company's projected growth based on the previous months/years had a 5% growth.
I'd likely take 20% of the gross profits, that is exceeding a 10% growth rate. So they get the complete profits for this year's growth, a bonus 5% growth. Anything after that, I get 20% PLUS my monthly fee.

If you're selling a system and not your services/expertise, they should be able to buy you out for a set sum.

That is definitely one way to do it..

I think the same problem you brought up already would be the biggest hurdle.

Most of these business owners I'll be dealing with are relatively small and probably don't have much in terms of tracking and measuring..

Maybe that would be a good first thing to help them with!


I like your point of not purely on performance.. Kind of like spreading the risk to both parties vs one party assuming all risk. Definitely the direction I want to go.

Thanks for your feedback!

 

[Ethan S]

This is the business model I have operated under for over two years and I love it.

As a consultant you are free to do whatever you want which is important in marketing for local businesses because the needs I run into are all over the board.

I've tried a few times to niche into various services and industries but I always end up doing consulting because I just want to solve problems and learn about business.

I don't think you have to worry about having high prices as long as you focus your energy on helping people. You're getting paid by your government to help so just help. If you're too expensive for someone maybe have some options for them to get an entry level service or better yet a training program to help them market for themselves.

Lately I've relished in the fact that as a consultant I can speak freely even when someone is getting in over their head. It's really nice to be able to be honest with people no matter what even if it means they don't become a paying customer.

Maybe you can do that in any model but I found that as a SEO salesman I was always trying to sell SEO where as a consultant I'm more like a private detective getting to the bottom of issues and exploring solutions in the most objective way possible.


For your opportunity I would make my primary aim to develop relationships and solve problems. Let the feedback you get dictate which direction to run with it.

I wouldn't get too hung up on worrying about details like how much to charge or how to niche. It's too early to know those answers

This is a really great point.. I too have fallen into the advice to try and niche without much success!

So far this is my plan (it sounds a lot like what you are doing).

First meeting we're going to go over "5 Ways to Grow Your Business w/ Digital Media"
*This is based on The 5 Ways by Brad Sugar
During That Meeting:
- Before we meet I'll do a full breakdown of their business online
- I have a spreadsheet where we break down the numbers on their business
- I ask what their goals are in relation to the business
- Then we see where they would like to improve inside the five ways
(Leads, Conversion, Buying Frequency, Price and Margins)
- I have lists filled with digital marketing tactics that will help with each of the five ways I explain the tactics I would advise and why and get buy in
-Each tactic has a training video I sourced from the internet along with quoted prices from other providers as well as case studies I find online of other businesses
- After we're done the meeting and we've decided on the tactics, gone over the price other people charge, showed them all the training videos available I ask if they would like me to do up a custom quote to get all of this done by me and figure out their budget
- Setup another meeting presenting a quote for work falling into their budget

I know this is probably confusing.. If anyone wants a video I can make one if it's useful!

 

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[Jon L]

I have a software development 'agency,' so I don't know much about marketing, but I do know some about the agency side of it.

Be careful about bringing on too many customers that can't pay much. These customer tend to have champagne tastes on a beer budget. They're typically a pain to deal with. Not all of them, but most of them are ungrateful for the work you do. Maybe consider setting up a paid discussion group they can join after this initial period is over. Everyone could help each other out, you could lead it, and still make it worth your while.

 

[Ethan S]

I have a software development 'agency,' so I don't know much about marketing, but I do know some about the agency side of it.

Be careful about bringing on too many customers that can't pay much. These customer tend to have champagne tastes on a beer budget. They're typically a pain to deal with. Not all of them, but most of them are ungrateful for the work you do. Maybe consider setting up a paid discussion group they can join after this initial period is over. Everyone could help each other out, you could lead it, and still make it worth your while.

Wow.. That's a great idea! I will put that idea out there and see if anyone is biting.

Thanks for the advice! You are one of the people I've seen around the forum I wanted to hear from.

