SBSM Mailbag: How Best to Charge Small Businesses for SEO Services?

Filed in MY BEST POSTS, SEO by Matt McGee on July 9, 2013 8 Comments

Kris recently sent in a good question about providing SEO services for small businesses; more specifically, about the business model and billing:

I usually work on a monthly retainer-syle basis with no contract. I sometimes feel apprehensive about this because I feel that huge value is delivered in the plan and strategy that is done at the beginning in the analysis/research phase. Execution of the plan often does not require as much knowlege or skill but is where I make back the investment in my skills (education, reading SEO blogs at 2am on Saturday night, etc.).

Do I make prospective clients sign a contract? Many SMBs are apprehensive about contracts for SEO and long-term commitments. I’m a little leery, too, in sue-happy USA. Has this been a concern of yours in the past? How have you handled this situation?

Thanks for the email, Kris. Good questions.

My experience is the same as yours when you say that the most value is provided at the beginning of an SEO engagement. As a service provider, you’re being hired for your expertise, and that should shine the most during the things that happen when you first start working with a small business:

  • planning
  • setting goals
  • analyzing competitors
  • analyzing the keyword landscape
  • auditing the client’s website
  • writing up your audit report
  • developing recommendations and a plan of attack
  • writing the recommendations report(s)
  • etc.

The tasks involved will depend on what type of service you offer. For me, as a consultant-only, that list above is about 80 to 90 percent I do with a client, and it all happens in the first few months of working together. (The actual implementation is in the client’s hands.)

Once all that’s done, my work becomes much easier. It typically involves

  • guiding the implementation effort via phone and email
  • monitoring analytics
  • repeating keyword analysis/research as needed
  • adjusting recommendations as needed
  • educating the client on new developments
  • etc.

This second stage is much less time-consuming and involves less hands-on activity. It’s like steering the ship, whereas the first stage was like building the ship.

SEO Contracts & Retainers

contract-200pxTwo things before we talk about billing:

1.) Yes, you need a contract. I disagree with you on this point. The fact that we live in a “sue-happy” country is why you need a contract! The contract exists for your protection and the client’s. Don’t skip this.

2.) I don’t like retainers. When you work on a retainer basis, you’re bound to find yourself digging around for things to do — whether they really need to be done or not. The client is paying you X every month, and it creates an obligation for you to provide something for that money — even if the work doesn’t really need to be done. That’s not good for the client.

How I Bill(ed) for SEO Services

I put the “(ed)” up there because I’m only working with one client these days and I’m not taking on any new projects. So it’s still current, but maybe with an asterisk.

My SEO contracts spell(ed) out

  • the goals of the engagement
  • exactly what my deliverables were, and when they’d be delivered
  • how much each deliverable cost
  • a start date and timetable for the engagement (typically somewhere from 6-12 months)
  • a total cost for the engagement
  • a payment schedule
  • my hourly rate if the client wished to continue working with me after the contract work was completed (and if any work not spelled out in the contract was added along the way)

About the schedule item above — I usually gave clients 4-5 months to pay in full. The first payment was usually about 40-50 percent of the contract’s value, and then each monthly payment after that got smaller until they paid me in full. (In other words, a $20,000 contract might have these monthly payments: $8k, $6k, $3k and $3k.)

If the client ever requested work not listed in the contract, I’d politely let them know that it would cost extra and that I’d send them a separate invoice at the start of the next month reflecting my actual time for doing the work. (This was spelled out in the contract, so there’s no room for debate.)

Important: Note that in the bullet list above, the contract doesn’t have an “end date.” It only has a start date and a timetable for when all work will be delivered. And then it explains that, if the client wishes, we’ll continue working after those deliverables are finished and I’ll bill at my hourly rate. If not, the client is free to walk away after all invoices have been paid and deliverables provided.

With my current client, the deliverables ended after 6-8 months, as I recall, and here we are … still working together five years later.

