We are currently working on a great project for our client Detpak in collaboration with an awesome little art school in Soweto. Without giving too much away at this stage, it is all about using the kids' artwork as basis to create stunning new products for Detpak. Detpak continuously supplies the school with all kinds of support and from art supplies to paper to financial support.
Earlier this year, Matthys were off to meet with some current and new clients at the Digital Marketing World Forum at Beurs van Berlage in Amsterdam, Netherlands. Globecreative was one of the event sponsors and we had the opportunity to show off our work. Some great contacts were made that lead to some solid clients seeing the need for awesome creative work at Globecreative (SA) rates.
In modern times, most service-based industries base their pricing system on hourly rates. As with every pricing strategy, there are pros and cons, but as the product provided by service companies isn’t tangible, it makes it difficult to provide these at an amount that is fair, but still yields a decent margin to be worth the resources spent. In general, clients pay for time and labour in addition to usage of equipment, personnel or other items required to provide a service or product. But rather than seeing the costs of services as an expense, clients need to realize that when it comes do marketing, advertising or design, these costs are an investment in their brand, their exposure or their business as a whole.
Wikipedia defines value-based pricing, or value optimized pricing, in terms of a pricing strategy:
“Value-based pricing sets prices primarily, but not exclusively, on the value, perceived or estimated, to the customer rather than on the cost of the product or historical prices.”
It holds true that value-based-pricing is most successful when products are sold based on emotions (fashion), in niche markets, in shortages (e.g. drinks at open air festival at a hot summer day) or for indispensable add-ons (e.g. printer cartridges, headsets for cell phones), but how do does value based pricing compare to the world of marketing, advertising and graphic design?
In order to understand the implications of value-based pricing, let’s look at three pricing strategies commonly used by agencies and studios, namely time-based pricing, fixed-fee pricing and value-based pricing:
With time-based pricing, agencies/studios calculate every minute worked on a project and break that down to your hourly rate and charge whatever the formula states they should. This model can be accurate provided a client is aware each and every minute you work costs more. Therefore each revision will increase fees. Some clients are fine with this, some freak out because they didn’t understand the pricing structure.
Fixed-fee pricing or project-based pricing is where you calculate a price for each and every service you offer and essentially work off of a price sheet. This way you know a brochure costs X amount every time, a 3-page web site costs Y amoiunt every time, etc. This pricing model isn’t very flexible and as projects can become bigger than intended, with more changes and revisions needed, this becomes a problem. So it can result in those difficult conversations with clients telling them to stop with revisions or pay more.
On the other end is Value-based pricing. This model doesn’t adhere to any set pricing or per hour structure. Value based pricing prices services according to their perceived value or importance to the client. This one is a bit tricky. Essentially it’s the old “If you charge more, clients think you are worth it.” model. You can often use this model to increase revenue without increasing workload. This is why “Name Brand” items cost more than generic items – a perceived value when in reality the items or workload are / is the same. For a value-price system to work however, the value provided to the clients needs to be equal to- or exceed the costs that are charged for.
For a value-price system to work however, the value provided to the clients needs to be equal to- or exceed the costs that are charged for.
Anybody can design a logo. But a good logo requires research and understanding. In addition, a great logo often is only the result of a creative and though-driven apprach. Exploring several options, creating a harmonised and unique look and feel, a symbol with meaning, not just fancy words or colors to represent certain values of a business. Brands that look professional in gereral are seen as being professional. In general, value based pricing strategies have several advantages over fixed-fee or time-based pricing strategies. Some advantages for clients include:
- Costs are usually close to what clients are willing to pay
- Value-based pricing is often more affordable than time-based cost as not all time is calculated
- The pricing is more flexible and fair as “you get what you pay for”
As mentioned above, with value based pricing, “you get what you pay for”, and this notion is true not just in the service industry. One simply can’t expect to purchase a brand new 2012 BMW M3, full of the latest technology, safety features and gadgets for the price of an old second-hand VW Beetle that isn’t made of gold. In the world of marketing, advertising and design, the same principle applies. A designer can spend hours on end creating a website full of flashy buttons, big wordings and images and animated banners. This website is then passed on to a developer that codes the site, turns the static design into a fully functional website. An axcessive amount of time goes into this. But if the site looks shoddy and cluttered, is slow, hard to use or navigate or is filled with large irrelevant photos or images, the website isnt of much value to the business and charging for every minute spent on something that is essentially not a good investment for the customer, is considered a ripp-off.
