51 Comment(s)

1. On Jun 23, 2009, Nick Stamoulis said:

   ROI is a tricky area to get into especially for a small business that sometimes doesn’t even understand the importance of SEO and how it ties into growing the online portion of their company. The problem is that everyone’s idea of ROI is different and everyone rates success in a different manner.

2. On Jun 23, 2009, Jeremy Rivera said:

   I think that this article is really helpful for small businesses to understand the value of an SEO. I’ve worked with a number of small business people, and a number of them wanted to negotiate and pinch every penny. I totally understand their desire to get the most for their money, but most often they really didn’t give SEO the proper value that it should. It’s nice to have a touchstone article to refer them to.

3. On Jun 23, 2009, Will Scott said:

   Matt, great post!

   We are one of those companies that has a recurring relationship. I often say when asked that we can stop working when we’ve driven all our clients’ competitors out of business.

   Luckily our clients tend to “get it” when we talk about ROI.

   And, part of what we do is we help them get it if not. We’re probably not right to help sell a $20.00 widget, but if we are talking to a contractor for whom each job averages to $1500.00 then the ROI is easy to demonstrate.

   Very simply, if each new customer is worth $1,000.00 and we have a high likelihood of bringing 10-20 new customers then it’s a no-brainer.

   In that context $300.00 / month is nothin’.

   And to your point on $300.00 / month, don’t think of it as $300.00 / mo. – think of it as $3600 / year – it then makes a lot more business sense for the provider. And, when well leveraged $3600.00 can go a long way for a local, main-street client.

   Will

   Again, great post.

4. On Jun 23, 2009, David Mihm said:

   Matt, this is truly the best post on this topic that I have EVER read. It is ALL about ROI. The problem is that for SMB’s who are getting sold crappy IYP products left-and-right (as you pointed out a couple weeks ago), all the money they’ve spent on the internet so far has just gone into a big black hole. So they have no confidence that a real SEO strategy is actually going to work.

   I am actually a big fan of the short-term contract / pay-for-performance model with the *right* clients, to get them comfortable with the process and the results. But that is awfully risky if you don’t have complete control of the website.

5. On Jun 23, 2009, Chuck Price said:

   Hi Matt – nice post. When i am faced with this question, I remind the prospect the SEO is a form of marketing. Like other forms of marketing, notably: TV, Radio and newspaper ads there are no guarantees. Unlike those forms of marketing, however, SEO is quantifiable in terms of tracking increases in traffic & rankings.

6. On Jun 23, 2009, James Svoboda said:

   Matt,

   Great post! The business of SEO, even small business, is more complicated than most clients expect. I appreciate posts like this that lend insight into other Small Biz SEO’s are going through. ROI. ROI. ROI. The new location.

7. On Jun 23, 2009, RKF said:

   Matt,

   As others have said, this is a great article and one that I’m tempted to frame and place on the wall right inside the door to our office.

   In defense of the $300/month model, this can be effective implemented with the right type of client. Very small businesses, especially when you have multiple clients in the same vertical, often have the same needs. There is less analysis involved and more implementation based on experience.

   We have learned to be very selective as to which clients are offered service at this price point. If they are handling big ticket transactions, they likely need more than anyone can offer at that price.

   Using our beloved florists as an example, you can research the vertical and apply the best practices repeatedly for each local client. In an industry with an average transaction of $50 that makes sense for them. Not so much for a B2B client, realtor, etc.

   Cheers,

   Ryan

8. On Jun 23, 2009, Matt Siltala said:

   #5 has actually GAINED me a ton of clients. When you are honest with them, show them your accomplishments with other clients and help them UNDERSTAND ROI – they will find it refreshing that a person is not going to “give them the moon” Be honest, in everything and it will pay off in the long run. Matt, killer post here!

9. On Jun 23, 2009, MikeTek said:

   Great post, Matt.

   ROI is everything. That’s the bottom line.

