How Much to Charge as a Digital Marketing Agency

When running a digital marketing agency, pricing your services can be one of the most difficult challenges. How much is the right amount? Should you lower your fees to help smaller clients?

I sat down with Ben Hammel, CEO of Disruptive Digital Marketing, to discuss this critical topic. The conversation yielded valuable insights that every agency owner should consider.

How Much to Charge
Dennis Yu and Ben Hammel

The Minimum Threshold for Retainers

Ben Hammel believes that agencies need to set a clear starting point for their pricing. “Definitely, from listening to Dennis and also from Josh Nelson’s Seven Figure Agency,” Ben shares, “it definitely needs to be at least $1,500 a month retainer, plus ad spend. Not including ad spend in the $1,500.”

This figure sets a professional standard and ensures agencies can deliver high-quality services without compromising their margins.

I emphasize, “Nothing less than $1,000.” But what about the temptation to go lower? Newer agency owners often struggle with whether to reduce fees for smaller clients.

They may feel sympathy for small businesses with limited budgets and consider charging $750 or even less. However, as I explain, this approach often backfires.

The Pitfalls of Undervaluing Your Services

I ask Ben, “Why is that a mistake charging $750 or even less?”

Ben’s response is straightforward: “You can take those on, but you’re basically just creating a job. And also, a lot of times those clients aren’t as well qualified or positioned to benefit as much from your services, just based on the fact that they’re a smaller business or smaller brand.”

In other words, smaller clients often come with their own set of challenges. They may lack the resources, setup, or understanding to fully make the most of the expertise a digital agency provides. This mismatch can lead to frustration on both sides.

Another key issue is: “It’s more effort to serve a smaller client than a bigger client, and they pay you less, and they call you all the time. It’s like a triple headache.” Smaller clients tend to demand more attention, leading to an imbalance between effort and revenue.

As a great example of why pricing matters, consider my buddy Damon Burton, who owns one of the most successful and profitable SEO companies in the world. He has clients paying him millions, but you’ll never see him giving discounts on price. His success shows that premium pricing attracts premium clients who value your work.

How Much to Charge
Dennis Yu and Damon Burton (On the left)

Why High-Value Clients Are the Better Choice

Higher-paying clients, by contrast, often bring more stability and opportunity. Ben explains that these clients are usually better positioned to benefit from your services, making the relationship more productive and rewarding.

They value the expertise you bring to the table and are more likely to trust your recommendations. This situation not only makes the work more enjoyable but also allows agencies to scale effectively.

Ben and I both agree that pricing isn’t just about covering costs; it’s about creating a long-lasting business model that attracts the right kind of clients. Setting a starting point retainer ensures you’re working with clients who are serious about their growth and willing to invest in quality marketing.

Key Takeaways for Digital Agency Owners

  1. Set a Minimum Retainer: Start at $1,500 per month, excluding ad spend, to ensure you can deliver top-notch services without undercutting yourself.
  2. Avoid Undervaluing Your Services: Charging less than $1,000 often leads to short-term relationships with smaller clients who demand more effort. You should avoid these bad clients by charging a minimum of $1000 a month.
  3. Focus on High-Value Clients: Clients who pay more are generally better positioned to benefit from your expertise and require less micromanagement.
  4. Think Long-Term: Your pricing strategy should match your goals for growth, scalability, and maintaining a high-quality client base.

By adhering to these principles, you’ll not only protect your agency’s profitability but also foster more meaningful and successful client relationships. As I often say, “Pricing isn’t just about numbers; it’s about valuing your time, expertise, and the results you deliver.”

Remember, the clients you choose to work with can define your agency’s future. Make those choices wisely.

If you want to learn more about managing and scaling your agency, check out Agency Management.

Dennis Yu
Dennis Yu
Dennis Yu is a former search engine engineer who has spent a billion dollars on Google and Facebook ads for Nike, Quiznos, Ashley Furniture, Red Bull, State Farm, and other organizations that have many locations. He has achieved 25% of his goal of creating a million digital marketing jobs because of his partnership with universities, professional organizations, and agencies. Companies like GoDaddy, Fiverr, onlinejobs.ph, 7 Figure Agency, and Vendasta partner with him to create training and certifications. Dennis created the Dollar a Day Strategy for local service businesses to enhance their existing local reputation and make the phone ring. He's coaching young adult agency owners who serve plumbers, AC technicians, landscapers, roofers, electricians in conjunction with leaders in these industries. Mr. Yu believes that there should be a standard in measuring local marketing efforts, much like doctors and plumbers need to be certified and licensed. His Content Factory training and dashboards are used by thousands of practitioners.