SEO Pricing Q&A – Pricing SEO Packages & Services
October 7, 2008
I just got an email from a local SEO buddy who attended our last meetup. He is considering signing on his first client. To my knowledge, he has some decent experience with his own sites, but not much working with client sites. Anyhow, he inquired about pricing:
I have a potential first client asking me for a fee schedule. Do you know of a good template I can use? Any best practices you would care to share here? What do you say when someone asks for a fee schedule?
I started typing a reply to him, and then found myself on a huge tangent discussing not just pricing of SEO services, but also pricing for professional services and hourly vs. project-based pricing. Tangents are not uncommon for me. What was I saying again? Anyhow, here was my response:
Pricing is a topic that fascinates me, and one I feel is much deeper than I thought. One could probably have a discussion for one hour per every day about pricing and never hit on the same item twice.
As such, I don’t have any great answers here. I don’t often get asked for a “fee schedule” but I do often get asked “how much do you charge” or “what is a ballpark range” or things like that.
I’ve gone back in forth several times over the years about whether its best to price each project from scratch or to have pre-made SEO packages. Each has its own pluses and minuses. Naturally the packages are nice b/c they take less time on your end. You say $X includes items a, b and c and/or Y number of hours. The client however may feel as though its not really customized for their own needs, or there may be items they do not want or need in your package… as well as additional items your package might not include. By contrast, pricing everything on a custom basis takes forever and often I find the point I’m trying to illustrate is not communicated as well each time as it would be if I spent more time creating a template or package offering, which I could tweak many times to refine it.
When I use the custom model I basically say “how many hours am I going to need to work and how much of a budget will I need in order to achieve X level of results for this client?”. Then, I add up what I’m looking for as an hourly rate plus the budget needed, overhead, etc. and that’s my price. Basically I adjust my hours to fit the clients desired results.
The other model – packages – I basically set the price and set my hours before ever even speaking with a prospect. Its $X for package B. That’s what it costs. Then I simply adjust either the expected level of results or the scope of the project to fit. Example: “Mr. Client, you can either choose package A or package B. Package B is more comprehensive and will likely get you good results for your entire product line. Package A costs less and includes less budget, so we could either get less results for each product you offer (maybe you’ll rank #7 instead of #1) or we could choose to focus on only half of your products and do an equivalent job with those, but just with a fewer number.”
I reality I flip flop a lot and sort of do a little of both. Basically I have like 3 price points that we’ll do work for. Sometimes I’ll pitch whichever package I believe is the best match for the client’s needs, competition and desired results – and other times I’ll give them two choices if I think they are sort of in between two packages.
In the end, pricing professional services can be quite tough, and is a little bit abstract, especially with SEO. Even if you price just by-the-hour its a little bit “art” or “guessing game” unless you keep a stop watch with you at all times. Even with a stop-watch, how do you measure time you spent researching a topic that relates to the client but could also benefit you in other ways? Its my general preference on both sides (as the seller of services and even more so as a buyer of services) to have a price for a project. To me, its easier to plan on $X for this project than it is to plan on $X per hour. That way if the other guy under-estimated I don’t get screwed! As such, I price all of my services on a per-project or per-month basis. This way my clients know what to expect, and if something takes me longer than I thought than its my fault and I eat that cost, not them.
I recently hired a lawyer to review a particular contract, and he priced by the hour. I hated it. First, I had no idea what it would cost me. My expected range was between $250 and $5,000 depending on the negotiations and revisions to the contract. We ended up spending like $1,500 or maybe just over that. I can understand his stance, but as a buyer I like to know what to budget for.
I’ll also add to this though – with professional services I don’t really think “time” is what you are paying for, so much as expertise. We all know this. Its sort of why I hired the $250 per hour lawyer and not the $100 per hour guy. Aside from their rates, what I really bought was his expertise and experience. How can you price that?
Its the same with SEO services. I’ve had clients where we did 10 hours worth of work for… and 1 of those hours we produced more benefit than the other 9 hours combined.
So should they have only paid me for my 1 hour of work, or the 4 hours of total work? No. Here’s why.
If they hired an inexperienced SEO he would have said “SEO is all about link building”. He would have spent his first few months on the job building inbound links from crappy sites. That wouldn’t have helped. This site already had a ton of “link juice”, it was a minor technical issue preventing indexing. Since I had some hands-on experience with similar sites, I knew that my biggest bang for the buck in the first few weeks would be on-site stuff. Had I focused on link building maybe I would have increased their links by 2%. This silly on-site change made a bigger difference.
Its not how long it took, its knowing what to do. To that extent, while it took me 1 hour to find and fix the issue, it took me roughly 40-50 hours per week for probably 3 years up until that point of learning HTML, SEO, etc. that gave me the background knowledge necessarily to identify and solve the problem… and more importantly the unknown number of hours spent in school and in various organizations working on my public speaking and communication skills that were vital helping the team to understand the problem and persuade them to fix it ASAP. Again, even if a less-experienced guy (and this was years ago!) would have found the problem, they may not have been able to make the business argument in a corporate environment to get the problem fixed, particularly to a bunch of developers who generally refuse to issue releases between development builds!
Anyhow, point is that the time spent on the actual project is simply not as important as the net outcome or benefit of the completed project to your business’s bottom line. And with a higher-level professional you are benefiting from time they have spent in the past investing in themselves… I could hire a lawyer for $250 an hour who only takes 1 hour to revise my contract b/c he is already very familiar with the verbiage, applicable laws and the industry. By contrast, the $100 an hour lawyer might need to spend 3 hours researching the laws and industry as well as an hour to revise the document, thus costing $400 instead of $250 as an end-result to myself, the buyer. So which is really less-expensive? Clearly the $250 per hour guy is, and if he has the level of expertise we believe than he may well produce a better end-product too.
This is sort of what I love about the lead generation industry… its pay-per-performance in most cases and not by-the-hour or even by-the-project. Sure there are still limitations – if its CPL than you can argue “all leads are not equal” and I’ll agree. Who cares how many hours we invested to produce the lead? And even if you did care, you can never truly calculate that number unless you account for allocations of your time associated with learning and experience not directly-associated with each individual lead. See “fixed cost versus variable cost” and then think about it in the service context rather than production of hard goods. Top-level professional services are sort of like high fixed costs… a tremendous amount up front but the variable cost associated with each project as a result of this experience is less than with a professional who has not accumulated the same degree of experience or aptitude.