Value, an important measure of an item or service’s worth to you, your business, and your customers. How do you know something has value? How does value effect price and is a product worth more than a service? Let’s find out, this is the Lentil Way of measuring the value of a service.
Now, firstly we must discuss the difference between a product and a service. In the world we live in today, a product such as a chocolate cake (yum) has an obvious worth and value. We know if the cake was worth the money, we paid for it because quite simply, we ask ourselves, did it taste good? Did it fill us up? Did it feed the desired number of people, or did it crumble into a mess because it was dry and yucky?
Obviously, we can easily decide the worth of a product, simply because the desired outcome is obvious to see, feel, hear, taste depending on what that product is. It’s probably why we pay for products upfront when we’re in a shop rather than asking for a 30-day invoice then paying 10 days late… *Rolls eyes. * Ok, we’ve all been there, we’ve fulfilled the desired service that our business offers, but then we face a challenge when it comes to payment? Why?
For some reason, a ‘service’ is always deemed less important to pay for or the price and value of said service is questioned. Now, no matter the price of your service, you’ll always have someone looking for more for less.
So, why is a service deemed to have less value when compared to a product? Maybe it’s simply down to the ease of scaling the value of a products return over a service provided which may take a little longer to reveal its return.
What value is actually in a service that we pay for?
Well, depending on the service in question… I don’t know, let’s look at social media management, seeing as we are a social media agency 😉. You can count the years of hands-on experience in a certain trade, training or experience on the service itself, hours of work behind the scenes, travelling to and from customers, the personality and compatibility of the service provider and the general know how, and connections developed over time. You’re not simply paying for a product that, yes of course took time to develop and make, but is now replicated and the same each and every time… You’re paying for the tried and tested methods, behind the scenes knowledge, the time and passion of a person or their team.
As a customer, what are you getting for your money?
Again, if we look at social media management and marketing for an example, there’s a huge scale in pricing depending on what you and your business are looking for. From incredibly affordable to a full expense, from a short-term investment to a long-term business plan. Let’s take a look at some example pricing scales.
- Option A) ‘Cheap as chips.’ You can of course find someone to take care of your social media management for as little as £30-£50 per month. This is obviously the lower end of the scale and often where a start-up agency will start their pricing. For instance, Lentil Marketing’s founder, Kai Davis first started off by charging just £45pcm to his first client. A lovely lady who was a self-confessed ‘technophobe’ who needed some help with her business. Now, at this stage, Kai had little experience with social media management, but simply put, the experience level reflected in the price. This can be an affordable option for the smaller business owners, but keep in mind that the person may be in the early stages of their development as a business themselves.
- Option B) ‘Top notch.’ The other end of the scale and a realistic price for general management of your social media can be anything from £400-£1500+ per month. This price doesn’t necessarily mean you will get more posts or more time spent on your business… But it of course reflects the larger agencies with a collective of experience and know-how. You’re also paying for the tools and staff that you’ll have access to with the larger agencies. However, will you get the personal touch? Will you see a return on such a large investment? Only you as a business owner can judge that. This end of the scale has been priced more for a larger market, the higher turnover businesses that desire or need the higher end of marketing and management support.
- Option C, or A and a bit? Hmm… So, we have the two most common ends of the pricing scale when it comes to social media, but is there a middle option? There is, but it’s normally more difficult to find and can often be looked over due to pricing. Now, as a business owner, you need to save the pennies, but you also need the experience behind you to look after your business. Ok, this is starting to open a minefield, let’s explain further below…
Yes! You can have an affordable price for your social media management and yes you can have the experience that your size business needs! Think of it as a sliding scale, both on price and experience/tools.
If you are a start-up or a quiet, small business then the lower end budget management will be more than enough for your business. But the larger the business, the larger your requirements. That’s where the larger agencies come in. If you find yourself somewhere in the middle though, not a small business and not a global jet setter, then you’ll need a service that suits both your price range and experience requirement.
Now, in the evolution of a social media manager, you can go from trying it out alone and charging a small amount while you learn to then jumping into a larger agency and working for them. Now, this is where the middle step we spoke about comes in. Some of those small start-ups go on to scaling their agency and making something of their own – These guys are where you’ll find the middle pricing and experience level.
