By Chris Olberding
Monday, November 26, 2007
|
SEO is a relatively new field, in order to fully understand and best price our services we conducted a short survey of existing firms' pricing for their seo services. The prices below are real prices posted online but names have been withheld.
Top Firm
Well recognized, popular web site in SEM circles, active in conference, occasional national publicity such as Washington Post, Newsweek, etc.
- Site Reviews $15k - $50k
- Link Building Campaign: 10k+
- 4.5 months, 45h of consultation, a comprehensive report 45 days in $30k
- Full Package: $120k (Note: full package generally includes a site redesign but in most cases probably not any development costs.)
Middle of the Road Firm: 1
Mid to small web design company rebranded as a web marketing company. Design poor, contains a lot of information, site doesn’t inspire trust, probably do decent business.
- Site Reviews $2.5k and 1 month
- Full package (not including link budget) $12k
Middle of the Road Firm: 2
Pricing models based around inclusion of a mishmash of services.
- Packages range from 3000 – 5000 with Custom Packages starting at $7500
- Link Building $2400
Web Development Firm
Web development firm, clients begin asking for and are sold marketing services secondary and in addition to a web development project.
- $250 – $400/month Full Package. Redesign, development extra.
Bottom of the Barrel
Scams, ineffective services and overseas company fall into this category. Generally charging a flat rate for a year of less than $1000, sometimes as low as $60.
There are many of these kinds of companies and web sites. Many are borderline scams, usually with guarantees and false claims. Many confuse the client about what SEO and PPC are. Some promise 100 leads which translates into 100 clicks via PPC.
Analysis of Pricing Structures
Written by Christopher Olberding
Most of the firms above use a static up front price with differing pricing schedules. However the exception, the Web Development Firm, is not unusual, charging a monthly flat rate in a non-terminating contract is underrepresented above. It seems that the more successful and prominent SEO firms tend to use a flat fee spread over the life of a fixed term contract. Cheap and scam sites tend to charge a small fee for a years service that is all paid up front for obvious reasons. Companies with their primary business in web design and development tend to be the group that charges on a monthly basis, perhaps this is due to uncertainty of what the market will bear, the lure of recurring revenue, or something else.
Flat Monthly Rates
In almost every instance the bulk of hours spent in a new internet marketing project will be in the first few months. Many firms that charge a flat monthly rate even acknowledge this to the public and clients. This results in a) the marketing firm making the choice between not achieving timely results or essentially providing services on speculation that the client will not terminate the contract and b) the client becoming dissatisfied with the lack of timely results or realizing, after 5 – 6 months that there is little incentive to continue to pay the monthly fee as the bulk of the work has already been performed. In my experience this often leads to a deteriorating relationship between the firm and the client, which can, and often does spill over into other projects.
Alternative Pricing Structures
A number of other pricing structures for SEO service are used and/or have been suggested, these include performance-based measures, based on traffic, conversions and/or sales, or even through quasi-affiliate kind of arrangements. While interesting there are a number of logistical problems with these pricing structure, especially for smaller clients, and would require a lot of experience to evaluate beforehand if taking on a client would be profitable. Additionally this pricing structures shift the nature of the relationship between the firm and client closer to an affiliate, or outside sales position.
Fixed-Rate Fixed-Length Contracts
The most common pricing structure at least among reputable firms is a (more or less) fixed-rate contract of a limited amount of time. The payment schedule varies greatly between firms but I generally prefer a large up front payment with the remaining balance being paid in monthly installments over the life of the contract. This ensures the client is locked into the process, the total amount of the contract is guaranteed, the firm receives a sufficient portion of the contract to cover the initial time investment. Because the client pays the remaining balance over the rest of the contract there should be little incentive for the client to withhold payment at the end of the contract as could be the case if the final payment is large. At the end of this type of contract a second maintenance, reporting, and/or link building contract could be drafted, which could be on a monthly basis but would contain a smaller scope of services. It is also possible that more work would be needed or an opportunity was identified in the course of the first contract that would result in a second flat-fee limited-term agreement.
Conclusions
From the above discussion it is apparent that billing SEO services on a fixed-rate fixed-length contract is favored. Structuring contracts in this manner avoids many of the pitfalls and potential dangers to the client relationship that a flat-monthly rate encourages. I dislike the idea of using a pricing model that is based on reaching a point where you are overcharging clients. The amount charged should be directly linked to the hours of work performed and the payment structure should reflect the hours worked during the billing period as closely as possible.