Marketing analytics is a powerful way for advertising and marketing agencies to grow their bottom line, either by attracting new clients or expanding the relationship with existing ones.
To succeed, though, you need clients who’ll pay for that work. Selling marketing analytics to the first few clients can be one of the toughest challenges for agencies that are launching this kind of practice.
One way to overcome this obstacle? Tier your service with different levels of insight and detail, at different price points.
A tiered offering allows you to meet clients where they are, with the budget they have right now, while leaving the door open to evolving the relationship as their needs and level of investment change.
Alight Analytics helps advertising agencies across North America to build and grow their marketing analytics programs. Some of our most successful partners have used a tiered approach to turn analytics into a revenue generator.
In this blog, we’ll cover some essential best practices, including:
- Why you should position analytics as a product instead of a service
- What a tiered analytics offering might look like
- How to use tiers to grow the client relationship
Create an analytics product
Most of the time, agencies sell services. We recommend positioning your marketing analytics offering as a product.
A product is simply a defined deliverable or set of deliverables with a known production cost and, ideally, a distinctive name.
Products are a good idea for a marketing analytics offering because …
- They’re easier for prospective clients to understand, reducing any apprehension they might have about making a purchase. It gives prospects a clear idea of what they’re buying.
- They offer a straightforward starting place for clients who might be relatively unfamiliar with marketing analytics. You skip the awkward dance of figuring out what the client needs (or thinks they need).
- A product is also less vulnerable to scope creep, which could eat into your margin. By clearly defining what the client is purchasing, it’s harder for them to ask you for unpaid extras, and it gives the agency an opportunity to upsell when the client asks for more.
- It’s easier to create a repeatable, efficient process for producing a product. As you do more of this work, you’ll become more efficient, allowing you to increase your profit margin.
Just because your analytics offering is presented as a product, you still have the ability to customize it if a specific customer has a request.
Ideally, though, you won’t have to do that very often because you’ll have developed a lineup of products that appeal to a range of clients.
Create a tier of products with different features and pricing.
Creating an analytics product is a good idea. Creating two or three products is even better, so you can appeal to clients with different needs and budgets. We recommend building an analytics program with at least three tiers, each offering a distinct value proposition and price:
- Tier 1 should be an entry point for clients who don’t have a big budget, but who want updates on media and website performance. For an agency, a Tier 1 product might be a marketing dashboard that offers basic reporting by channel. It should be as automated as possible. Some agencies offer it to clients in a self-service format through platforms like Tableau or Google Data Studio.
- Tier 2 should meet the needs of the majority of your clients. You could take your Tier 1 marketing dashboard and enhance it so that users could drill down by campaign, ad group or creative — it could, in fact, be a series of dashboards. You could incorporate the client’s sales and lead data, allowing you to draw connections between media spend and business results. This is where many agencies start including custom insights from analysts.
- Tier 3 should encompass the most expansive version of your product. For an agency, that might include more advanced data science work, like a calculator that lets clients see how much new business they could expect for various levels of media spend.
That’s not the only way to set up an analytics offering, though. The example above is focused on level of insight, but you could just as easily structure yours around the complexity of a client’s data ecosystem. Your Tier 1 might cover one to five data sources that you can fully automate. Tier 2 could serve six to 15 sources, while Tier 3 would cover every data source the client uses.
Or what if you based your analytics products on frequency of reporting — monthly (Tier 1), weekly (Tier 2) or daily (Tier 3)?
It really depends on what your clients want and the nature of the work you do for them.
Putting it all together
A tiered analytics offering allows you to determine what level of insight your clients are interested in and what they’re willing to pay.
It also makes it easier to “stair-step” the relationship. Some clients might come to you asking immediately for a Tier 3 solution, not realizing just how much work they’ll have to do in order to reach that level of insight. You might be able to instead start them with a Tier 1 or 2 product and gradually move them to Tier 3.
When you introduce a tiered offering of analytics products, it’s probably going to work best for new clients or clients who haven’t used your analytics expertise before. What do you do for existing clients who currently receive analytics support from you?
You have the option of grandfathering them in and letting them continue to pay for their current service at their current pricing. Of course, if your analytics product is valuable and distinct enough from what they’re currently receiving, you might be able to transition into your new tiered pricing. Whatever path you choose, make sure your service for these legacy clients is as automated and efficient as possible. That may include a review of how they’re using what you currently provide. Maybe they don’t need a weekly report on Metric X.
Clients are willing to pay for marketing analytics
Analytics has value. And if you’re creating value for your clients — helping them to optimize their spend, generate more leads and understand their performance in greater detail — then you should be compensated for that work. If you communicate that value clearly to your clients, you might be surprised by how eager they are to invest in what you’re offering.
Creating a tier of analytics products is simply another way — in our view, an incredibly effective way — to communicate the value of your analytics expertise to clients.
Looking for more practical advice on building a successful, profitable marketing analytics program? Then you should check out “The Agency’s Guide to Making Money Off Marketing Analytics.” Download your copy today!