For many companies, effectively executing winning branding, advertising, and marketing initiatives can be somewhat daunting. This could be coming up with a perfect marketing plan, developing a brand story, or identity. Also, it is highly likely that you will need a talented team to handle creative tasks, such as graphic design, content writing, and website development. If you are stuck in this exact situation, you are probably interested in learning how to budget for these creative tasks. First, we would recommend that you divide the tasks into different stages: strategy and execution.
Strategy Vs. Execution
Graphic design or copywriting is done by highly skilled personnel. It may come with relative affordability, but organising or managing the work process costs a lot more and needs more expertise. Most of the time, different individuals or teams are tasked with handling the strategy and execution phases. Often, executing branding or marketing tasks might be passed unto the consultant, but a marketing consultant’s core duties are to direct, coordinate, and supervise every project’s strategy and delivery.
How much should be paid for marketing then? Before we tackle this question, you need to understand that you get what you pay for. Top-rated marketing consultants will render services that stand the test of time, and it reflects in their pricing. While you can still find help with hourly rates, it can only measure efforts that go into a current project.
Marketing Consultants’ Standard Pricing Structure
The pricing of a marketing consultant is built on one of two plans. First is an hourly rate, which is probably also the most common. The second is a fixed charge on a particular project. This is often calculated based on a predetermined turnaround (in hours) assigned with the project. So, the marketing consultant just multiplies their hourly rate by the number of hours associated with the project. The consultant’s hourly rate is influenced by their skill level, experience, economic factors, geographical market, and demand. At the end of the day, you’re paying for the consultant’s time while still being able to cover other expenses and remain profitable.
For instance, we have found that the hourly rate ranges from $125-$300. This is based on our experience, and it will vary a lot depending on the consultant’s resume, demand, and overhead. Your regular consultant would usually charge between $150 and $250 per hour. This can be a shock to those who might want to make a direct comparison between these rates and an employee’s salary, which is around $50 per hour ($100,000 a year). What you should is to factor in all the processes that go into executing a project.
Let’s break things down a bit. Take a look at a 10-hour project involving a basic marketing plan for a short-term marketing campaign. If you go with a rate of $180 per hour, you will invest $1,800. Meanwhile, if you give it to your in-house team, you might only spend $500. So what sense does it make to hire a consultant? Why not leave it to your in-house team? The answer lies in a project’s actual cost.
Weighing Up the Costs
Generally, a “marketing strategist” is more valuable than a “marketing coordinator.” This is based on these terms’ common usage. “Strategy” is usually a small aspect of the entire process, while the actual execution of that strategy might require much more time. A marketing coordinator can command a yearly salary of $55k* to $70k*, while a strategist commands $110k* to $180k* yearly. Those numbers in terms of hourly rates will amount to $28-$35 an hour versus $55-$90 an hour. Also, they need equipment, employment taxes, vacation time, lunch hours, benefits, office space, and you’ll have some time lost at the water cooler that can’t be recouped or recovered.
This causes a significant increase in the cost per hour, but still less than what a consultant charges per hour. The downside is that a productive employee anticipates a full-time living, which means that the 10 hours of a six-figure employee becomes 38 hours a week. Generally, keeping the more tactical person on staff on a full-time basis is considered counterproductive and unnecessary.
Here is where consultants thrive. For a fraction of their time, a consultant commands more per hour based on their expertise. You don’t have to absorb all the costs connected to their employment; they do that for you.
What Benchmark Should I Use To Pay A Marketing Consultant?
As a benchmark, the rates for consulting fees should be two times, or in most cases, three times the wage of the position in question. That means that a strategist that usually charges on average $75 an hour should command $150-$225 an hour. Freelancers typically fall into the “double” category, and a consultant working for a more prominent firm belongs to the “triple” category. You might decide to pay a little more than the norm; the most important thing is that you are paying only for the time you need.
Now, let’s be more specific. Let’s discuss value here. What if you hire a consultant for a 10-hour ($1,800) strategy that brings in a $10,000-increase in profit? Would that be worth the initial investment? We believe it would. As mentioned earlier, the best approach is to pay for a service based on the value you are getting – instead of materials and time. Imagine if a more tactical consultant charges you $100,000 for similar services, and wants to spend 5 hours on your project. Would you give them the project? Here the value is the benefit you think your business will derive from the result they deliver.
If you have to pay $1,000 for a week of advice and brainstorming with zero return, you might as well flush your money down the drain. Whereas, if you invest $100,000 into a tactical process that delivers a $1 million increase in profit, that would be a wise and smart investment. In this scenario, most businesses wouldn’t worry about the amount of billable time it lasted. We bet you’d grab the deal in a heartbeat, too.
We hope you know how best to assess a marketing consultant, and would advise that you take some time out to consider all options, analyse the numbers, and decide if securing the services of a marketing consultant is the best way forward for your business.
*Information sourced from Michael Page Australia Salary Benchmark Guide 2020
Want to know if a Bright Owl Marketing Consultant Can Help Your Business?
Our senior marketing consultants each have over 20 years experience across multiple industries and have been able to help our clients achieve their business goals without the need of adding an extra overhead or another headcount. This means that you can be confident that our advice is based on real working experience from start-ups, small and even large companies.
We work hard to optimise your marketing budget, and develop omni channel marketing solutions than don’t simply focus on a single channel, but the entire marketing function using effective digital marketing and offline strategies customised to your product or service.