When talking about agency pricing models, there’s no ideal model for all.
No two agencies have exactly the same talent, clients, budgets, ambition, nor expertise—and because your agency is unique, so will your pricing be.
Finding the pricing model that will work best for your agency will need to include:
- Your expenses, including overhead
- Your aspirations, such as what you plan to invest into
- Your team’s workload, and how to balance it out in the short and long term
- Your client’s ambitions—and making sure they’re happy
- Industry best practices
- Global economic conditions
The list goes on, but at the end of the day, your pricing model will revolve mainly around the profit it needs to generate.
In this article, we bring you the most popular and most profitable agency pricing models.
What Are the Top Agency Pricing Models Used in 2022?
The most popular ways agencies charge their services are:
- Project or fixed fee-based pricing
- Retainer fee pricing
- Time and materials pricing or “day rates”
- Increment or fixed fee-pricing
- Value-based pricing
- Incentives or performance-based pricing
- Licensing or product sales
According to a global agency landscape survey conducted in November and December of 2021, out of 169 agencies that participated in the study, 72% of agencies stated that they predominantly work on project-based or fixed fees. From the sample of agency leaders, 82% are confident that in 2022, they will deliver even more profitable growth than in the previous year.
Agency leaders are aware of scope creep, resource planning challenges, recruitment and retention challenges in 2022, and global inflation.
So, how do agencies expect to invest in growth by continuing to work many on predefined, fixed fees? Continuing to apply this pricing model will eventually lead to eroding profit margins.