Phone: (888) 281-7665 >> Email: info@calcoastwebdesign.com

News & Resources

/

SEM & SEO Pricing models – STICKER SHOCK!

  • By calcoastwebdesign
  • 4 Tags
  • 3 Comments
  • 17 Jan 2013

SEM Pricing models – this post was taken from a Search Engine Strategies session about various SEO’s and how / what they charge.  Cal Coast packages are in line with most offerings except….. our prices are way below what other companies charge!  One thing Cal Coast offers is a ‘Grandfather clause’, where we never raise prices of SEO clients on campaigns.  We LOVE to grandfather in our clients, we are HAPPY to keep you paying low prices because you trusted us when we were small 🙂

4 Speakers:

Rand Fiskin, SEOmoz.org
Lance Loveday, Closed Loop Marketing
Ken Jurina, Epiar
Mike Murray, Fathom SEO

Rand started out by letting us know typical SEO hourly wage is $100-$400 hourly. We’re currently $75, and we bill in 15 minute increments. A little low. His client yearly average payout is 50-150K (um, each), he has some pretty big dog clients. He prices by project, monthly retainers, or profit sharing.

You can also price a million other ways: keyword models, site audit reports, standard consulting, KW research, content and copywriting, link building, stretegic decision planning, viral creation and promo, social media networking, reputation management and control, brand tracking and reporting, web design, training and workshops…phew. I would love to do regular SEO workshops for the SOC chamber.

3 of Rand’s recent clients:

– Needed: KW targeting, link building etc for a large media site. $24K

– Needed: SEO training, consulting, meetings for a classified site. $25K

– Needed: Link building reputation, negative comments off of page 1. $25K

Rand qualifies his prospects by emailing them after an online inquiry (no prices on site) by asking for a phone appointment and including the pricing structure in the email. That’s a nice way not to waste time on the phone. I know clients love it, but us SEO’s don’t like to gib gab…we need to get to work…there’s a whole virtual world to take on for you 🙂

Next up we have Lance. He had to ask the crowd: “How many people are here spying on your SEM’s to make sure you aren’t getting overcharged?” …one lady raised her hand. Wonder how much she was paying, this conference cost her at least 3K after lodging to get that question answered.

Lance told of a PPC SEM who is handling an enormous account, hundreds of millions of advertising dollars per year. He charges a percentage, so he gets paid 7 figures to run that one account. Although it sounds appetizing, CCWD has no interest in being a slave to any one of our clients, even if it is for a cool mil. We love our small and medium businesses and Realtors.

As SEO’s and SEM’s we aim to: minimize risk, max upside, keep competitive, and keep in line with client expectations.

The models his company is currently using are Flat fee, % of $ spent (for PPC), and monthly retainer. Retainers have setup fees, (we do too…mandatory KW research). Their setup included more than ours:

Campaign structure
Ad writing
tracking
Campaign setup
Discovery
Keyword theme research
Strategy

I think we will up our start fees a little and include more of this stuff. Not to gouge our clients, to better serve you out the gates… so simmer down. 🙂 Lance’s setup was about 3x’s his monthly retainer, I think that’s fair.

The whole room also laughed about additional fees SEO’s may incorporate at will:

PITA fee (that means you’re a pain in the ass…we’re gonna double the quote and hope you go away)

Quibbler fee (means you don’t see enough value and are quibbling quote/price, so we have to double it again to make sure you associate some value with our work. Everyone on the panel agreed when prices go up, pettiness goes down)

Campaign intensity (are we up all night against a week deadline?)

How deep the company’s pockets are (sorry its a factor, esp internationally)

How many decision makers you’re trying to assign (aka hoops to jump through)

Time and resources we’re spending (this also includes your response time and willingness to your SEM. SEO’s get paid to twiddle thumbs waiting for you…)

Thankfully we’re blessed to have clients who don’t do any of the above, but we’ve had our fair share. We work for their competition now.