A good design that works however, with toughtful created pages and easy-to-access content, product information or simply contact details, now that is of much value to the business. In the business-to-business environment, companies must know how their offering helps customers, that is other businesses, become more profitable.
Value-based pricing is something like the holy grail of pricing as is evidenced by the expansive literature on this topic (see Amazon). The principal difficulty is that the willingness of the customer to pay a certain price differs between customers, between countries, even for the same customer in different settings (depending on his actual and present needs), so that a true value-based pricing can be tricky, and sometimes simply not possible, but in most cases, the advantages outweigh the disadvantages. However, despite being difficult in implementation, any production and any market positioning should have a consideration of the value the product brings to the customer at the very early stages of product development and is, in fact, employed by many companies.
– An extract from Stack Exchange.
Businesses have been outsourcing for decades, contracting out work to a third-party for financial savings, or for capacity/capability reasons. The term “outsourcing” became popular in the United States near the turn of the 21st century, but the concept has been around for decades, dating back to the early ages even before slavery. Even in modern times, the term is often viewed with negative connotations, but why do more and more successful businesses resort to contracting individuals or organisations outside of their area, country or continent?
Article below as seen on Bloomberg View[separator type=”space”]
The U.S. presidential campaign has gotten sidetracked on a debate over whether Mitt Romney or Barack Obama is the worst offender when it comes to offshoring U.S. jobs. Although the claims on both sides amount to little more than vote pandering, this is still a debate worth having. Among other things, it reveals that the critiques of outsourcing made by Obama and Romney are misguided.
Economists who study global labor trends say companies create jobs outside the U.S. not just because labor costs are much lower, but also to pursue sales opportunities in new markets. They want to be closer to the economies that are growing the fastest and to be able to hire locals who understand the cultural and consumer trends. Even as labor costs become more equal, companies would still hire abroad because that’s where the talent pool often is. Companies that don’t do this for some patriotic reason would be at a disadvantage to European and Asian competitors, which would probably cause market share to drop and eventually result in U.S. layoffs.
The benefits of moving jobs offshore have been numerous. Outsourcing means less expensive goods and services for U.S. consumers. Workers in China and India, meanwhile, are becoming more like Americans, increasing demand for U.S.-made goods. Outsourcing also allows more advanced industries to replace outdated ones. Eventually, some jobs will flow back to the U.S. because of the combination of rising wages overseas, a stronger Chinese currency, and the availability of low-cost natural gas. Such “inshoring” is already beginning.
This season’s electioneering leaves the impression that companies are bad if they outsource jobs, and if they’d only stop being bad, the jobs would come back. Yet many jobs have been lost to automation, not necessarily to offshoring. The presidential campaigns fail to recognize that employment in middle-skill and middle-wage occupations is declining rapidly. If the candidates wanted to be constructive, they would tell voters the hard truth—that most of the mid-level jobs are never coming back. They should talk about their plans to improve math and science education, and how to retrain workers to perform more high-skilled tasks. That’s the conversation both candidates are avoiding, but shouldn’t.
To read Stephen L. Carter on Lincoln and Jonathan Alter on voter suppression in Pennsylvania, go to: Bloomberg.com/view.
In a world of too many options and too little time, our obvious choice is to just ignore the ordinary stuff. Marketing guru Seth Godin spells out why, when it comes to getting our attention, bad or bizarre ideas are more successful than boring ones.
“Creativity can solve everything” – George Lois (Google him).
At Globecreative, we want to know what your problems are.
How can we help? Give us the opportunity to solve them for you.
Let’s see. You may have issues like:
1. Staff is not inspired or giving 110% every day.
2. Profit not where it should be.
3. You are attracting the wrong crowd.
4. You are not reaching the areas and people that would be ideal for you brand.
5. Your investors don’t feel engaged in your brand.
6. The environment your staff are working in is not condusive to creative thinking.
7. You are waiting too long for the smallest projects.
8. There is no direct contact to your creative team.
9. Sometimes you have a brainwave at 11pm at night and don’t have anyone to talk to or quickly implement your idea.
10. You need a greater gap between income and profit.
11. Costs need to be cut, but you cannot sacrifice creativity.
12. You need to engage customers and get them to spend freely.
13. Productivity is low within your organisation
14. Corporate Communication is really lacking
etc, etc, etc…
We can go on forever, and so can you. But there is light at the end of the tunnel. Globecreative will discuss your problems with you and brainstorm solutions. We will then present it to you for consideration and implement every aspect.
