SEO Services – How Should They Be Priced?

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So, listen, I am a search guy. I have worked with clients big and small. I have had business models that are complex and simple. Pricing SEO services is really hard. The world of SEO is murky around effort and impact. As a disclaimer, I know that there are some AMAZINGLY smart people in the search world, and their advice is truly valuable. Further, anybody who is leveraging their depth of experience and time deserves to be paid.
Here is the rub – the lack of transparency on the part of SEO consultants (heck, let’s extend this to marketing consultants as a whole) about what they are going to do and the value of those activities makes buying SEO services a huge leap of faith for customers. The customer ends up buying a pile of research, some recommendations and a lot of hope. And regardless of how rigorous their research and approach, the consultant does not know which of their activities drove which kind of results.
There are firms that try to quantify the expenses based on effort, pricing by the hour. And this is a reasonable way to think of SEO services. But if you are a marketer, since you pay up front for the work, you are essentially gambling that your investment will pay off. You are paying and praying. And if you are the consultant, by pricing this way, you are truncating your business opportunity because if you are charging by the hour, you need people to man those hours. In order to book 30 billable hours a week, a consultant probably needs to spend 60 at the keyboard. This inhibits your scale. Your team must grow in lockstep with the scale of your business. This mandates that your margin stays roughly the same. You never gain in percentage profitability or grab any true economies of scale.
There are other companies that work by the word. They will focus on 10 or 12 keywords and charge you per word. These tend to be smaller guys, and may be leveraging a network of sites for linking purposes. However, I like the model. The fee is discrete. If you, as the marketer, only see benefit in a particular word, then that is the only thing you pay for. However, as any good marketer knows, consumers aren’t that simple. They have thousands of ways of expressing intent to engage with your business, and the chances of you picking the very best ones are slim. For the consultant, working on a per word basis is also limiting, because you may be laser-focused on , and you end up generating great results in . Guess what? You aren’t getting paid. This doesn’t work for anyone.
There are a burgeoning crop of companies that work on the “per click” model, essentially trying to replicate the discrete nature of the paid search billing experience. This would be a terrific model if the reasons for search positioning were transparent. And they aren’t. If you are the marketer, and you see that you started to suddenly get organic clicks on , you are thinking, “Awesome! My print ads (or mobile ads or blog post or price reduction or positive thinking) around are REALLY starting to pay off!” And, if you are the SEO guys? You are thinking “Awesome! That titling change (or meta data or text change or link I acquired or server side change I made) around is really starting to pay off!”. So who is right? Both of you. Per click only works if everything is discrete. And organic search never will be.
So what is a marketer to do? What is an SEO agency to do?
My concept is this:

  1. Marketer & Agency agree on an attribution model. Doesn’t matter which one, it just needs to be clear.
  2. Agency does their best effort in every respect. Marketer must generally agree with agency approach.
  3. Agency bills for a percentage of increase in sales through organic search against a rolling 3 month average as determined by attribution model. Maybe there is a minimum spend, maybe there isn’t.

Sound off…what do retailers think? What do agencies think? I know you are out there!

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