How Much Should I Pay My Advertising Consultant?
Whatever they are worth!
As a consultant, that’s my standard answer. But I know it is a bit more complicated than that. Hourly rates range from $ 50 to $ 500. Some are worthwhile and some not. You would probably say the same about your lawyer, accountant, and doctor. Each is an expert who should be looking for your own interests. After all, if you are successful, then they benefit.
But advertising is a different animal. Let us use the mechanic as an example. The car runs rough. You bring it in and the guy tells you it needs an engine overhaul. You trust him to do the right thing, and the next day you get to your vehicle. He presents you an invoice that all work and you write a check. Hopefully it is now well and you’re both happy.
Compare that to advertising. Your business is slow and you hire a consultant. He reviews your current campaign and make a recommendation. You acknowledge that he or she is professional and let them run the show. A month or so goes by and the business is still bad. You come back and demand a refund. Sorry, it is not happening. Unlike the car, you could return and have more work done to correct the problem, the marketing cost was already chewed through the media. There is nothing to return or refund. Is it the fault of the consultant? It depends. Do you overreact expect miracles? Maybe.
If the consultant was paid only for results, as a doctor would only get paid if he will heal. The doctor prescribes a course of medication according to its best estimates and the use of his vast experience of previous cases. If treatment fails, still the doctor is paid. He would try a different type of action and still get paid for that.
Marketing is one of similar ilk. The consultant makes a recommendation based on history or case studies produced some results for specific companies. It is like picking stocks based on past performance. They may or may not work as expected, but what does the consultant to use for their proposal? Each campaign comes with that reservation and the business owner must understand that risk in advance.
So, when it comes to how much the adviser should be paid, it is more an exercise in ROI or return on investment. If he succeeds and helps the company prosper, what’s that worth? If he fails, he has really damaged or just not helped the company to do better? I would never fault a good marketing consultant for a bankruptcy. There are usually many other factors involved. Moreover, a reasonable compensation for services rendered an hourly rate that is competitive with other consultants or a fixed fee based on a planned schedule of the required work.
In no case should the consultant charge a percentage of company profits gained. It borders on unethical behavior and may lead to numerous problems, including violation of the privacy of the accounts of the company. Check their references and credentials first, as you would anyone you are considering before making a major decision. You have a good feeling for the person and whether you’re a good match. Then give them all the information they need and allow them to prescribe the best treatment. Hopefully you and you’re business will be happy and healthy.
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This is MY article. My bio: Jeffrey Hauser, author of "Inside the Yellow Pages" available at amazon.com
or go to my website at http://www.poweradbook.com
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