   The trouble most often is that a small business doesn’t know what they can afford to pay to gain a lead/customer. Some do, and for them calculating the ROI on SEO services is straightforward. For everyone else ROI can be tough to pin down – but it’s the only way to effectively evaluate a campaign.

10. On Jun 23, 2009, Ben Rush said:

    Really good post Matt.

    I believe the best option when targeting small businesses is still the “percentage of revenue” option providing you can have the access to their site to make the changes yourself.

    This puts your work on the line as you only get paid for success.

11. On Jun 23, 2009, David said:

    Great article, im going to forward this to my key clients as they are often asked by new clients as to if someone else can promise results for $300/month why can’t my agency also do the same for the $….. I charge.

    Also a big point is that if a client only does this as a test for a bit and your pricing model is 6 to 12 month campaigns, you cannot expect to have everything done in week 1 of the campaign. SEO is an ongoing process that often requires tweaks and improvements over time, while you can give large boosts, it needs to be continued to get the best benefit.

12. On Jun 23, 2009, Joel McLaughlin said:

    Great review guys! Ultimately, many seo companies don’t do all that needs to be done. Either they don’t perform on-site optimization and just build links. Or else they do the opposite; or likely do very little keyword research. On regular occasions customers that inquire to me will choose a cheaper alternative and then they end up coming to me 1 or 2 years later…

13. On Jun 23, 2009, dave oremland said:

    Great post, Matt. Absolutely on target. We are business operators. We have had investments in businesses for a couple of decades. I used to be an outside consultant in a different line of work. In fact I often sold into the SMB market.

    Now one of my tasks in this group is to be the inhouse web guy. We do it to create a marketing presence. We don’t survive without it. We absolutely live off of visibility.

    Marketing and advertising are not areas where SMB owners and decision makers have expertise in virtually all cases. They farm out the work…or if they are big they have in house staffs.

    They need to pay for expertise. They always have, if only to place ads in the yellow pages or have a print or radio/tv station create ads for them.

    It is ALWAYS about ROI. If I spend $1,000 on any form of advertising I need a payback that is a multiple of that number: 5, 6,7, 10, 15 times the advertising cost…whatever works for that business. Geez, the perfume industry pays extraordinary amounts for marketing and and advertising, in fact a huge percentage of total business costs…in part because the cost of making, bottling perfumes is so tiny relative to what they can charge for it.

    ROI is the answer. Its not about the cost…its about the payback.

    Wonderful post.

    Dave

14. On Jun 23, 2009, Scott Clark said:

    I have learned some *HARD* lessons in 2009. One of them is that you have to be the consultant, not the webmaster-by-default. I have made this mistake this year and got burned beyond belief.

    For many of my clients, saying “I only do advice” is a deal breaker – so I’d love to know your secret for keeping arm’s length from the code/websites.

15. On Jun 23, 2009, Janet Thaeler said:

    Matt,
    Thanks for an insightful followup to my post!

    If a small business can’t afford to pay for quality SEO they can do some of it themselves. See this article for a “how to” http://www.elance.com/p/blog/2009/05/5_easy_ways_to_improve_your_search_rankings.html

    Even if you do that, having good solid keywords with a balance between competition and demand is key. It would be worth paying for that research from experts. Then you could apply it as described in the article.

    A lot of small businesses don’t understand how much time and effort it can take to rank for profitable phrases. You not only have to get there but maintain the rankings when competitors are going after the same phrases.

    True: “If you spend your money wisely on SEO, it should bring back returns that are substantially higher than the costs.”

    My only caveat: an SEO company can’t guarantee ROI. We can get you ranked well and you can get a lot of traffic but the site has to sell.

    To see how your site does: run paid search ads to see if your site converts to sales and what keywords work best.

    Thanks for giving people a realistic understanding of costs involved in an SEO campaign.

    Janet

16. On Jun 23, 2009, Rachel said:

    I agree completely. Our company operates on a 6 month model and we charge based on the services provided. Rather than charging per hour, we charge a specific amount per package. We have already calculated expenses internally and know approximately how many hours it will take, plus what the expenses of any hard costs are. I’ve found this to be preferable to our clients because they know exactly what to expect and how much it will cost.

