The finish line is in sight.
You found a potential client, had the initial discovery meeting to discuss goals and pain points, walked through your value proposition, and built a solid relationship. At this point, the client has bought into your approach to SEO and wants to know one last thing.
Pricing an SEO engagement is actually quite nuanced and can be difficult for consultants and agencies alike. It’s different than pricing web development, pay-per-click advertising, design, PR services, etc., primarily because there are a handful of ways to price your services.
This post will outline the most common ways to price SEO and give you enough of a framework around each option to determine which is best for you. You may want to offer all of these options in some capacity, but there will typically be a best fit determined by your internal structure and the scope of the engagement.
To determine price, we first study costs
Before pricing your SEO offering, it’s important to understand some of the costs you’ll most likely have to undertake.
Technology
Do you plan on utilizing any outside tools or platforms? Whether it’s for auditing, crawling sites, or assisting with reporting, most SEO tools come at a cost.
Example SEO technology costs:
Content Creation
As you’ve heard a million times by now, content creation is a crucial element of a successful SEO campaign. In fact, it may be the most expensive consideration outside of employees’ salaries. Content will vary in cost depending on type and context (e.g., blogs, whitepapers, videos, case studies).
Take a look at The Content Factory’s take on the varying costs of web content. They price an “SEO blog post” anywhere from $80 to $950 depending on the length and how many are being ordered at a time. It’s safe to say that most of your blogging content will fall into that range.
Sales Material Development and Maintenance
The upfront cost here is larger than maintenance, but it’s important to consider nonetheless. Do you have proposal templates to build? The best proposals may require a designer. Case studies to show potential clients? Those may require a hard cost to produce as well.
Staff Hours
In most cases, your staff will be the most expensive element of your SEO offering. When considering staffing costs, think about how much time your staff is spending on reoccurring tasks including: monthly reporting, client calls, ad hoc questions, and monthly/quarterly strategy sessions.
Beyond those generic examples, there are many things your staff can spend time on – consider those as well. Can your staff create content in-house? Perform outreach around that content? Build local citations for clients? The list can be long.
Continuing Education
As cliché as it sounds, SEO is an always changing industry that requires active learning from its experts. Sure, you’ll learn the most from on-the-job testing and experiences, but conferences are also a great way to stay recent. Webinars are another, cheaper, option.
Example industry conferences:
Now, a logical next step towards pricing your SEO offering would be to add up your hard and soft costs, add in a hefty margin, then go nuts! However, this approach forgets that your hard and soft costs don’t mean anything to your customers.
They don’t care that you pay your SEO Specialist a salary of $35,000 and your subscription to Moz costs $149 each month. What they care about is the market price (in their industry/location) for SEO services and your ability to show value within a small range of that cost. If you’re slightly more expensive, that’s fine, but your perceived value should be higher as well.
In fact, if you stop reading here and only take away one thing, it should be this: your cost to “do all the SEO stuff” is irrelevant to your customer. Your ability to show superior value (ROI) at market price, on the other hand, is everything.
So what is the market price for your client?
Take the time to do your research here. It seems obvious, but this is an incredibly important part of the process. Competition and scope are two main considerations here.
Competition
Look at your competitors and understand their value proposition and price. Are they offering a similar scope within a similar industry? Looking at their pricing structure will give you a good idea of what people are willing to pay.
Scope
Understand how the scope of your offering may differ by industry as well. The scope of SEO for a coffee shop with 10 pages on their site and a local listings problem will be much different than an e-commerce retailer that sells nationwide.
Pro tip: isolate your scope by asking yourself, “What do I have to do to make an impact for Client X?”
Throughout this process, don’t lose sight of your margins. But remember – the market price isn’t negotiable.
You can’t have a cost structure that is inappropriate for the market and their willingness to pay. Simply, your pricing will need to be based on market.
At this point, you understand the market price for the client you’re pitching. You also know the scope of the engagement/project (remember – scope is what you need to do to make an impact). Now it’s time to decide which pricing model best fits your situation.
There are multiple ways to approach your SEO pricing
One-time Project
Sometimes the scope of an SEO engagement is limited. A client wants to transfer sites, for example, but they’re afraid of it affecting their organic traffic. They don’t want to or can’t pay for ongoing services, so you offer them a project rate.
