There’s a number in your head right now. The number you charge clients. And if you’re running an agency, there’s a very good chance that number is too low.
I know because ours was too low for the first year. Not slightly too low — catastrophically too low. We were charging $3,000 a month for work that required 60+ hours of collective effort, which meant we were effectively paying ourselves less than minimum wage while delivering enterprise-grade strategy to companies with seven-figure ARR.
We told ourselves it was an investment. That we were “building the portfolio.” That the money would come later. Some of that was true. Most of it was fear dressed up as strategy.
The Fear Behind the Number
Here’s what nobody tells you about agency pricing: the number you charge is not a reflection of your costs, your value, or your market. It’s a reflection of your confidence. Or more precisely, your lack of it.
When Bruno and I set our first prices, we didn’t do a cost analysis. We didn’t benchmark against competitors. We picked a number that felt “reasonable” — which is code for a number low enough that no prospect would say no. We optimized for acceptance, not sustainability.
This is the trap. When you price low, you attract clients who are shopping on price. Those clients are, almost without exception, the most demanding, the least trusting, and the quickest to churn. You end up working harder for less money for people who value you the least. It’s a doom loop.
The Math Nobody Wants to Do
Let me make the arithmetic uncomfortable.
If you charge $4,000 a month and your team spends 50 hours on that account, your effective rate is $80/hour. Subtract overhead — tools, software, office costs, insurance, taxes — and you’re closer to $50/hour. Now split that across the people actually doing the work, and each person is generating maybe $25/hour of real margin.
That’s not a professional services firm. That’s a gig economy job with better branding.
The clients paying you $4,000 a month often have the same expectations as clients paying $12,000. They want strategy, execution, reporting, and availability. They want Slack responses within the hour. They want monthly calls that run long. The scope creeps because the boundaries were never firm, and the boundaries were never firm because you were too afraid of the price conversation to draw them.
What Happens When You Raise Prices
We raised our prices for the first time about eight months in. Not dramatically — maybe 40%. I was terrified. I assumed we’d lose prospects. I assumed the pipeline would dry up.
The opposite happened.
Three things changed immediately. First, the quality of inbound improved. People who can afford premium services are, generally, more professional. They respect timelines. They trust expertise. They don’t micromanage. Second, our work got better. With more margin, we could spend more time on strategy and less time scrambling to cover hours. We could say, “Let’s do this properly” instead of cutting corners. Third, and this is the one nobody talks about — our confidence increased. There’s a psychological shift that happens when you charge a rate that reflects real value. You show up differently. You push back when the brief is wrong. You recommend the right approach, not the cheap one.
The Anchor Problem
Most agencies set their prices by looking at what other agencies charge. This is a mistake for a simple reason: most other agencies are also underpricing. You’re anchoring to a broken benchmark.
The right way to price is from the inside out. What does it actually cost you to deliver excellent work? Not adequate work — excellent work. How many hours of senior time does that require? What tools and resources? What margin do you need to reinvest in the business, compensate your team fairly, and build a reserve?
When you do that math honestly, the number is almost always higher than what you’re currently charging. Sometimes significantly higher.
A company we worked with — a SaaS platform in the fintech space — was paying their previous agency $5,000 a month for content marketing. That agency was producing eight blog posts a month. Eight. At that volume, there’s no room for keyword research, competitive analysis, editorial strategy, or quality control. It’s a content factory, and the output reads like one.
We came in at three times the price and produced four posts a month. Half the volume, triple the cost. And within six months, their organic traffic had grown more than it had in the previous two years combined. The difference wasn’t talent. It was margin. We had the room to do the work properly.
The Clients You Lose Are the Ones You Should Lose
When you raise prices, some prospects will say no. This feels like failure. It isn’t.
The prospects who balk at a fair price are telling you something important about how they value marketing. They see it as a cost center, not an investment. They’ll negotiate every invoice, question every deliverable, and leave the moment someone cheaper shows up. Losing those prospects early saves you months of misery later.
The best clients I’ve ever worked with never negotiated on price. They negotiated on scope, on timeline, on deliverables — but not on price. Because they understood that quality requires investment, and they were buying quality, not hours.
The Uncomfortable Part
The uncomfortable truth is this: if every prospect says yes to your pricing, your prices are too low.
That’s not a clever maxim. It’s basic economics. If there’s no friction, there’s no filtering. And if there’s no filtering, you’re not attracting the right clients — you’re just attracting all of them.
A healthy close rate on proposals is somewhere between 30 and 50 percent. If you’re closing 80 or 90 percent, you’re leaving enormous value on the table. More importantly, you’re capping the quality of work you can deliver, which caps the results you can generate, which caps the case studies you can build, which caps your ability to charge more in the future.
Pricing is not a line item. It’s the foundation of everything else. Get it wrong, and the whole structure tilts. Get it right, and you build something that can actually sustain excellence over time.
Raise your prices. Lose some clients. Do better work for fewer people. The math always works out.