17. On Jun 24, 2009, Miriam said:

    Another totally awesome post from you, Matt. You’re having an exceptional blogging week!

    The highest ROI we’ve brought in for a client is an increase of 400%. Like you, I’m not bragging, but numbers like those should give the SEO confidence to charge what he/she is worth and the client utter joy at having found someone who can help them achieve real results.

    What a pleasure it was to read this.

18. On Jun 24, 2009, Ron Strauss said:

    Thank you for a clear, honest description of how this works. I continually tell clients and potential clients SEO must be an on-going effort and not a “set it and forget” effort.

19. On Jun 24, 2009, Marcel Feenstra said:

    Matt: I agree with pretty much evertything you’ve written and I’ve taken the liberty of highlighting a few salient points at

    http://www.afterimage.nl/2009062401.htm

    Just one comment regarding your points 4 and 5: yes, it’s great if you could “automagically” double every investment you made –you’d invest your last penny, and then some… The problem with SEO, however, is that the ROI is not guaranteed (for reasons you describe), so you can only know *after* the fact if you had a positive ROI.

    IMO, that implies that 1) one should not make a huge investment upfront, but rather proceed “gradually”, on a month-by-month basis; 2) one should have realistic expectations about when results could be visible (say: 2-3 months); and 3) one should *track* results religiously!

20. On Jun 24, 2009, Tyler said:

    I’m one of those guys that charges a monthly fee and I mess with the site to optimize performance. It’s led to longevity for me because the results are have always been improvements. I like to get commitment for a 3-month period, after that we decide what’s in the company’s best interests that’s worthwhile for me and I do a different bid and deal with each company.

21. On Jun 24, 2009, Mary Bowling said:

    Hey Matt,
    Awesome post! So many small businesses have been burned by “bad” internet marketing that it hurts all of us. However, there probably isn’t much percentage in trying to change their minds when they come to you thinking they are going to get ripped off.
    It’s probably best to send business owners that need to be “sold” on SEO and want guarantees to your competition.
    Mary

22. On Jun 24, 2009, Matt McGee said:

    So I had NO CLUE this post would strike the chord that it apparently has struck, and never expected feedback like this. Thanks to all who’ve commented, tweeted, etc.

    @RKF – I suppose that’s a good point about multiple clients making it easier. I have a policy against taking on clients that might compete with one another, so haven’t had an opportunity to use scale/experience as you’re suggesting.

    @MikeTek — another good point. I bet there are plenty of SMBs who don’t know the dollar figure that a new customer equals.

    @Scott Clark — be glad to chat with you about that on email. I’m just completely accepting of the fact that I’ll lose some prospects because I don’t want to touch their sites.

    Thanks again for all the great comments, folks.

23. On Jun 25, 2009, Edward Aw said:

    Great article, Matt!

    I usually try to educate my client about the average life time value of a customer (ALTV). When they can see how much a customer can bring in over their life time with the company, my costs seems like nothing. Even better than ROI actually ROI on steroids!

    For instance, if a customer only buys $200 of product the first time, it may not justify my monthly rate. However, if that same customer has an ALTV of $5000 then my rate seems so reasonable.

    So the ROI is important. Lifetime Value makes the point even more, well, pointed.

24. On Jun 25, 2009, Dan Patterson said:

    I agree with most of what has been said here. SEO is a form of marketing that can’t be guaranteed, but at least you can track what’s being done. Also, you can do a great job increasing a site’s traffic, but if they aren’t willing to make changes to their site so it will convert better then it won’t do a lot of good anyway! But if both client and consultant work well together, any SMB should be able to see a really good return from SEO.

25. On Jun 25, 2009, Kathleen K. O'Connor said:

    Great article. One of my small business clients is interested in SEO and told me he found someone who can do it for $200! I told him that sounds too good to be true. It indeed requires a decision between investing a lot of your time or a substantial amount of money.

