Pricing digital signage becomes much easier when you stop treating it as one product.
A customer deployment may include hardware, installation, software, configuration, support, content and ongoing management. Some create one-time project revenue and others recurring monthly revenue.
Start by Separating One-Time and Recurring Charges
One-time charges may include displays, media players, mounts, cabling, installation, site surveys, configuration, initial content setup, project management and training.
Recurring charges may include software, technical support, device monitoring, content management, content creation, account administration and managed services.
How Do Digital Signage Companies Make Money?
Price Hardware Based on Your Actual Cost
Acquisition cost is not necessarily complete cost.
Shipping, receiving, storage, handling, payment fees, damage risk, warranty administration and delivery may all affect the economics.
Don't Build the Entire Business Around Hardware Markup
Customers can compare hardware prices online.
The company also creates value through design, procurement, installation, configuration, testing, training and support.
Digital Signage Hardware vs. Software Revenue: Where Should You Make Your Money?
Charge for Installation as a Professional Service
Installation pricing should reflect labor, travel, equipment, difficult mounting conditions, cable runs, network coordination, site access and other project requirements.
Create a standard installation package for common deployments and identify conditions that require additional pricing.
Account for Site Surveys
A site survey may confirm display location, wall construction, power, network access, mounting, cable routes, viewing distance and installation access.
The labor should be reflected in the project price.
Don't Give Away Configuration Time
Account creation, users, permissions, player registration, location organization, initial content, playlists, schedules, testing and training are all part of delivery.
Decide How to Price Digital Signage Software
Customer pricing might be based on screens, players, locations, customers, service packages or a combination.
Understand your software cost, included features, support obligations and how costs change as deployments grow.
Digital Signage CMS Explained: What Resellers and Integrators Need to Know
Define What Support Includes
Clarify remote software support, on-site service, replacement hardware, network troubleshooting, custom content and additional training.
Defined boundaries make the service easier to price.
Price Content Management Around Workload
Number of locations, screens, monthly changes, turnaround time, campaigns and approval processes can all affect workload.
Price Content Creation Separately When Appropriate
Creative work may be priced by project, asset, hour or monthly package.
Avoid undefined promises of unlimited creative work for a fixed fee.
Build Service Packages
Packages can combine software, support, monitoring, content updates and creative services into levels appropriate to customer needs.
How to Create Digital Signage Service Packages for Your Customers
Keep Hardware and Services Understandable in the Proposal
A proposal can group equipment, deployment and monthly service while internal calculations remain more detailed.
Know Your Cost Before Setting Your Margin
Understand software, support labor, content labor, payment processing and other direct costs before deciding the customer price.
Calculate Gross Margin, Not Just Markup
If an item costs $100 and sells for $125, the markup is 25%, but the gross margin is 20%.
Markup = Gross Profit ÷ Cost
Gross Margin = Gross Profit ÷ Revenue
Include Sales and Administrative Costs in the Larger Business Model
Sales, marketing, insurance, accounting, office expenses, vehicles, tools and management still need to be supported by the business.
Use Upfront Payments to Manage Hardware Cash Flow
Deposits or milestone payments can reduce the amount of capital required to finance customer equipment.
Create Standard Pricing Where It Makes Sense
Standard prices for common players, installation, configuration, software, support and content packages can speed proposals and reduce inconsistency.
Don't Price Every Customer From Scratch
Repeatable packages make sales, approvals, billing and margin monitoring easier.
How to Build and Scale a Digital Signage Reseller Business
Review Pricing as Costs Change
Review actual labor, software expense, support usage, content workload, hardware margins, fees and account-management time.
Don't Underprice Recurring Services Just to Win the Installation
The installation happens once. Monthly service may continue for years.
Treat the ongoing relationship as its own business.
How to Build Recurring Revenue With Digital Signage
Price for Account Growth
Your framework should make it straightforward to price additional screens, locations, users and services.
Pricing Should Match Your Position in the Market
A provider selling software with minimal service is different from a managed provider delivering installation, monitoring, content and support.
The mistake is charging for one model while delivering another.
Build Pricing From the Bottom Up
- Define what the customer receives.
- Separate one-time and recurring services.
- Calculate direct costs.
- Account for labor.
- Decide on the required gross margin.
- Create standard packages.
- Establish payment terms.
- Measure actual costs.
- Adjust future pricing from real operating data.
Zoney provides the underlying digital signage technology for resellers, integrators and service providers that want to build their own customer offerings around the platform.
Continue with How to Build Recurring Revenue With Digital Signage, or start a free Zoney trial or schedule a partner call.