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Marketing, Thought Leaders

How to Craft a Competitive Pricing Strategy

August 27, 2024

by Clutch Team

Katie Hollar, Vice President of Marketing at Clutch, sat down with Justin Rowe, Founder and CMO of Impactable, to discuss his shift from lead generation to LinkedIn ads, how tiered pricing attracts both startups and mature clients, and how integrating LinkedIn ads into a cohesive marketing strategy drives better results. 

Katie Hollar: I'm very excited to be here today with Justin Rowe, Founder and CMO of Impactable. Before we dive into our conversation, Justin, could you share your journey with Impactable and how you made a strategic pivot into focusing on LinkedIn advertising?

Justin Rowe: I came from the restaurant industry and discovered LinkedIn about six years ago. I took an aggressive approach to grow my network and find opportunities, accidentally creating a lead generation strategy and realizing LinkedIn’s power. I scaled a LinkedIn lead generation agency, which was acquired two and a half years ago by a data-heavy investor. I stayed on to run and pivot the business, shifting focus from lead generation to advertising. We evolved into a LinkedIn ads agency, which now accounts for 90% of our revenue.

Katie Hollar: You know, as a marketing leader, we're constantly having to reevaluate where we're investing and what the latest tactics are in terms of delivering results. You mentioned that pivot from lead generation to being broader and focusing more on advertising. So, tell me about what was changing in the market or what you were seeing from your clients that led to that decision to really focus more broadly on advertising throughout the buying journey? 

Justin Rowe: We started with lead generation because it seemed to be something everyone wanted. Offering a service tailored to that made sense. However, the clients drawn to lead generation had a short-term focus, making it difficult to maintain them long-term. They wanted fast results, and many were smaller companies looking to quickly grow their pipeline without a mature long-term view. We had a productized offer, but churn was high, and most of our revenue came from new sales rather than growing renewals.

To help clients get leads that converted into long-term revenue, we had to shift from a purely transactional approach to focusing on lead quality, not just quantity. We considered the channels, nurturing, and positioning ourselves as experts rather than just pursuing the cheapest leads. LinkedIn ads made sense for building trust and credibility, along with diversifying our portfolio with paid search and paid listings.

We lean on Clutch, paid search, LinkedIn quality traffic, retargeting, and programmatic ads in a full-funnel approach. By the time leads are ready, they know who you are, trust is built, and your sales team loves those leads. This mindset shift improved our offerings and client results.

Katie Hollar: Yeah, absolutely. I think you hear so many marketing thought leaders out there today saying this concept of an MQL and just lead for the sake is dead, right? And you have to really think about that. How have you thought about your pricing strategy and aligning that with the perceived value of your services for different clients? What methods are you using to understand the needs of different businesses at different maturity levels? 

Justin Rowe: Pricing strategy is interesting because there’s a wide range of approaches, from bite-sized, productized services to highly customizable, premium offerings. We had productized pricing and packaging in the past, but as we shifted towards demand generation, we began attracting more mature organizations, and our pricing adapted accordingly. As a scrappy startup, I don’t want to lose entry-level pricing options that attract smaller organizations or SMBs. Even among funded startups and mature companies, there’s still price sensitivity, so we offer entry points with minimal friction. For example, we have ads management starting at $899 a month, which attracts both small companies getting started and funded startups exploring LinkedIn ads before maturing. We build relationships from these entry points, growing them into long-term engagements.

We’ve figured out there are two groups: those who need fractional staffing or expertise, who have a clear strategy and assets but want support, and those needing more brand positioning and strategic oversight, requiring higher pricing. We’ve divided our offerings accordingly, giving clients a starting package that often evolves into a customized version beyond what’s listed on the website.

Katie Hollar: I love that example of larger clients still having a proof of concept entry point where they want to see what they can get. Regardless of the business’s needs, there’s a way to package that, show your value, and land and expand that account over time. You mentioned being a scrappy startup leader yourself. As your business grows and you expand more of those clients, there’s a balance in how much time you spend on bigger clients versus fueling new business at smaller packages. How do you think about that balance?

Justin Rowe: We go in waves, and one mentality I brought from the restaurant industry into B2B marketing is sliding to where is needed. For a while, incoming leads and signing new clients wasn’t an issue, but it was overloading our ops. We realized we were doing well with new business but weren’t maximizing opportunities with existing clients.

So, we paused new sales initiatives and focused on taking better care of current clients, maturing our process. This led to developing better systems and support for more mature clients, and we realized we fit better with larger clients needing fractional staff than smaller ones needing everything from us. Now, operations are more mature, clients notice the improvement, and we’re ready to ramp up new business. However, it’s a constant balancing act of keeping a pulse on both sides. We’ve learned that while new business is great, if it strains the operations team or affects client experience, it quickly becomes a priority to refocus on operations.

