Our new risk-reward model for online marketing services

In the near future I’ll be revising the service modules that we offer around blogging. Blogging is one part of the online marketing mix – an important part, but only part. The new services we will be offering will be to help people setup their business and market effectively online. We’re hiring, and have a specialist marketer joining our team (hi Kate!) next week. We also have additional freelancer relationships so we can bring critical marketing, technology and design skills to bear at just the right time. All of this so we can can help a small business clarify their online business strategy and online marketing plans, and get to execution very rapidly.

I hope to make it far easier for small business to try out a new style of online presence. Our small-business sites will create an opportunity to test and measure – quickly and without major upfront costs – new online marketing strategies and tools. We have invested a lot of time and energy into creating a fantastic platform for this purpose. It goes well beyond our initial offerings for small business blogging – this will still be included (of course!), but only be part of the offer.

When we launch these services, we are going to change our pricing and also the risk-reward mix. The price will go up, and for those clients who are midway through an offer process with us, pricing will remain at the existing rates.

The major change will be in the way we take out risk for our clients. Rather than require clients to pay for setup costs up front, we will divide the costs by 12 and charge a monthly fee for 12 months. If during that 12 months the client thinks the value isn’t there, they stop paying their monthly fee. Or they can take their site content elsewhere and stop paying our monthly fee. There is no contractual lock-in. And because we set people up online using widely used open-source tools, there is no technical lock-in.

No lock-in means if we develop a business strategy with a client AND setup the foundations of their business AND they leave us after three months, we forego 75% of our setup fee. Theoretically they could just put their site onto another host and keep executing their marketing strategies. Naturally I don’t want that to happen – ever. To avoid it happening, we will have to be good at explaining what we do so expectations are clear. And deliver results during the harder stage – execution. Of course we will only engage with clients where there is trust and clarity on both sides (and maybe some people won’t understand why we decline to offer services).

I personally believe the no lock-in approach sets a tough standard (and yes, we will never be Microsoft). But I also believe that the proliferation of open source means that before long online businesses like ours are going to have to be able to succeed in this type of environment, regardless. No choice. So I want to get there early.

I’m betting that clients will love our up front strategy ideas, but will value the execution even more. We’ve got a great set of services to work with and deliver results. After the first twelve months is up and the setup costs are out of the way, I hope to see our clients eager to get their latest online marketing initiatives off and running, because they can see the return on investment.

Transparency in our margins and pricing model is something I’ve already talked about, and now you know about our new risk-reward model. Bruising critique and robust suggestions of improvement very welcome.

One Response to “Our new risk-reward model for online marketing services”

  1. […] images quickly and without the cost of a web administrator. Our platform allows for this, thanks to OM4 – our online marketing business, which will be officially launched […]

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