Honestly right now I'm leaning towards just taking people on a monthly hourly retainer like a freelancer would.. I know that the marketing agency model isn't going to be fastlane ever. Plus it's not what I want to do forever.

So I could just use this to fill up my bank account for a few years.

Thanks again!

 

[Jon L]

Wow.. That's a great idea! I will put that idea out there and see if anyone is biting.

Thanks for the advice! You are one of the people I've seen around the forum I wanted to hear from.

Honestly right now I'm leaning towards just taking people on a monthly hourly retainer like a freelancer would.. I know that the marketing agency model isn't going to be fastlane ever. Plus it's not what I want to do forever.

So I could just use this to fill up my bank account for a few years.

Thanks again!

sure thing.

Full bank accounts are a good thing to have. And, there's nothing like running your own 'anything,' even if its a freelancing gig. It gives you the headspace to figure out where you want to build next

Freelancing gets you into sales. Your part time job when freelancing is looking for work. Get good at that, and lots of things start opening up.

 

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[Ethan S]

sure thing.

Full bank accounts are a good thing to have. And, there's nothing like running your own 'anything,' even if its a freelancing gig. It gives you the headspace to figure out where you want to build next

Freelancing gets you into sales. Your part time job when freelancing is looking for work. Get good at that, and lots of things start opening up.

Absolutely.. All of the skills I've learned being an entrepreneur will been invaluable for when I find my Fast Lane idea!

Thanks again

 

[Davidla]

- A lot more rejection and may create a worse name for myself as being too high priced
- Most businesses will baulk at the price
- There is no real way to measure in value most of what I’m doing

@Ethan S I'd like to challenge you on this

-If customers think your price is too high, they are rejecting your price and not you.

-If you do it the right way, it will create a better name for yourself (Ethan is such an expert I can't afford him)

-There is no real way to measure the value --> really? Is there a way to estimate the value? (e.g. double relevant traffic leading to a potential double in sales? Or current traffic improving conversions via copy leading to %XX+ higher revenue/leads?

Here's how I would personally approach this:

-Offer a free digital strategy call/meeting. Have them fill up a form to tell you about their business/project beforehand.

-Send them some of the resources you've created prior to the call, so they can learn more about you and what you bring to the table.

-During the call, provide value as a consultant and if they want to work with you have a few options prepared for them

For example, creating a digital strategy for their business and goals (then if you want to offer implementation you can include how much it would cost to implement with you), coaching them/their team on project or retainer basis.
If you are serious about the consulting part, I'd recommend having offerings that have to do with your thinking v.s. implementation.

Implementation can be compared at $5/hr on Upwork. Thinking is priceless (e.g. Gary V being paid tens of thousands per participant in a group for a day with his team).

 

[Kung Fu Steve]

Tell them exactly what to do...

And then ask them if they want to do it themselves, or you can do it for them.

 

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[Dan_Cardone]

I've been a consultant for a good while now. Here are a few tips that may help you:

1. Send them a basic questionnaire beforehand to fill out. You want to learn the basics of the business and you also want a question on there that ask them how many business books/seminars/courses/programs/coaching they have done in the last year. If their answer is "0" then you aren't likely to convert them into a paid client. The ones who answer with big numbers are the ones who will pay you and value what you have to teach. The depth of the questions you ask is also meant to establish you as a credible expert and authority.
2. Never charge on an hourly basis. NEVER.
3. Your questionnaire should allow you to find businesses that you can help create easy wins with first. For example: if one business owner tells you he doesn't know how to track his marketing results and doesn't know his numbers, that should be an easy one for you to improve.
4. Before you actually work with them, send them a box that contains anything that sets you up as an authority such as your book, copies of testimonials from former clients, etc. You also want to include either a DVD or flashdrive with a video on it called a "quick start guide." The purpose of this is to prime the client to A) Follow your lead and B) get them super excited to work with you. The video will tell them how your coaching works, anything they need to know before hand, anything they should read or watch before hand, and talk about results you have gotten with past clients. If this is done correctly then you will be able to extract higher fees from clients.
5. Always have a higher priced service you offer them at the end. Mine goes like this: Consulting Project -> Monthly coaching -> Mastermind Group -> Yearly 1 on 1 coaching. Each lever gets more exclusive and more expensive. Place emphasis on the exclusivity of higher level coaching.
6. Clients are not logical. Read that again because its true. Clients who return to you over and over will do so because of how you make them feel. Yes, you should strive to get them awesome results with their business but since most clients are not logical, you should also strive to make them feel important and good about themselves.
7. Some clients are simply ignorant. What they want you to fix often isn't their biggest problem. Fix it anyways (and as quickly as possible) so they will be happy and you can then move on to the real problem that holds them back. Example: I once had a client who was adamant that his lack of customers was because of his "outdated restaurant design and branding." No, it was because of his crappy location and complete lack of marketing. I outsourced a new logo and restaurant design to a guy on Fiverr and quickly moved on to what actually mattered to his bottom line.
8. Dress like you are running for president. Don't wear a tux but always show up for the first meet wearing a well fitted suit, tie, clean shoes, etc. Everything you do, wear, and say (verbal and non-verbal) will shape their opinion of you. They need to see you as an expert and authority if you want to command the highest fee possible.

