Question

Topic: SEO/SEM

Best Pricing Model For Seo Services

Posted by Anonymous on 12/5/2010 at 5:06 PM ET 500 Points
My dear friends it has been a while since I've been active in our wonderful community and I miss the action :) . This was primarily due to setting up a Web Development outfit with an emphasis on SEO for launch at the start of next year. During the course of finding talented team members and numerous iterations of the business plan I've come across a conundrum . I would like to know your thoughts on pricing structures for SEO services . More specifically your thoughts on upfront fees,monthly retainers, PPA models, Revenue / Profit Sharing models etc. I've come up with pricing as a % of estimated resources to achieve specific achieve goals . This model is shallow since the success of goals are primarily dictated by a 3rd party particularly the engines and at best the cost of resources required is an educated guess but at the moment this is the best I can come up with. A penny for you thoughts?

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RESPONSES

  • Posted on 12/5/2010 at 5:56 PM Accepted
    I would price this as a project fee for specific services rendered. Let them know exactly what you will do (i.e., the deliverables) and quote a fixed fee for those deliverables. If the client wants ongoing services, quote a monthly retainer amount with deliverables and terms.

    If there's a situation where the client only wants to pay for performance, you can consider it, but make sure you have the necessary control over all the factors that will impact your performance metrics.
  • Posted on 12/6/2010 at 3:21 AM Author
    @ mgoodman : Thank you .Your insight is always held in the highest regard. The logic to charge by deliverables is sound albeit still a scary proposition . Due primarily to the fact that the online strategies we are adept at are based on current best practices reliant on the ever changing whims and the algorithm fluxes of the major engines. If I were to write a SEO contract/proposal to lessen our liabilities this would be a tougher sell and definitely affect the pitch . I think I solved this by having our insurance company cover for errors and omissions and stopped our lawyers from reviewing our contracts(they are clueless IMO). Another tricky problem is that real effective SEO is a long term process and you only should stop your SEO when you shut down your site but I guess I should look at contract duration to address this worry.
  • Posted on 12/6/2010 at 3:41 AM Author
    @stlubahn: Thanks for the input but I really feel 100-500 a month does not give justice to the benefits of a good SEO campaign . My problem with people who charge a flat rate without understanding the landscape (ex keyword effectiveness, competition) are doing their clients a disservice and set themselves up for failure . Imagine this, how can a 500/month budget be effective against several players who have at least 5,000/month SEO budgets as a specific example for the addiction treatment center industry(we have a client in this field). I'd hire that SEO right away if he can pull out decent converting traffic but in all likelihood they will fail to live up to their pitch.
  • Posted on 12/6/2010 at 3:50 AM Author
    @Sans Prix : B2B mostly clients from our printing businesses. We had to set up the SEO company based on the decent amount of requests and the success of a couple of campaigns.
  • Posted by excellira on 12/6/2010 at 8:58 PM Accepted
    The solution is subjective.

    If you're working with larger clients you'll have a different pricing model than with SMB or sole proprietors. You'll also find differences in the verticals you are serving.

    If you're running a lower-cost production-oriented service you'll need to create a menu of packages to streamline your proposal process. If you are operating a boutique agency or as a true consultancy, you'll find that you'll need to evaluate each client individually and create a unique solution for their needs.

    It's a painful, iterative process and you'll never get it right (at least I haven't :-) but keep working at it and it will improve with each iteration.

    So, my answer is it depends on you, your interests, core competencies, your target audience, their expectations, their budget, and tolerance for risk.
  • Posted on 12/7/2010 at 1:13 AM Author
    @Excellira : Greg you do know I am posting this question to get you out of hibernation right ? Just kidding my friend... Hope you are doing well Drupal master . I'm glad you understand my dilemma and your insight is keen as expected. Although I might publish flat prices for SMBs which are about 80% of our inherited client base but I'll have to give that more thought or expound on that based on resources applied as recommended by mgoodman. It is unfortunate that flat rate pricing is the language most SMBs or sole-props understand well. As Sans Prix also suggested we shouldn't limit ourselves to one pricing model . I really like "tolerance for risk" as a pricing factor ; an erudite commentary.
  • Posted on 12/7/2010 at 7:53 AM Accepted
    FWIW, when I serve SMBs I find that they actually PREFER a fixed monthly fee because they then know what and how to budget. When I suggest a variable pricing approach, they respond by saying, "Just give me a firm price that you can live with."

    The one requirement if you go this way: You MUST remind them of the benefit and the reason they need you on a regular basis. Their memories are short, and they sign a check for you every month, so every invoice needs to re-sell the project. Otherwise they feel like they have to make the purchase decision again every month, and that gets old fast ... especially on projects that don't provide immediate gratification.
  • Posted by excellira on 12/7/2010 at 10:33 AM Accepted
    The key to a fixed-price arrangement is to set client expectations correctly before they engage you. What happens frequently is that SEO is often front-loaded. The client doesn't see all the effort you put in but they do see that you aren't putting as much time in on the tail end and won't want to pay for it.

    If you set expectations up-front they'll understand that you're essentially financing them to avoid the invoice shock they'd receive if they paid hourly up-front. You're making the service more accessible to them.
  • Posted by excellira on 12/7/2010 at 10:40 AM Accepted
    The key to all of this is to establish a pricing model that enables clients to access much needed services, closes deals that are a good fit for you and that you and the client can profit from.

    If that is hourly, retainer-based or otherwise, then so be it.

    Just like the web, you'll need to do a lot of testing. ;-)

    Since this is a new venture for you my suggestion would be to limit the number of clients you take on. Since you have another business you can rely on that income. Start with one SEO client and learn from the experience.

    If I could do it again, I wouldn't have taken on my first client. It was a successful engagement from their perspective, traffic went up ~1,500%, but they were a roadblock that hindered progress. Traffic should have gone up 15,000%. It was frustrating but I learned a lot about who I should be engaging with and under what terms and conditions.

    Performance-based models are difficult for this very reason. You don't have complete control over their business so you don't know all they ways they could be inadvertently sabotaging you.
  • Posted on 12/7/2010 at 6:21 PM Author
    Greg and Michael thank very much for the wisdom imparted. I have a formula in mind based on your recommendations. I'll touch base with you when I launch the new site . Greg when you get a chance shoot me an email so we can chat I'd like to share my Joomla horror story and let you say "I told you so". But I'm still sticking with Joomla and WP. :)
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