Welcome back! This week, we chat with Emeric Ernoult of AgoraPulse about how best to offer world-class social media services – with huge margins.
About Emeric Ernoult…
In short, Emeric is founder and CEO of AgoraPulse, one of the leading social media management platforms that is defining the future of Social Media Management. Among their users, such names as Ogilvy, Digital Butter, West Virginia University, and more.
A self-confessed kitesurfing addict, Emeric also enjoys global jaunts in his camper van!
Points of Interest…
- Client expectation around Social Media Services 1:29
- When to offer Social Media Services to clients 6:10
- Creating Value in your Social Media Services 7:16
- Pricing and Margins around Social Media Services 12:41
- Sourcing Content for Social Media Services 16:33
Client Expectation Around Social Media Services
Recently, at the AgoraPulse summit, Emeric highlighted his commitment to supporting agencies through creating community, education, plus resources. So, as part of the impetus for this episode, we’re unpacking what it means to offer great social services, while making it viable from a business perspective.
Arguably, there’s a perception within the industry that this is one of those services that’s commoditized, there’s not enough margin in it, etc. However, Emeric and his team have excelled in this space. Therefore, I ask him to outline the basics regarding client expectations when purchasing social media services. What is a compelling social media offering as an agency? How can it become a value offering for clients?
“The first thing I would say is that one should never assume what the client wants, and what is valuable to the client. The first mistake I see from agencies getting into managing social media for clients is that they never had a real conversation about the value. For me, it all starts there. And it’s not only for agencies, it’s for everyone, every business.”
The number one question Emeric asks prospective clients who are thinking of delegating their Social Media Management to an agency is: “How are you going to measure success?” Ensure that understanding is crystal clear between you and the client. Don’t assume that you just need to crank out content, empty that social inbox, and spit out reports at the end of the month.
Secondly: “Are you under-pricing?” When people start offering services, they under-price. The consequence of this is either obtaining the wrong clients and/or clients who don’t value what you do. ***Emeric delves into this more from 4:57***
When to Offer Social Media Services to a Client
Who is a good candidate for adding social media services to their agency? Let’s face it, it’s an easy thing to create recurring revenue off, especially for project-based agencies. For example, perhaps your agency builds websites; you have created the platform for the client whereby they now have an audience they should really be engaging with…
So, I ask Emeric how an agency can evaluate a client before installing social media services as a process…
“As long as you’re doing marketing for your clients, you should have an idea of what social media can do, or cannot do, for them. You should be clear on how social media can be added to the spectrum of services that you offer those clients as, as a marketing agency or as a digital agency. Being a digital marketing agency without including social media in the process is not a good idea.”
The last thing you should do is deter clients from social media. Firstly, it’s very hard to deny its existence and secondly, you’re denying yourselves an additional service offering. In saying that, you should always prep your client regarding engagement and reach on social media; hardly anything (if anything) you post will “go viral”.
Side note: our Agency Profit Toolkit is a one stop shop for you to be able to outline some of these crucial profitability numbers to a potential buyer. Spreadsheets, templates and training videos, you name it, it’s all in the toolkit. Grab yours free at the link below:
Creating Value in Your Social Media Services
As for striking the balance between the notions of “you must have social media” and “don’t expect stratospheric engagement”? Best pitch it as a portal/shop window to your sophisticated website, landing pages rife with optimized content, nurturing campaigns, and so on.
For example, Emeric has a ‘Forget About It’ (“we’ll make sure you don’t look stupid on social media”) package. Basically, he’s packaging “peace of mind”, which is priceless. So, despite it being seemingly basic in nature, under-price this package at your peril!
If ‘Selling Social Media Peace of Mind’ is the first rung of our Creating Value ladder, the second rung has to be ‘Setting Goals That will Impact the Bottom Line.’ For example, let’s assume our hypothetical client operates in a visual industry – be it food, fashion, jewelry, art, tourism; when such industries post to Instagram or Pinterest – people get excited. Why? Because it’s positive. So, now the question is, how can you add to that? By ensuring you can impact their bottom line.