If you’ve not guessed yet, that’s where ‘The Lentil Way’ comes in… (Other businesses also operate within this sector, #Justbeingfair.) We have scaled the business to become an affordable service with real-life experience behind us. Lentil Marketing saves costs by teaming up with local agencies who provide other services that we can use to help our customers, from websites to SEO, design to print, plus so much more.
That means, you can get the middle option that you’ve been looking for… Charging from £99-£300 for social media management and offering a multitude of bolt-on type services that allow you, as a business owner, to choose what you need. You pay for the experience and decide if you wish to pay more for the added tools and services that the larger agencies offer. Simples… What’s more, with a smaller or rather, a middle-sized agency such as Lentil Marketing, you get the value-added personal input and time, the personal touch. You see, how often do you think the larger agencies have to meet with clients or to spend with their clients onsite? We pride ourselves in being able to visit and spend time to get to know our clients and consider ourselves to be working within your business rather than ‘just’ fulfilling a contract.
We’ve now assessed ‘what you’re getting for your money’ but how do we determine the value of that service? Of course, we need to look at the work that has been done, the results you have or will see and lastly, obviously the price you have paid for those results and hours of work.
The value of hard work and experience.
As we mentioned before, when working out a service’s value, the price you pay for a service must show a return on that investment (ROI.) We must also take into account the experience, tools at your disposal and hours worked, and finally the extra perks of working with that particular agency.
Here is a little equation that we have developed to help you work out the true value of a service, not forgetting all the smaller components involved in setting a price.
Time + Experience + Tools + Additional perks + Customer service – Price paid = Value of service
At Lentil Marketing, we love, appreciate and value our customers… This equation can help on both sides of the line – Service provider and client. Knowing the true value of the service you are paying for but also knowing the value of the service you are offering. Understanding the work being put in over the years before a quote has even been created is important too.
What experience do we have at Lentil Marketing?
Lentil Marketing works with a number of clients from different sectors. From the marine industry to hospitality, manufacture, and trade services, so what gives us the experience and know-how to work with these sectors?
Forgetting about our 5+ years of experience working directly with small and medium businesses with their social media and marketing needs. We also have years of hands-on, sector specific experience to add to the mix as well.
- Marine sector – Kai worked for 9 years as a boatman at an exclusive yacht club after 2 years of work experience at a small training centre working with young people on the water. Within those years, Kai has also worked for a number of yachting events such as the Americas Cup and other, smaller events with other yacht clubs as well as driving launches for their members. From this, Kai worked for 5 years at a local marine safety manufacturer, building lifejackets and servicing them for safety.
- Hospitality – Kai has also worked for many years across several different types of hospitality business, from shops working with customers and products to working in cafes and restaurants of all shapes and sizes. Working front of house and within the kitchen environment.
These skills and experiences have allowed Kai to develop his social media experience to suit the needs of similar businesses of those he has worked with or for in the past, even picking up a number of ex employers as clients.
Other than the hands-on experience from Kai, Lentil Marketing works with other agencies to offer a wider range of services. Kai has learnt not to over offer services unless we have the relevant experience, therefore working with other agencies who offer SEO, website design, graphic design, photography, and videography to name a few has allowed Lentil to offer a vastly improved service to our customers.
So, how do we calculate the worth of a service?
As we have seen, there are many factors to consider when weighing up the value of a service that you are either currently paying for, or one that you are reading a proposal for as we speak. Making sure the person or agency in mind have the skills and experience that you need. Ensuring they have the tools to provide the service efficiently and clearly. Taking into consideration what is on offer, will they come to you or are you expected to go to their office. Are there any added extras on offer, can the agency offer you more for your money and how much time are you expected to put into the project yourself?
Remember our little equation, this will help you to see just what really goes into the value, remember the time the agency spends on your business, the experience, and tools they make available to you and the customer service or extra offers they bring to your business. The price of a service plays a small part of a much larger picture.
At the end of the day, consider your own budget and what you need in return from the service. Can you afford what you really want, or do you need to scale your expectations to what you can afford? Is it worth spending less on something, knowing you’ll potentially get less in return? Equally, will you necessarily get more from spending more? Only you can decide this. If in doubt, speak to the agency, be open and honest about any concerns you might have. A genuine agency will help walk you through the results and expectations from your chosen package.
Thank you for reading our article on valuing a service, it’s important to take your time and know your budget when you sign up to any service, especially if they have fixed terms or policies on minimum service lengths. Know your own worth and understand what you are asking from an agency before you say yes!
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