The price of an SEO project can vary greatly depending on scope. Remember, when considering scope, you must think through how much time and which resources you’ll need to make an impact.
When pricing one-time projects, you’ll consider your scope costs more so than where the competition is priced. Since the project is not bringing in on-going revenue for your business, you have to be particularly sure that it will be profitable.
Example SEO projects:
$150,000 – Comprehensive technical audit for enterprise e-commerce site with 500,000+ pages
$50,000 – Competitive analysis for a national brand’s top 5 organic competitors including actionable insights
$2,500 – Link building, including research and outreach, for 500 contacts
$500 – Local listings audit and cleanup of top 30 citations for a car dealership
$300 – Keyword research for a dentist
Hourly
Does your engagement require task oriented, regular work? Do you or the client need the flexibility to change budget or requirements month over month? Maybe an hourly pricing approach is the best fit.
You can determine your hourly rate in the same way a lawyer would – look at your salary (or the salary of your SEO Specialist, depending on who is doing the work), add in any overhead (the extra costs we discussed above), bake in a profit margin (40%, perhaps, but really as high as possible), then divide by the number of workable hours in the year.
We can consider 2,087 the number of total workable hours in a year. Then, consider days off. Do your employees receive 2-weeks vacation? What’s your holiday schedule look like? Maybe your workable hours in a year calculation becomes 1,700.
Also, be mindful of who will be working on the campaign. When multiple people work an hourly project, you will want to use the weighted average hourly rate to compute your markup and final price.
Example: Megan is the SEO you want to put on the engagement. You pay Megan $40,000 a year plus benefits (about 20%, totaling $8,000) and your overhead is about $15,000. Combining those brings you to $63,000. Multiply this by your profit margin of 40% and add to the total cost: 40% of $63,000 = $25,200; $63,000 + $25,200 = $88,200. You’ve determined that Megan will work about 1,700 hours in a year, so divide your $88,200 by 1,700 to get an hourly rate of $51.88. Now, consider the market and decide if $50/hour is too low, too high, or just right.
So you’ve determined your SEO Specialist’s hourly rate and you’ve adjusted it to speak to the marketplace. Now what?
Now it’s time to look at the scope of the engagement and determine how many hours it will take each month to make an impact. Remember, it won’t benefit you in the long term to agree to a 5-hour/month engagement if those 5 hours won’t produce results for your client. Spend some time discovering the correct scope for the engagement, and then apply your hourly rate.
Retainer
Does your client need (or are they looking for) an agency that can be an extension of their team? Is the scope unlimited in terms of an evolving strategy over time? Is there a set budget each month or year that they want to adhere to? All of these situations typically point towards a retainer pricing model.
Similar to an hourly pricing model, retainers need to consider the scope of an engagement. How many hours are required to make an impact? If you start there, you can determine an approximate number of hours you’ll need each month and then apply your hourly pricing in a way that best suits the engagement.
While retainers don’t necessarily require you to track your time, you should be prepared to have a fairly detailed record of where time was spent if necessary.
Retainers are also typically used when an individual person is the right solution for the client’s need. Sure, there could be a mixed basket of people (1 junior level, 2 senior, etc.), but it’s typically the case that there is one person for the job. Further, that one person is typically either in a higher-level position or a technician of some sort (e.g., expert link builder).
In a retainer situation, be prepared to feel like you’re “on call” when the client needs you. On the client’s side, that’s typically a benefit to this model. You’re an extension to their team and as such, there will be an expectation that you’re able to provide a lot of soft time towards the engagement.
Packages
Do you provide SEO services for an industry that is accustomed to seeing packages? Is your agency looking to rapidly scale within a specific vertical? Maybe the best approach is to create easy-to-digest packages that clients can choose from.
Bundling together goods can make people feel like they’re getting your goods at a premium. “Wow, this package really has everything I need in it and it seems like an affordable price. Where do I sign?”
However, for SEO, it’s difficult to argue that packages will best address the needs of a website and their organic presence. Even if you’re specialized within a vertical of very similar websites and brands, there’s a good chance you’ll be faced with clients that are at different stages in the SEO roadmap – therefore, the highest and best use of your time will likely change from client to client.
