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New Pricing Models for Personalized URLs

January 3, 2009 I've been doing a lot of writing about personalized URLs lately, so during the winter break, I decided to do some poking around to see how printers were pricing them. I found out some interesting information. 

Traditionally, there have been two pricing models — a basic "cost plus" mark-up strategy and an overall campaign pricing.

Typically (but not always), shops new to personalized URLs will use the cost-plus strategy to keep the prices low and encourage customers to try this strategy for the first time, while more experienced practitioners will place higher value on their experience and price on a campaign basis to reflect the value of their expertise in campaign development and strategy.

But recently, a new approach has emerged — results-based pricing. This model is just starting to take hold, but I'm hearing more and more about it. It's more common among marketing firms (as opposed to 1:1 printers / marketing services providers).

This is broken into two sub-categories:

• Response-based models. In these pricing models, the services provider assumes some of the risk by guaranteeing that the campaign will achieve a certain level of success. This might be the number of clicks, achieving a specified cost per lead or lift over previous campaigns, or generating a specified revenue per sale. The cost of the campaign may be tied to reaching the goal or it might increase based on the level to which it exceeds the client’s goals.
• Revenue-sharing models. More rarely, marketing firms have tied the cost of the campaign to the revenue the campaign generates. Revenue sharing might be set at 10% paid to the services provider, 25% paid to the services provider, or whatever level to which the parties agree. This is more straightforward than response-based pricing but assumes that the client and marketing partner are comfortable with the level of tracking and reporting provided by the client.

For more on personalized URLs, including a deeper discussion of pricing models, see "Personalized URLs: Beyond the Hype."

Have questions? Comments? I'd love to hear from you. You can email me at info@digitalprintingreports.com. For more information on primers for marketers and small businesses on digital, 1:1, Web-to-print, and personalized URL applications, visit Digital Printing Reports. You can also keep up with all of my posts on EBS, The Inspired Economist ("Greening Print Marketing"), and other blog sites by following me on Twitter.

Posted by Heidi Tolliver Nigro on January 3, 2009 | Comments (0)