As someone who owns an email marketing agency and also someone who uses an email marketing agency in my own eCommerce brand, I have seen all the ways you can charge for email marketing services and be charged.
"You should charge a rate that gives your client a great ROI and you a healthy margin"
Like any business, the higher the ROI the more you can and should charge. The lower the ROI, the harder it is to justify what you are asking for. As an eCommerce client, your email marketing agency should be one of the highest if not the actual highest ROI marketing you do for your online store.
Email marketing services typically charge in 2 ways (Performance or flat rate)
Performance - When you charge your client based on performance it is typically a percentage of revenue driven from email. It can vary based on revenue tiers. This is the least common type of pricing I see email marketing agencies charge.
Example: Klaviyo email revenue for September = $500,000 x 3% = $15,000
That ROI for a client would be 33x! Since email marketing doesn't cost much in comparison to running paid media that ROI is even higher. Email marketing is a huge source of profit for most eCommerce brands.
Flat rate pricing - This is pretty straightforward as you charge a flat rate for a set amount of deliverables.
Example: 10 emails, 2 SMS campaigns for $4,200. There is no motivation for the email marketing agency to send more emails because it is a flat rate, not performance.
Per Hour - I rarely see per hour or per email but some freelancers will do this. It is hard to do that if you are truly offering a done for your email marketing service that includes strategy, design, copy, and technical sending.
How much will you charge for your email marketing services?
The best way to charge for email marketing is to do the following:
1 - Audit your potential client's Klaviyo account
2 - Put together the best strategy you can
3 - Include a very clear list of deliverables. The greater the detail the better.
The price you charge should vary based on how many deliverables will provide your client with the best results.
The key takeaway for deciding how much to charge is to price based on what is needed to provide your client with the best results. This one statement will allow you to be fair to your client, you, and your employees.
What does email marketing cost?
The email service provider software itself is relatively inexpensive and variable as you gain new subscribers, not to mention this cost is incurred by the clients, not by the agency or freelancer offering email. The cost to build an email will depend on your team setup.
Here is who you might expect would build your email campaigns and email marketing strategy.
1 - Copywriter
2 - Email Designer
3 - Klaviyo Tech
4 - Email Strategist
5 - Account manager
The email marketing agency cost varies by how efficient you are with your employees. The cost of the team to make these email campaigns varies directly with how much you pay them to do the work.
Typically if you are a freelancer and doing all the email marketing yourself, your profit margin will be the highest it will ever be.
Building teams for an email marketing agency is extremely difficult and expensive. Your employee and client churn which is always influx is the biggest factor impacting your email marketing agency's cost to build email marketing campaigns.
The cost of email marketing can be as high as 70% of a client's retainer and that is why having a lean and efficient team is required to run a profitable email marketing services company.
Becoming a top email marketing agency takes a year of experience and typically a true understanding of what it takes to run an eCommerce business.
How do you go from freelancer to email marketing agency?
I believe in any business you start that you truly must be an expert in all areas before you can grow your freelance or start-up into an email marketing agency. The key to making this transition is processed. The nature of email marketing is fluid and it requires your team members to have a clear understanding of the deliverables and the strategy behind the service you offer.
To make this transition successful:
1 - Document your current processes
2 - Simplify
3 - Simplify again - Seriously I mean it. You can't scale if it's complicated. (I had this conversation with my partner at my email marketing agency for years.)
4 - Make loom videos of every process
5- Only hire people who have the exact experience you are looking for
6 - Be crystal clear to your client exactly what your email marketing services include (you can't be too detailed)
7 - Try to use only one email marketing software (if possible - we only use Klaviyo - because its the best)
8 - Let your employees update your training for you to make it better (this is the holy grail)
What services does an email marketing agency offer (Email marketing campaign, Email Design, etc.)
The core of any successful email marketing service offer.
Email marketing strategy
Email campaigns that follow that strategy
Flow projects (building out your automated emails)
Email design and copy for those email campaigns
BFCM email strategy
Email campaign calendar
How much will you charge for your email marketing services?
Let me know in the comments below.