Feed management… it’s just a bunch of data crunching, right? So why is it so expensive? One of the first things you learn in any business is that you’ve got to be willing to pay what it costs to get quality service, that you can’t cut corners, that your customers deserve better than that. But is that really where your money is going when you shell out for high-priced data management?

In short, the question we always ask when paying for anything is: should it be this expensive?

Here’s what you’re paying for when you pay for feed management:

Feed Management

Duh, right? The software, the hardware, the professionals who put in the elbow grease, they don’t come free. This is the part that most of us are happy to pay for because if we tried to do it ourselves, it would take a lot of time out of our day and ultimately cost us money in the long run. The money that you put into the actual nuts and bolts of feed management goes towards data hosting, processing, etc. The technology is getting more efficient every day, but feed management still consumes resources. The hosting bills alone can really rack up for the bigger clients.

Marketing

Marketing can be costly, and it can be costlier depending on your product or service. Analytics software can help you to pinpoint the average cost of recruiting a new customer. It might be lower than you expect, but the customer acquisition cost probably won’t be zero dollars and zero cents per purchase. In feed management, we’re talking about a field that some people study for years and still don’t fully understand. It’s technical, it’s detail-intensive, and it’s not enough to simply put a few banner ads out there. Feed management companies have to ensure that the customer understands the basic principles of what the job consists of in order to make an informed decision. In other words, marketing costs in the feed management field are more like education costs, and education doesn’t come cheap. Look: you wouldn’t be reading this if someone hadn’t paid for the webspace to host it, right?

Commissions

If you’re looking at your feed management costs and trying to figure out where the bloat is, it’s right here, you found it. Agencies and technical providers are paid an affiliation commission for every customer that they provide to a feed management company, and the feed management companies raise their rates in order to cover the commissions. In other words, the extra money that you’re paying for feed management isn’t even going to the people doing your feed management for you. In theory, you could save money by going to a company that doesn’t pay commissions, and just give them a big tip every time they send an invoice. There’s nothing wrong with the basic idea of agencies, but some agencies like to really get their hooks into their prospects, milking them for every last penny and driving up that number on the invoice.

So now you’ve got a basic idea of where your money is going when you pay that invoice. If you want to account for every penny, you can go ahead and study up on the technical process of feed management, but if you don’t have time for that, it’s not a bad idea for anyone, in any field, to get a basic understanding of what they’re buying when they’re buying what their business needs.