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:
- 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)
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
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
Two 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 Shutterstock.com. Used under license.)