A lot of potential clients ask us: How do you price your search engine optimization (SEO) services?
There are two ways to price SEO. You can price it based on how much it costs the SEO company to fulfill, or based on the value the service provides to the client.
Model #1: Cost-Based Pricing
The first and the most common is the cost-based pricing model.
This pricing model asks, “How much does it cost to gain rankings in terms of time and effort for the SEO company?”
Specifically, how much time does it take to perform keyword research, edit the website and optimize pages for search engines, and build links to the site?
There is an initial cost to doing one-time work such as keyword research and website editing (on-page optimization), but the biggest on-going cost is for link-building.
Incoming links are the #1 factor Google looks at when determining which website to rank over another. And the strength of your competition will determine how many links you need to build. If you’ve never invested in SEO, your competitors will have more links than you, and you’ll have to play catch up.
Cost-based pricing is a pretty straightforward way to bill for SEO services. If you research SEO pricing on the internet, you’ll likely find a lot of companies who are charging fees this way.
The problem with the cost model, in our view, is that all of the focus is on the SEO company rather than on the client.
For example, if the SEO company has a lot of overhead, they’ll charge steep fees so they can make the campaign profitable for them– even if it’s not a smart investment for the client.
Or, on the other end of the spectrum, some SEO companies charge super low fees. The low prices may seem attractive, but these companies may not be providing much value. And as a result, the “cheap” SEO investment may not be a very smart investment. (In SEO as in other areas of business and life, you typically get what you pay for).
We take a different approach.
Model #2: Value-Based Pricing
We take a more customized approach that’s focused on our client’s return on investment (ROI) and reflects the value we’re providing to the client’s business.
In our view, SEO should be a long-term investment to be managed profitably, rather than an expense to be minimized. Done right, SEO is one of the most profitable marketing channels you can use – but it has to be priced according to your potential ROI.
Here’s the process that we use to create SEO proposals with a focus on your ROI.
1. Demand for Your Services Online
First, we look at your demand by performing keyword research. How many people are searching for the services that you offer? Is it 1,000 a month? Is it 10,000 a month?
2. Competitive Analysis
How strong is your competition? What kind of resources do we think we’d need to invest in order to out-rank them? How long might it take? Do we project we could gain a #10 position in 3 months? Or a #5 position in 6 months? Or a #1 position in 4 months? Again, most of this depends on the strength of your competition (specifically, their incoming link profile).
3. Traffic Projection
We look at the keyword search volume and the strength of your competition to project how much traffic (website visitors) we can expect to deliver in a reasonable timeframe. For example, the #1 position in Google typically receives about 40% of clicks. So, if we are targeting a keyword that is searched 1,000/month, and we gained the #1 spot, that’d deliver approximately 400 clicks/month.
4. Click-to-Lead Conversion Rate
The next step is to project how many clicks would turn into leads. By leads, we mean incoming phone calls and emails. This number can vary from as low as 2% up to 20% or higher depending on the lead generation mechanisms you have on your website.
(Related blog post: Online Lead Generation Tips).
5. Lead-to-Sale Conversion Rate
Next, how many leads turn into customers for you? This number may range from 1 out of 10 to 3 out of 10 or higher depending on the effectiveness of your sales processes.
6. Customer Value
Finally, what’s a new customer worth to the business — $250, $500, $1,000, a few thousand dollars?
We take all of those factors together: demand, competition, traffic projection, lead conversion rate, sale conversion rate, and customer value to create a return on investment model – and we price our services accordingly.
Too many SEO firms just focus on rankings, but they don’t actually focus on growing your business. The reality is that top rankings won’t make you any money if you can’t turn those clicks into paying customers. The ROI model works well for us and our clients because it keeps our focus on getting you new customers.
And to maximize your ROI, we go beyond SEO. We can track your incoming phone calls. We can install email marketing and customer relationship management (CRM) programs to improve your lead generation and lead management. We can also advise you on your incoming phone handling and sales processes.
Contact Us for a Free Return on Investment Analysis
If you’d like a free SEO return on investment estimate, contact us.
Doing It Yourself?
If you’re managing your own search engine optimization, you may be interested in our do-it-yourself local SEO course, The Local SEO Formula.
If you’d like to learn more, watch this free video which reveals the 5 steps to rank #1 in Google’s local results.
Main Street ROI is a digital marketing agency based in New York City.
Our mission is to help small businesses thrive. With our services and training, we help small businesses succeed with marketing regardless of their budgets.
Since 2010, we’ve helped thousands of small businesses create profitable digital marketing campaigns.
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