One of the questions I consistently hear during the first call with a prospective client is, “How much does an email agency cost?” or “How do email agencies structure their fees?”

In reality, price is an important screener for both parties.

Email Marketing Agency Costs: The Buyer’s Side

For the buyer, it’s important to know if the budget is enough to hire a full-service email-marketing firm. More importantly, they should investigate the value and experience they can expect for their investment. Options exist for marketers seeking email help at rock-bottom prices, but a quality full-service agency isn’t likely to discount its prices to match these low-price providers—for several reasons.

First, demand for experienced email marketers remains high.

Second, quality email agencies must employ experienced email marketers to deliver for their clients.

Third, experienced email marketers command highly competitive salaries, which translates directly into hourly rates.

Instead of lowering prices, quality email agencies partner with their clients to ensure the programs the agency implements drive a positive return on investment. In short, every dollar you spend with an agency should result in substantially more money hitting your organization’s bottom line.

Email Marketing Agency Costs: The Agency’s Side

For the agency, it is important to know if the prospective client has the financial resources required to pay for quality work. Top-tier email agencies don’t want to be put in a position where they either go way over budget, or rush deliverables and risk producing substandard work.

On the contrary, top-tier agencies know it takes money to make money. Reaping the rewards of a well-run email-marketing program requires an up-front investment, but in time, the investment should drive consistent and predictable incremental revenue for the buyer.

Ultimately, agency pricing is tied to time. Most full-service email agencies will have a blended hourly rate of somewhere between $125 and $200 per hour, which consists of team members with extensive experience that may cost $250/hour or more, and less-experienced team members with lower hourly rates.

What Factors Impact Agency Pricing?

Every email-marketing program is unique and these unique factors impact email agency pricing models. Here are some common factors that tend to drive price:

  • Type of services provided – Email agencies provide a number of different services. All of these functions are needed to run an enterprise program, but often times the client’s in-house team (or even another agency) does some of this work. Not surprisingly, the more services you need from your email agency, the higher the cost will be. At the highest level, these include:
    • Strategic Services
    • Analytic Services
    • Creative Services
    • Technical and Platform Services
    • Production Services (including coding, QA, and deployment)
    • Email Acquisition
    • Account Management
  • Number of emails produced weekly or monthly – For production accounts, this is the one of the largest variables that impacts pricing. Obviously, the more emails that need to be created, sent, tracked, and evaluated, the more it’s going to cost. Production of an individual email can cost anywhere from $300 to $10k or more depending on email complexity, dynamic elements, number of content areas, number of links, originality of artwork, templates, segmentation, testing, and so on.
  • Number of triggered emails, journeys, or programs under management – Even when email programs—or portions of email programs—are automated, there is a need to monitor, manage and optimize them. The more of these programs that have been created, the more time required to evaluate performance and make updates. Over time, automated email programs require less effort than regularly produced newsletters, announcements, or promotions, but they take longer to setup and still require ongoing attention.
  • Data Complexity – Enterprise email programs require data. The number of sources and the methods required for accessing data can dramatically impact pricing. In instances where data sources are combined into a single data source and integrated with the email platform, the costs associated with setting up and managing integrations can be relatively low. However, this is often not the case in large enterprise environments where key data is spread throughout the organization and must be aggregated. This requires more time to maintain integrations, manage data pulls from disparate sources, and aggregate data for reporting (whether performed manually or integrated for real-time access).
  • Number of languages and/or countries supported – Many enterprise organizations require email programs to be managed in multiple languages and across multiple markets. While technical solutions can help manage the distribution of email content across these different languages and markets, production and quality assurance become critical to ensure that what goes out in each language and to each market is correct, which again increases professional service needs. Moreover, different markets often require different contact strategies, which has an impact on resource requirements across all service areas.
  • Number of client stakeholders – This is where an agency needs to understand your organization before it can give you a realistic price. The more stakeholders involved in decision making and the more approvals required, the more time it will take to finalize deliverables. When there are multiple stakeholders and/or agencies involved, someone needs to coordinate all of their input, ideas, changes, etc. Some clients choose to do this internally and route all feedback through a single gatekeeper (which keeps agency costs lower), while others choose to have the agency do this for them (which requires additional Account Management resources provided by the agency).

Project vs. Retainer Engagements

The vast majority of agency services are performed either on a project or retainer base. And when prospects ask, “How much will an email agency cost?” there is already an assumption about which model they are thinking about.

Projects

The advantage of project-based engagements is that it provides very clear parameters and expectations for the engagement, given that exactly what will (and will not) be delivered for a specified amount is documented in the contract. This can be particularly useful in establishing new agency-client relationships and helping the parties get comfortable working with each other.

Good candidates for project-based engagements include audits, strategy development, remediation of deliverability issues, new integrations, platform migrations, template development, and implementation of trigger programs or journeys.

Retainers

Alternatively, a monthly retainer provides the greatest flexibility and sense of partnership. In this arrangement, agency resources act in a staff augmentation capacity with defined roles. The agency is responsible for results: e.g., increasing engagement, driving more leads, generating more revenue, etc. Thus, the retainer approach allows for the agency to easily redirect efforts to those projects that are likely to be the most impactful. In our experience, this type of relationship provides the greatest long-term benefit to the client, as agency service teams are aligned in looking for the next opportunity to make a demonstrable impact on the client’s bottom line.

The Bottom Line

At Trendline Interactive, our focus is serving enterprise organizations and helping them to run and optimize their email programs. Our project-based engagements generally range from $10k-100k. Retainers consisting of multiple team members performing different roles start around $20k per month and can go up significantly depending on the factors outlined above.

Although a wide variety of factors impact pricing, ultimately agency costs are tied to the resources required to meet the client’s objectives. These come down to three major factors:

  • How broad is the scope?
  • How fast do you plan to implement and optimize new program components?
  • The seniority and experience of team members needed to get the job done right.

As you may have surmised, there’s no one-size-fits-all solution. Whether you go the retainer route or opt to work on a per-project basis, working with an agency is a highly collaborative endeavor. Pricing will similarly vary according to how you engage the agency. Though email boasts the highest ROI of any digital channel, it only works when done correctly—and collaboratively.

 

Further questions?

Contact us to setup a no obligation call to discuss your email marketing needs.

 

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Morgan Stewart