Just a few things off the top of my head.

 

[Dan_Cardone]

Decided to share my best tip: After Im done with a consulting project I will send the client a little personalized gift.

Usually its a leather journal that I have custom made with my companies logo on it, a nice branded pen, a business card, and a hand written note written on the first page of the journal.

Sometimes I shake it up. One client really liked coffee so I sent him a branded coffee thermos with a hand written note inside and a small note from the owner of one of his favorite coffee brand.

These gifts has probably given me like a 10000% ROI because not only do they often hire me again, they refer me to other entrepreneurs.

A little extra effort goes a long way.

 

[Ethan S]

@Ethan S I'd like to challenge you on this

-If customers think your price is too high, they are rejecting your price and not you.

-If you do it the right way, it will create a better name for yourself (Ethan is such an expert I can't afford him)

-There is no real way to measure the value --> really? Is there a way to estimate the value? (e.g. double relevant traffic leading to a potential double in sales? Or current traffic improving conversions via copy leading to %XX+ higher revenue/leads?

Here's how I would personally approach this:

-Offer a free digital strategy call/meeting. Have them fill up a form to tell you about their business/project beforehand.

-Send them some of the resources you've created prior to the call, so they can learn more about you and what you bring to the table.

-During the call, provide value as a consultant and if they want to work with you have a few options prepared for them

For example, creating a digital strategy for their business and goals (then if you want to offer implementation you can include how much it would cost to implement with you), coaching them/their team on project or retainer basis.
If you are serious about the consulting part, I'd recommend having offerings that have to do with your thinking v.s. implementation.

Implementation can be compared at $5/hr on Upwork. Thinking is priceless (e.g. Gary V being paid tens of thousands per participant in a group for a day with his team).

Thanks for your comment David. I appreciate you challenging me on this because you're right.. Just because they aren't currently tracking their results doesn't mean I can't implement strategies to help them with it. Thus creating a measurement for my success.

I think the consulting part is what I mostly want to go after because I truly think it's the most valuable..

Thank you again. This post has given me a lot to think about!

 

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[Ethan S]

Tell them exactly what to do...

And then ask them if they want to do it themselves, or you can do it for them.

Totally on board with this Steve.. Makes the sale really easy when you consult them on the plan first!

Mostly I'm just struggling to find a pricing model that both parties can feel comfortable with..


Could the answer be as simple as.. What do you feel comfortable paying for this?

Then creating a plan to fit inside of that.. Kind of just continuing that consultative role..

Thanks for bringing it back to simplicity Steve.. I can see now I've likely made this more complicated in my head than it needs to be!