“The goals can not only be a number of pieces of content every month, or increased engagement, views or whatever. Those are nice, ‘n all, but if you only give your clients social media ‘vanity’ metrics, you’re going to end up in a bad place at some point.”
In which case, your client could believe they can revert to in-house, or go with another “cheaper” agency. However, if you can show – i.e. devise a mechanic that translates social media results into business results, that’s a whole lot of value creation.
Pricing and Margins Around Social Media Services
What kind of pricing and margins is Emeric and his team at AgoraPulse seeing social media agencies get? Furthermore, where does he see people pulling away from the crowd and getting above-average pricing and/or above-average margins? Most importantly; what are those agencies doing differently that we should know about?!
“Let’s start with the bad stuff – the stuff you should NOT do! I’m seeing people who come to us and say, ‘I can’t afford your tool because my clients are paying me $49 a month to manage their social media.’ So that is a NO situation; you cannot be charging 49, or 99, or 199, or anything like that… that is cheap product pricing, it’s not service pricing. If you’re doing that, your clients see absolutely no value into what you do.”
In short, the agencies Emeric sees excelling in this space charge a starting cost of $1k per month, per client, for social media services. As for how many clients a month realistically you – as a solo operation – can manage before you need to hire an additional person? If you’re covering online and social media, your maximum capacity – as a solo operation – is in the region of five clients a month.
Beyond that, you’ll need to start hiring employees to delegate increased work to. You need margin into that first employee. By the time you require the second employee, you gotta be making at least 15 to 20,000 a month. That’s the bare minimum for the business to four years.
***Emeric does a deep dive into further figures from 14:56***
Sourcing Content for Social Media Services
Here’s the tricky question. Where does the content come from?! Obviously, in a perfect world, the agency would have complete control over that; they can ensure that the quality of the content is good, it’s aligned to the strategy, etc. However, there’s going to be a wide spectrum here of where the content is coming from. How much of it will be the client’s responsibility?
Therefore, I ask Emeric for any hot tips on how to think about that, plus how best to adjust your strategy based on how involved your client wants/needs to be in the production of the content itself…
“I don’t think there’s a one size fits all answer to who should own content… there will be moments in business where they don’t have the resources, they don’t have time or bandwidth, so they will outsource the whole thing to the agency. And the agency will do a great job at that… The advantage of an agency is that they will always be in the business of service doing, providing amazing marketing service or digital service to their clients. That’s not the case for businesses!”
OK, so there’s no set recipe when it comes to taking ownership over the content creation, as it varies client-by-client and over time. What Emeric can tell us, however, is that when an agency has the right talent, they can bring a lot of value to the table.
***Myself and Emeric discuss some ‘red flags’ and ‘snackable bites’ for this scope of work from 18:22***
Key Takeaway…
Every single time a business creates an amazing piece of content, you as an agency can deploy it, and market it for months – getting amazing results that are trackable. That right there is real ROI you can prove.
Additionally, Emeric is launching a Beta ROI Attribution Tool for Social Media and he would love to get Beta testers and agencies involved because they are the main target for such a tool! So, seek out Emeric via LinkedIn and he will put you in the beta, and work alongside you to see how you can create amazing value for your agency as well.
Want to see more from Emeric?
- Twitter @eernoult
- LinkedIn @ernoult
- AgoraPulse
Did you learn anything new from this episode? Let us know in the comments below! We have a bunch of helpful blogs designed to bolster your agency profitability, such as How To Calculate Your Billable Employee Cost-Per-Hour.
Our next installment of #APP, on November 3rd, will see us chat with Robin Waite. Our previous blog with Christian Banach is here…
Agency Profitability Tool Kit
If you’re looking for more resources to help you improve your agency’s profitability, check out the Agency Profitability Tool Kit. It’s full of templates and checklists used when consulting clients. This helps them improve profitability by over 100% in under 60 days.
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