Try us today. Chat to Willem and let’s arrange a meet and greet to get started on solving all your internal and external problems.
All companies, regardless of their size or offering, feel compelled to build a website as a tool to create awareness and promote their business. As a result, there are an estimated 1 billion websites in the world according to Internet Stats Live.
This number should give you pause when considering your online presence. With so many brands using the Internet to promote their businesses, how can you ensure that your website stands out from the rest?
Do Your Research
Your company website is not for you, it’s for your customers, so do your research to get to know your audience and what they’re searching for online. This information will allow you to custom-make your content and ensure that all your clients’ and potential customers’ questions are answered when they go through your website. Your contact number and/or email address is key should your clients require more information in a hurry.
Market Your Content
The content on your website should not be boring. Engage with your current and potential client base with creative content that is relevant to your business and expresses who you are as a company. Besides applying clever SEO keywords to your copy, explore new ways of keeping your potential customers clicking through your site, like “Easter Eggs.” In a SXSW 09 talk by Paul Annett from Clearleft entitled “Ooo… that’s clever!” he urges the use of “Easter eggs” – these are quirky and witty little quips/articles/comments that can be placed all over your website and which encourage people to read more and share.
Design To Delight
With so many websites in the world you can be sure that every design template has been used ad nauseam. Work with a reputable design company to make use of different kinds of media (video, image, sound) to bring life to the design of your website, and as difficult as it may be, ignore the temptation to overwrite copy. Always remember that when it comes web text, less is more, while the opposite is true for visually striking images.
Adaptability and Availability
A large majority of consumers access the web through their mobile devices, be it a smartphone or a tablet. Ensure that your website has mobile capability so that your potential clients are able to easily navigate your site no matter what device they’re using.
Assist The Flow
While it’s important to make your website easy to navigate, it’s even more vital to have integrated systems that work. Whether you are using your site to generate a lead system or
Think of your next corporate event: whether it’s a golf day, conference, trade show or product launch, how do you plan to keep your brand top of mind during the event? Forget about the usual – branded banners, umbrellas and brochures are a given – here are 3 ways to brand your corporate event to best garner engagement:
Get an Expert to Speak
The key challenge is to keep the crowd at a corporate event engaged and interested in the proceedings. One of the best ways to achieve this is by inviting an expert to speak on a specific subject.
Inviting an expert – preferably from in-house – to engage with those in attendance will position your company as an authority in your field. This professional will also be able to inform the audience on the different sectors your company is involved in and offer further insight and trend projections.
Top tip: Choose an expert speaker that is flexible; someone personable and confident that will be able to engage the crowd, share specialist knowledge and answer audience questions.
The Goodie Bag
While giving out goodie bags is an unspoken rule for corporate event planners, these needn’t have to cost you profits. Choosing the right goodie bags for your attendees should be based on your key brand message. These will form the final experience your attendees will have with your corporate event and need to be memorable. Here are 3 things to consider when compiling your goodie bags:
- Choose gifts that are useful: Think small gadgets, diaries, good pens – practical but beautiful items that attendees will use in their lives for months or years to come.
- Include a refresher: Compile an overview of the main ideas you wish to convey with your corporate event. What key methods did the speakers and experts share?
- Don’t forget a call to action: Include booking information, special offers and exclusive deals. The attendees will still have your event fresh in their minds and this will be your last opportunity to get them to invest in the ideas, products or services shared at your corporate event.
While your corporate event goodie bags needn’t be filled with expensive products, it’s important that you take this opportunity to have one last interaction with your event’s target audience. Give them a reason to follow up with you.
Don’t ignore the power of social media. You can use various platforms to engage with your target audience while your event is still in the planning stage, and at minimum cost. Social media channels can best work as communication tools, sources of information, and a great way for you to gauge interest in your event. If you’re hosting speakers who are sought-after experts in their fields, your social media channels will give you a platform to share these conversations online.
Top tip: Choose a relevant hashtag.
Hashtags are a great way to group together conversations about a specific event across social media channels. Be sure to share your hashtag when you send out invitations, and to encourage attendees to quote and share your official hashtag during the event. To further encourage engagement, hire a community manager to keep the conversation going on social media and to monitor what is being said.
Using social media can also help people in attendance to strike conversation with each other. Networking and engaging is not always easy face-to-face but a few retweets and replies (or post likes) can lead the conversation to the real world. Plus, your social media channels can help keep conversations going long after your event has ended, and provide you with a space (and a ready-made engaged audience) to start promoting your next event.