 

[Ethan S]

I've been a consultant for a good while now. Here are a few tips that may help you:

1. Send them a basic questionnaire beforehand to fill out. You want to learn the basics of the business and you also want a question on there that ask them how many business books/seminars/courses/programs/coaching they have done in the last year. If their answer is "0" then you aren't likely to convert them into a paid client. The ones who answer with big numbers are the ones who will pay you and value what you have to teach. The depth of the questions you ask is also meant to establish you as a credible expert and authority.
2. Never charge on an hourly basis. NEVER.
3. Your questionnaire should allow you to find businesses that you can help create easy wins with first. For example: if one business owner tells you he doesn't know how to track his marketing results and doesn't know his numbers, that should be an easy one for you to improve.
4. Before you actually work with them, send them a box that contains anything that sets you up as an authority such as your book, copies of testimonials from former clients, etc. You also want to include either a DVD or flashdrive with a video on it called a "quick start guide." The purpose of this is to prime the client to A) Follow your lead and B) get them super excited to work with you. The video will tell them how your coaching works, anything they need to know before hand, anything they should read or watch before hand, and talk about results you have gotten with past clients. If this is done correctly then you will be able to extract higher fees from clients.
5. Always have a higher priced service you offer them at the end. Mine goes like this: Consulting Project -> Monthly coaching -> Mastermind Group -> Yearly 1 on 1 coaching. Each lever gets more exclusive and more expensive. Place emphasis on the exclusivity of higher level coaching.
6. Clients are not logical. Read that again because its true. Clients who return to you over and over will do so because of how you make them feel. Yes, you should strive to get them awesome results with their business but since most clients are not logical, you should also strive to make them feel important and good about themselves.
7. Some clients are simply ignorant. What they want you to fix often isn't their biggest problem. Fix it anyways (and as quickly as possible) so they will be happy and you can then move on to the real problem that holds them back. Example: I once had a client who was adamant that his lack of customers was because of his "outdated restaurant design and branding." No, it was because of his crappy location and complete lack of marketing. I outsourced a new logo and restaurant design to a guy on Fiverr and quickly moved on to what actually mattered to his bottom line.
8. Dress like you are running for president. Don't wear a tux but always show up for the first meet wearing a well fitted suit, tie, clean shoes, etc. Everything you do, wear, and say (verbal and non-verbal) will shape their opinion of you. They need to see you as an expert and authority if you want to command the highest fee possible.

Just a few things off the top of my head.

First off Dan I just want to appreciate you.. This post is so so helpful for me!

Right away I can see all the things I'll be implementing.

- Pre Screen Questionnaire (I actually am teaming up with local Chambers to send this out too)
- Box w/ Printed Portfolio w/ Dozens of "worked with" and "Testimonials"
- Pre Meeting video to show them exactly what we'll be working on
- Dressing better, Making them feel good and giving them a high quality gift

Some things I'm still struggling with. (I would appreciate feedback here if anyone has time).

- When you are selling a marketing consulting package who does the implementation?
Do I show the client how to do it? Do I do it myself? Do I source workers?
- Given the first question how do I price? Daily rates x times per month? Daily rates x project?
- When you present something project based do you simply break each item down into a spreadsheet with your estimated price? Do you take a deposit up front? How do you use risk reversal here (if at all)?
- How do I start a mastermind when I don't have even one person signed on yet?

Here is what I think you're going to answer to the questions.

- If project based price it based on project and ask them their budget first. Then find the prices of outsourcers or DIY and present them the full package. Making each project 100% custom.
- Project based can still be monthly as well because the project could be carried out over a longer term. The project is really about deliverables not a length of time.
- Monthly coaching is for people who want to do it themselves but want to talk w/ me about strategy every month.
- Mastermind might only make sense when I have a few people in a monthly coaching program from which I can just transition them?

Anyways.. Sorry for the long post! I really appreciate your help.

Please let me know if there is any way I can give back to any of you!

 

[Kung Fu Steve]

Complexity is the enemy of execution.

When it comes to pricing, I'd ask you first:

1. what do you want to earn in your business?
2. what do you want to earn personally (yes there's a big difference)
3. how many clients would you need to earn this?
4. what would you have to charge them?
5. what could you offer them that's 8-10x the value for what you're charging (what would you have to do for them in order to make this cost make sense?)

 

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