Choosing the Right Pricing and Contract Models for Your Agency

Content Amplification Podcast

Host: Shaun Whynacht

Guest: Marcel Petitpas, CEO of Parakeeto

In this episode of the podcast, Shaun Whynacht sits down with Marcel Petitpas to dive deep into one of the most challenging aspects for agencies: pricing and profitability. They discuss various pricing models, how to structure them, and the importance of aligning pricing with the value delivered to clients.

Episode Highlights:

• Introduction to Pricing & Profitability: Shaun and Marcel introduce the topic, emphasizing the importance of structuring pricing models to build a profitable agency that serves its clients effectively.
• Marcel’s Background: Marcel shares his journey from running a virtual real estate tour agency to becoming an expert in agency profitability, highlighting his experiences and lessons learned along the way.
• Different Pricing Models: Marcel outlines four main categories of pricing models for agencies:

1. Time and Materials Billing: Selling hours, days, weeks, or months.
2. Abstracted Versions of Time-Based Billing: Broader time horizons or larger buckets of team rates.
3. Flat Rate Pricing: Fixed costs for specific deliverables.
4. Value-Based Pricing: Pricing based on the value or performance outcomes delivered to clients.

• Utility of Time and Materials Billing: Marcel explains situations where time and materials billing is beneficial, especially for high-risk or undefined scope projects.
• Indicators for Changing Pricing Models: Signs that an agency might need to adjust its pricing model, such as consistently going over budget or the methodology used conflicting with the pricing structure.
• SaaS-Based Service Agencies: Insights on how agencies offering SaaS products should approach pricing, including the importance of considering pass-through costs and understanding agency gross income.
• Future Trends in Agency Pricing: Marcel shares his observations on the increasing complexity of pricing models in smaller firms and the importance of internal specialization for future agency success.
• About Parakeeto: Marcel discusses his company, Parakeeto, which provides software and services to help agencies measure and improve profitability through actionable insights based on operations data.

Resources Mentioned:

• Parakeeto Website
• On Pricing Models: https://parakeeto.com/blog/how-to-identify-the-right-pricing-strategy-for-your-produc-with-marcel-petitpas-episode-68/
• Toolkit: http://parakeeto.com/toolkit?utm_source=Earned+Media&utm_medium=Podcast+Appearance&utm_campaign=Content+Amplification+Podcast
• For solopreneurs who want to scale a team: https://www.youtube.com/watch?v=RXaNXMzcPoY&ab_channel=SolopreneurCoach-MikeMoll
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Connect with Marcel Petitpas:

• LinkedIn
• Twitter

Final Thoughts: Marcel leaves listeners with the encouragement to explore different pricing models and find the one that aligns best with their agency’s strengths and the value they deliver to clients.

How to Work with Parakeeto: If you’re interested in working with Parakeeto or learning more about their services, visit their website or check out their free agency profitability toolkit.

Closing: Shaun thanks Marcel for sharing his valuable insights and expertise on agency pricing and profitability, wrapping up the episode with a note of appreciation for his time and knowledge.

Tune in to this episode to gain a comprehensive understanding of how to structure your agency’s pricing model to ensure profitability and sustainable growth.