Today, here’s how I bill this client:

  • no retainer
  • use me for two hours in a given month, I send an invoice for two hours
  • use me for zero hours in a given month, I don’t send an invoice

We’ve been working together for a long time and are like a team now, and this works perfectly for us. I realize that arrangement may not be for everyone. (I have a wonderful, full-time paying gig with Third Door Media which makes it possible for me to not need to bill for consulting every month.)

I hope this answers your question, Kris. Glad to clarify as needed (for you or any other readers) in the comments below.

One related article from the archives that kinda goes along with this: Small Business SEO: Costs, Expectations & Realities.

If you have a question I might be able to answer in a future blog post, please contact me!

(Stock image via Used under license.)

Comments (8)

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  1. Hi Matt,
    Thanks for the super write-up. I don’t know why I dread the contract so much. I think you are right and I need to put one together. As far as the retainer style, I’m not married to it, but have found that small business client were more willing to move forward with that type of arrangement.

  2. Thank you for this article. Have you seen any SEO contract templates available that someone could use as a starting point?

    • Matt McGee says:

      Y’know … as I was writing this, I had an idea to try to convert my old/current contract into something generic that might serve as a template. If I don’t do that in the next month or so, remind me, please Dan? Thx.

  3. I find it interesting that some dread “the contract.” I’ve worked with many small businesses and contracts are all they know. After all, they likely have contracts with phone book companies, radio stations, cable companies, etc. for their ads. I rarely have to bring up the topic. They almost always ask me to “send them a contract so they can look it over.”

    If I’m working with a real mom and pop shop that isn’t used to dealing with contracts (i.e. they don’t ask to see one), I will literally just ask them, “How would you like to proceed? Do you want to do this informally and agree to terms via an email or would you like me to draft a formal letter of agreement?” Most businesses will ask for a formal letter of agreement. As a side note, I call it a “Letter of Agreement” as opposed to a contract as it doesn’t sound so imposing to a small business owner.

    Some owners will be perfectly fine agreeing to terms in an email so in those cases that’s exactly what I do. I just outline briefly the terms and have them reply to the email that they agree to them. I keep it simple.

    @Daniel – with Matt’s permission, I can leave a link to a stock Letter of Agreement that I use as the basis for my agreements. They are super basic – literally one page – and only about 4 paragraphs long. It may be simple but it must work because I even have a large law firm that I work with that signed it. They didn’t have any issues with it.

    Travis Van Slooten

  4. We are trying to move away from the set number of deliverables each month to a more generic SEO campaign proposal based upon more general link building and social media engagement. It is impossible to have a set of predetermined tasks since each campaign and business is different. We may list a number of link building activities and insert a number of hours to an overall link building campaign and see what works best for the particular business. We do find that businesses large and small like to see some sort of deliverable list to be able to justify the monthly retainer or fixed fee campaign structure.

    • Matt McGee says:

      “It is impossible to have a set of predetermined tasks since each campaign and business is different.”

      Steven, when you say that, are you referring to being on a monthly retainer, or to SEO projects in general.

      If the latter, I would strongly disagree with you. A typical part of any new client engagement involves auditing the current situation/landscape and developing specific recommendations to help the client reach the desired (and agreed on) goals. If the client has poor local search visibility, then you should have several predetermined tasks related to improving that. If the client has poor content (or no content), there should be several predetermined tasks to improve that. And you list those tasks and deliverables in the contract — which is what I’m referring to in the article.

      If you’re talking about being in an ongoing retainer-style arrangement, then I can see your point. In that situation, tasks aren’t predetermined, but new ones come up as situations change, new competitors come on the scene, Google changes some part of its algorithm, etc.

  5. Sam Taylor says:

    Ranking algorithms of search engines are getting smarter with time, due to which even few links with a powerful seo background can do the job for you. On this basis, the SEO plans and budgets for SEO should change accordingly. If you do not agree with this, then imagine you get 500 links and they do not do a job while just 50 links achieve your required same results. The case is same with on-page, social media marketing and search engine marketing departments. You will have to change with time or time will change you forever.

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