Let's face it, budgeting for an explainer video can be a daunting task. For SaaS founders and marketing execs, it's not just about the price tag—it's about understanding the value and making sure every dollar spent contributes to growth. Here's how to navigate the budgeting process effectively.

#1 - Understanding the Costs
First, let’s break down the costs you might encounter:
Template-Based Solutions: These can range from $50 to $500. They’re budget-friendly but might not offer the customization your SaaS product needs.
Freelancers: Hiring a freelancer can cost between $1,000 and $3,000. This option offers more personalization, but quality can vary.
Small to Medium-Sized Agencies: Expect to pay $3,000 to $8,000. Agencies provide a balance of expertise and quality, ensuring your video aligns with your brand.
Large Agencies: These come with a premium price tag of $8,000 to $20,000+ but guarantee top-tier production and strategy.
#2 - Evaluating ROI
When thinking about costs, consider the return on investment (ROI). A well-crafted explainer video can boost your Annual Recurring Revenue (ARR), enhance customer onboarding, and drive conversions. To make an informed decision, align the investment with your business goals.
However, here’s a more pertinent question: "How much should it cost?" This perspective helps you align your investment with your business goals, ensuring you get the most value.
#3 - Introducing the Golden 1% Principle
Now, let’s shift the focus to how much you should invest. Introducing the Golden 1% Principle: If you're aiming to increase your Annual Recurring Revenue (ARR) by a certain amount, invest 1% of that increase into creating your explainer video.
#4 - Aligning Budget with Goals
Let’s apply the Golden 1% Principle. If your goal is to boost ARR by $500,000, investing 1% of that increase ($5,000) into your explainer video is a strategic move. This approach ensures that the cost aligns with the potential value you’ll gain.
#5 - Making the Right Choice
With your budget in mind, choose the option that best fits your needs:
For startups with tight budgets, a freelancer or template-based solution might be the way to go.
For established companies seeking a balance of quality and cost, small to medium-sized agencies are ideal.
Large agencies are best for those seeking comprehensive strategies and high-quality production.
#6 - Maximizing Value
Regardless of your budget, focus on maximizing value. Here are a few tips:
Clear Messaging: Ensure your video communicates your value proposition effectively.
Engaging Content: Keep the viewer hooked with engaging visuals and a compelling story.
Professional Quality: Invest in good animation, voice over, and editing to make a lasting impression.
Conclusion
Budgeting for an explainer video doesn’t have to be overwhelming. By asking "How much should it cost?" and applying the Golden 1% Principle, you can make a smart investment that drives growth. It’s not just about how much you spend, but how well the video serves your business objectives.
Ready to elevate your SaaS company with a powerful explainer video?
Let's make it happen!
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