Marketing consultancy is a highly lucrative profession that can help you build an established career that lasts for years. Apart from being a challenging and fulfilling career, it is also one that pays very well.
Especially if you are an experienced senior marketing consultant whose work speaks for itself, you can make tens of thousands of dollars. Of course, like every other profession, your salary will increase over time, the more experience you have.
Standard pricing structure for marketing consultants
The salary of marketing consultants depends largely on the prices and rates of the services they offer. Today, most marketing consultants charge by the hour, or they charge by the project. These are the two most common pricing structures followed.
Below, we take a closer look at how charging by the hour and charging by project work.
- Hourly rate
Charging by the hour by following the hourly rate is the most common pricing structure that marketing consultants follow in the United States.
The hourly rate may differ from each consultant as it is dependent on a number of personal factors such as their experience, skill level, demand, geographical market, and other economic factors.
What many consultants do is double or even triple their hourly salary-based wage, and the amount makes up their total consulting rates. Many consultants choose to do this because of what is known as the rule of thirds. This is basically a rule that says one-third of your hourly rate goes to your salary, while one-third goes to expenses, and the rest goes to administration and paying off debt.
If you would also like to follow the rule of thirds for your pricing, all you have to do is take your hourly salary that would have earned if you were working under a company where you paid on a salary basis. Remember to include the benefits too, and simply double or triple that amount.
Analysis of consulting charges for freelance marketing consultants in the US show that hourly rates vary from $20 per hour at entry level roles to over $200 per hour for highly-experienced consultants with very strong professional background.
- Charge by project
The second pricing standard is charging by the project, which is a fixed price for every project that you work on. In most cases, this rate is based on a predetermined turnaround (measured in hours) that is assigned to the project. In other words, you just have to multiply your hourly rate by the number of hours that you are spending on that particular project.
In America, as well as many other countries, marketing consultants often follow the market rates when charging for their services. You research the average industry rates and simply charge how much everyone else in your field is charging. This is one of the most common pricing strategies that many consultants follow. It all boils down to the rate of your competitors as well as how much the industry can tolerate.
Besides, charging how much everybody else is charging can work in your favour in more ways than one. It sends the message to your audience that you are as qualified as anyone else and that you are a professional who likes to play by the rules.
But salary and hourly rates are not the only earnings marketing consultants make. Most marketing consultants have contracts with companies, for bonus and profit sharing. Basically, the consultants advise companies how to improve their productivity, marketing success, sales & profits. If their advice shows any direct impact on the revenue generated by the company within a specific timeframe, the consultants receive a certain percentage of the revenues as bonus or profit sharing.
Typically, marketing consultants in the US charge anywhere from $500 to $20,000 for profit-sharing or bonuses, depending on the size of the company, complexity of the project, amount of sales as a direct result of consultant recommendation and amount of increase in company revenue.
Strategist vs Coordinator
The terms that you use to describe yourself can also affect your rates and ultimately, how much you make. Marketing consultants are often referred to as either strategists or coordinators. In most cases, clients value a marketing strategist more than a marketing coordinator.
As a strategist, you take on more roles and responsibilities. You don’t just implement and coordinate a strategy that has already been developed – you are also in charge of developing that strategy. This means that you strategize and execute too, and this can take a lot of time and resources. Your clients are not just paying you for executing a plan, they pay you for your ideas too.
What is the benchmark for consulting rates?
As a benchmark, marketing consulting rates are typically twice the wage of the position in question. In some cases, it may even be three times the wage. However, ultimately all of this depends on:
- The city you work in.
- The academic qualification & certifications you possess.
- Your on-the-job experience.
- The number and nature of complex projects you’ve worked on.
- Your reputation in the industry as a consultant.
No matter how you calculate your rates, it is important to ensure that you use a consulting contract and agreement every time you offer your consulting services to a client. This is crucial because it enables you to clearly identify the services that are included, the rates and terms of payment, how you are protecting intellectual property (if applicable), and so on. It also helps you clearly define the kind of relationship that you share with the client.
An important factor to consider when it comes to your pricing structures and rates as a marketing consultant is professional liability insurance. As a professional offering advice and working with all kinds of clients, it is crucial that your marketing consultancy business is protected with the right insurance. Besides, the insurance you choose will determine your rates too if you follow the rule of thirds.
While determining your rates may seem a bit daunting at first, you don’t have to worry if you have a strategy that works for you.
Whether you need a general business insurance, professional indemnity insurance, a cyber liability insurance, visit BizInsure to learn more about insurance for marketing consultant.