Katie Hollar: That’s a great insight and a unique challenge in the B2B service space compared to the content focused on B2B tech and SaaS models. This isn’t where you have full control over what you deliver to clients. With that in mind, how do you think about pricing strategy to stay competitive while considering profitability and margins? Have you had to make any pivots along the way?

Justin Rowe: Yeah, we've done a couple of things on that front. We did a pricing analysis and looked at competitors. One thing we realized, which is probably true for most industries, is that our entry-level offers have high pricing sensitivity, appealing to either startups just getting started or smaller startups with limited budgets but high expectations. If it’s $899, $599, or $1249, there’s a dramatic difference in interest and signups. Whereas with our top-tier clients, there’s a lot less price sensitivity. We could change the price by $1,000 or $1500 with almost no additional resistance.

At $500 or $1000 a month, there’s a lot of price sensitivity, but for higher-tier clients, the difference between $7500 or $9500 isn’t significant in their minds. We try to anchor entry-level offers as much as possible and have considered making them more affordable while ramping up the difference in premium offers. For mature clients using us for professional staffing, with complex needs across multiple geos, project management is more resource-intensive, and we’ve recalculated costs accordingly. Those clients are willing to pay if it meets their needs.

You can’t just roll out a universal price increase or decrease across all channels; you have to consider what segments are attracted to what offers and their price sensitivity. We’ve grown margins by keeping entry-level margins low and widening them as clients scale with us or buy in at higher levels, and that’s worked well.

Katie Hollar: It sounds like those package tiers are where you’ve landed in terms of placing people, and then that evolves. As you look across the competitive landscape, there are agencies paying an hourly rate, custom project scoping, and a percent of ad spend—lots of different models out there. How did you look across those offerings and decide, based on the competitive side, how to price and remain competitive?

Justin Rowe: Coming from a non-marketing and non-B2B background, I approach marketing like a newborn baby sometimes. I don’t have the mindset of “this is how we’ve always done it.” I was learning as I went and borrowed a lot of ideas from the B2C world. I believe B2C and e-commerce marketers are some of the savviest out there. When I entered B2B, I noticed a lack of focus on retargeting. For example, if you visit a site with $50 to $200 shoes, you’ll see ads for those shoes for months, but a B2B service costing $10,000 won’t retarget you at all. There were clear gaps. My approach was to see what we could learn from B2C, mature our marketing accordingly, and implement strategies that give the best value for our clients.

Katie Hollar: I love your experience coming from a restaurant background. This idea is kind of like a menu of options, making it easy to package what you’re getting. So many marketing buyers are just humans at the end of the day. To your point about the broader e-commerce landscape, you want to make that frictionless buying experience, and B2B has made it complex for buyers to figure out what they’re getting for the price.

Justin Rowe: I was frustrated as a founder looking at products and services. I would go to their website and pricing page, but there was either no pricing listed or it was really fuzzy or overly complex. One idea I had early on was allowing people to sign up for our B2B service directly on the website. You could look at our packages, click in, see a sales page with discounts for monthly commitments, and put a card on file to pay. It would trigger an intake form. It was highly productized, but it was a B2B service. We’ve come a long way from that, but I’ve kept elements of it because I want things to be easier for buyers who don’t want to jump through hoops to find pricing or sign up. As you grow and mature, you can’t make it like a McDonald’s menu, but there should be elements that make it easier to digest, understand, and work with someone than many companies do.

Katie Hollar: How is Impactable disrupting your industry as you look toward the end of this year and into 2025? Is there anything you’re particularly excited about as you look ahead?

Justin Rowe: There are a couple of ways we're disrupting things. First, we're rolling out our own LinkedIn toolset and technology, getting into the software space. We've partnered with the LinkedIn product and API team and have a LinkedIn ad scheduling tool and a LinkedIn audience tuning tool. Our main investor came from a series of data companies he's grown and sold.

But the biggest thing we're doing is viewing marketing as an ecosystem. Often, channels like paid search, listings, Google RB, LinkedIn, and email are siloed and don’t leverage each other. The e-commerce world does this well, but B2B doesn’t. These channels should be fluid, ebbing and flowing from each other. One thing we do well is showing how LinkedIn ads, while expensive in a silo, become powerful when part of a bigger ecosystem.

It’s not just a sales pitch—I firmly believe I can confidently bid or ramp up my Clutch listings and paid search traffic if I can qualify and convert that with LinkedIn ads. Showing B2B companies how the ecosystem improves marketing efficiency and reduces risk is a message I’m continuing to push.

Katie Hollar: Yeah, having that point of view, we are in a fragmented media environment, and people are spending time across different places. LinkedIn, from a professional context, is where I spend a lot of time, but it's not the only one. There are podcasts, search, and other places influencing me. That surround sound strategy is fantastic and really where I see the B2B industry going as well. I’m excited to see how you're taking part in that.

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