You’ll also want to consider each client’s individual goals. While the overall goal of an SEO campaign in most cases is to drive qualified leads, a client may have other goals that your packages will need to address (e.g., drive reviews, increase brand awareness through blog, etc.).
Remember to consider scope while building your packages. What is the amount of work needed to make an impact at each package level? One way to differentiate your packages would be to target your lowest package to a client with low levels of competition (industry, location) and then craft your largest package around the highest levels of competition. If you provide SEO services for dentists, for example, use an office in a rural town for your smallest package and an office in Chicago for your largest. Just remember to focus on scope – what do I need to do to make an impact?
Pricing your packages will require you to look at the deliverables you just created, line-by-line, and determine how much they each cost for you to complete (including labor). You can use your hourly rate here to ensure that margin is baked in.
Now that you have a price in mind, consider market value. Are you aligned? Remember – if the market won’t pay that much, your cost doesn’t matter.
Here’s a simplistic example of how you can display package options to a client:
BONUS – UpCity’s Local Search Competition Index
At UpCity, we thought it would be interesting to look at industry, location, and other competitive considerations when determining the appropriate scope for a local SEO campaign. Since the goal of an SEO campaign is to outrank and outperform your online competitors, why not start your pricing model by looking at the competitive landscape?
Our model started simply – look at a potential client’s industry and location, use tiered multipliers to account for increases in competition for each, then price the engagement based on that hourly output.
Example: A coffee shop in Chicago. The industry “coffee shop” fits into industry tier 2 (1.25 x base number of hours) and “Chicago” fits into the location tier 1 (2 x base number of hours). Using those multipliers applied to your base number of hours for SEO services, you can arrive at the require amount of hours to make an impact for a coffee shop in Chicago.
Take a look at a rudimentary version of UpCity’s Local SEO Pricing Tool here. You’ll have to make a copy of the spreadsheet for full functionality.
Clearly, this model is based more on search competitiveness than any other factor and there are certain limitations. That said, what do you think? How would you improve upon a model like this one?
So which pricing model is best for my current SEO deal?
Here are a few examples of pricing situations and their recommended pricing models:
A pet walking company approaches you and says, “We know we need help with SEO, but we’re not sure how much budget we’ll be able to dedicate each month.” After looking at the site, you see that there is no clear keyword focus and title tags are missing. Next, you see that their local listings are a mess – addresses out of date, phone numbers missing, etc. What’s your pricing model?
An hourly pricing model might work well for both sides here. You have a clear strategy for the engagement including keyword research, on-site updates, and local listing cleanup. You also know that you have a 50% profit margin if your hourly pricing is at $75/hr. Feel free to give yourself a safety net by requiring a monthly minimum number of hours, but you can feel comfortable keeping the client happy and driving results with an hourly pricing model here.
An e-commerce site that sells cycling gear to customers across the U.S. has just finished building a new website. The old site averaged 1,200 sessions per day and the business is very worried about losing this traction when the new site is launched. They’re not ready to invest in an on-going SEO engagement, but they desperately want to get this re-launch right. How do you approach it?
Yes, the website likely needs on-going SEO help. But instead of forcing a long-term engagement, go ahead and price this as a one-time project with the goal of proving your value every step of the way. Build a solid relationship as you walk them through your 301-redirect map and content analysis for the new site.
You’re an agency that has decided to explore the plumbing vertical and you’re looking to scale quickly. Knowing that a large majority of plumbing websites are very similar, you want to create an SEO solution that you’re confident will produce results, but can be easily replicated. What is your approach?
Go ahead and create packages for your clients. You can have multiple tiers and guide potential plumber clients towards the tier that’s best for them. It might also be helpful to use something similar to the UpCity Search Competitiveness Model to determine the best tier (and price) for a specific campaign.
When it comes to pricing SEO, there are many things to consider and rarely are two situations the same. With a solid understanding of your costs, competition, and scope, you’ll be able to choose a pricing structure that best fits the engagement and makes sense for both you and your client.
Do you need help putting together an SEO pitch? Check out our guide, including a downloadable SEO sales pitch deck:
The post SEO Pricing: How to Price Your Services appeared first on SEO Software | Inbound Marketing Software | UpCity.