Next up was Ken Jurina, who prefers the Organic tip (yay organic!) Ken prefers the monthly 6-18 month contracts with retainers. He advises SEO’s to “know thyself” and get niched. If you’re a new SEO, you may want to just figure out your monthly expenses and work back from there. If you’re established, you should be charging market price. What is market price tho? Market price should be a company’s well planned profitable model.

A couple warnings for SEM’s:

1. budget for E & O insurance, if you are SEOing really big companies they require it.

2. make your contracts in your state and county, in case you get sued you don’t want travel expenses too.

3. have a signed proposal

4. don’t let clients talk you into discounts for multiple sites. if anything we are going to make them more money, not less, so they are asking for even more for even less. The panel agreed if someone brought 5 sites it may be time to talk. None of the Walmart buy one get one in SEO…sorry guys.

5. beware of “per traffic or per profit models”. you could spend hours sorting data and wondering if the client’s accounting dept intern calculated it right.

6. don’t forget to mark up your training. You’re teaching clients “how to fish”, and essentially work you out of the picture. We are proud of you for wanting to learn, but its not cheap to get this kind of training. Ken charges 1K to train a small company, minimum. Rand doesn’t walk out the door for less than 8K. Angela and I are still charging $75 an hour, get it while you fit in :).

The last speaker Mike Murray was most in line with the Cal Coast model. He works off of monthly retainer models only, sliding between $800-$1800 a month. He doesn’t offer money back or a right to cancel (CCWD doesn’t lock you into contracts like this though, but that being said I want to advise Realtors to budget better …because you waste money when you cancel after 3 months. serious.) Fathom likes to under promise and over deliver. Us too. Here’s more:
Mike mentioned we should have tiers, and the first one can’t be way lower than the middle one. The closer the tiers, the more clients will bump up to your middle package.

All in all SEO pricing packages have a HUGE variation depending on the company and talent you choose.  You don’t always get what you pay for, but if you research the right company and make the commitment, you’ll be thankful you did!

COMMENTS
Well Cal Coast does smart business by grandfathering clients in to things. I realize most business practice this but I’ve run into a few that don’t and it’s no fun. I was pretty shocked her too, to find out that Cal Coast was a little on the low end as far as charging for SEO goes.

I also see here in the post another example of a clients not getting or staying involved with their site or it’s performance. Only one lady raised her hand to acknowledge that she was watching her SEM to make sure she wasn’t being overcharged. All of these posts preach research and careful planning, why wouldn’t anyone research SEM’s?

Bringing up prices at Cal Coast and adding some new services will only benefit the company and it’s client base so I see this as a good thing. That also means new things to learn for me. :)

I really liked your PITA fee. Sometimes I wish that fee could be applicable at the discretion of the person talking to the client. (working in customer service will give you that opinion). The Quibbler fee is another take on raising prices. If a product is great I’m going to buy it but if the price goes to high on it, forget it. Take Sony’s Playstation 3 for example. That thing costs 600 dollars and although it’s a Blu-Ray player and plays video games I’m not going to pay 600 dollars for a gaming console. That might sound petty but raising the price on that isn’t going to solve their problem……just my take thought I do see your point. The time and resources a company spends must absolutely factor into pricing and as new tasks must be learned and implemented prices must go up to keep up with the changes.

I didn’t know that anyone who hires you to do SEO can ask for E&O insurance! How can you offer insurance on something like SEO? Search engines are semi-unpredictable and specific results can’t be guaranteed. Interesting to know though and a good point if your considering SEOing on your own.

I like Mike’s idea about tier’s for Cal Coast. That’s a smart idea and I can see that working well.
I am honestly shocked to see that CCWD charges only $75 per hour for work. I think that clients are getting a steal at that rate. I would definatley be curious to see what competitors are charging - I'm sure its probablly at least double that rate.

I also think you should consider billing clients minimum time rounded up - if a project takes 15 minutes or less its billed at .25 hours, but 16 minutes or more should be billed at .5 hours - almost every company that bills on hours has this structure. Why short change your company?
Okay I love the PITA fee that rocks. I found this site because we are both members of VMB and I thought I'd check out your blog...It's Awesome!