Question

Topic: SEO/SEM

Pricing Model For Sem

Posted by Anonymous on 1/5/2011 at 6:40 PM ET 250 Points
I know you can bill by hour or by percentage but I need to know a really good model for charging clients for search and display marketing campaigns and services. Does anyone have one that works or that can be recommended?
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  • Posted on 1/5/2011 at 8:07 PM Accepted
    How about charging by the project?

    You determine what the client needs and what it's worth to them. Then you figure out if you're willing to do the project for a price that's less than what it's worth to the client. If no, you pass. If yes, then you propose a fixed fee and share the rationale with the client.

    If you're really good and fast, you make more. If you're slow or inefficient, you make less (per day/per hour). The client knows what the deliverable is and what it's going to cost them. No surprises.

    When you do this, you quickly begin to realize the importance of thinking through the project and the work plan before you bid the job and submit your proposal.
  • Posted by excellira on 1/5/2011 at 9:19 PM Accepted
    Here is one model:

    1. Establish setup fee
    2. Establish monthly fee
    3. Establish fee based on monthly ad spend and charge the larger of #2 or #3

    In addition to spend, base fee(s) on the number of keywords managed.
  • Posted on 1/6/2011 at 1:54 AM Author
    Excellira, that really is my question. How best to establish the monthly fee or optionally the fee based on monthly ad spend. Do you do it on perceived time needed (based on project estimates for time requirements), or do a percentage that changes based on the amount of the media spend?
  • Posted by excellira on 1/6/2011 at 10:39 AM Member
    Ultimately it comes down to hours. I think you'll have to look at your typical engagement and base it on that. Most of us in the search community work with a specific client size and perhaps vertical so you should have a sense of what will be required. Fortune 1000 has different requirements than Main St.

    Also take a look at what your direct & true competitors are offering.

    Whatever you do your first few clients will be a test and without a doubt you'll make adjustments based on your experiences. If you have small clients then personally I'd be less focused on making profits on the first client or two and focus more on your process and pricing model. That last bit is probably bad advice if you're working with large clients. :-)

    Does this help?
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