26. On Jun 25, 2009, Tom Shivers said:

    Excellent post! “Focus on ROI, not costs.” A business considering hiring an SEO consultant usually has two major concerns:
    1. Confidence in the ability of the SEO consultant to do what he says he will do, and
    2. Fear of choosing the wrong provider, which could mean loss of investment, lost time, lost opportunity, or even loss of their position or job.

    I believe the issues boil down to effective communication between prospect and provider until trust begins to form. And that is what fosters confidence.

27. On Jun 26, 2009, Shawn said:

    I suggest that you dont dive deep into a long term contract with provider, if you have decided to hire someone else. Work with him for a couple of months and there should be open communication all through out. And it would be best if you have basic knowledge of SEO, and you have a solid picture of what your goals are.

28. On Jun 26, 2009, Jenny Molina said:

    Thanks!Such a very helpful article for a new online entrepreneur… I am considering hiring an SEO for my site, really good help,Thanks!

29. On Jun 27, 2009, Max Pool said:

    Really great (and timely) point about not going the performance based model because of the inability to guarantee that their staff will implement your suggestions.

    As the economy creeps downward and more clients have at least one horror story of an internet marketing company that ripped them off, they want to go this approach as much as possible, and for me personally it is just not feasible.

    Using the single point that you can’t support a performance model based on their employees completely deflates the client’s argument for this payment model.

30. On Jun 29, 2009, Gabriella said:

    Excellent, I love this post. You are spot on. I especially liked your “Focus on ROI, not costs” I cannot tell you how many times I have to interview clients to see if they are committed for the “long haul” of SEO.

    Many expect overnight success. They’re apparently not the clients I want…(not a perfect world yet) Let me explain I get at least 3 requests for SEO services per week on our website. I try to set up a phone”interview” (so I can save the headache of a bad relationship in the long run ) in order to verbally tell them we need a 6 month commitment, & we need to understand their marketing, SEO goals, etc… needless to say some never call back.

    We went as far as putting a sample “packet” to use with potential SEO clients only to see the deer in a headlight gaze & some never calling back. So you see I love your “limited” “services. We have been giving “ideas, reviews, Q&A” away only to find some clients take the ideas and go elsewhere. I could go on and on suffice it to say your post is something I will share with my colleagues and clients alike.

31. On Jun 29, 2009, Ross Dunn said:

    Matt you rock You hit the nail on the head.

    You also did a good job of shining a light on the one thing we still offer and that is a $350/mo maintenance service for very small businesses. Your statement “doesn’t understand the true value of his/her time” is dead on – it has been our achilles heel ever since StepForth started. For that amount we provide way too much work and admittedly we lose money on it but we do gain some bottom-line stability which has been a good trade off in the up’s and downs of the economy lately.

    That said, for a truly robust, no-holds barred, approach to increasing a site’s ROI we definitely require a minimum of $1000 per month. The trick is to educate the client about what they are getting and then once they are on board we work our butt off to show them everything we do for their money. Without the educational component, however, we would lose clients right, left, and center.

    Cheers Matt on a great post!
    Ross Dunn

32. On Jun 30, 2009, Remi Turcotte said:

    another great post related to this one would be… how to sell it properly.

    It’s hard for a company to pay for SEO knowing that there’s no guarantee.

33. On Jul 1, 2009, Bill Parlaman said:

    I purposely charge a lot to keep the little companies from contacting me. I immediately position myself to only work for companies who can afford me and appreciate the work I am doing. Maybe I have less clients but I work less and get paid the same as if I had more clients and charged less.

34. On Jul 8, 2009, Ismael Ahmed said:

    This post was very informative. It is true that no guarantee when paying a company for SEO, however, this is a type of marketing that is starting to explode more than ever. It is very important you as a customer do research on the different companies to see which one will fit your needs.

35. On Aug 7, 2009, Troy Scheer said:

    Matt, this is great stuff. Thanks for the post. My $.02

    A professional, experienced SEO (and just for the record, I hate narrowing down the title of the person as an SEO) should first and foremost, develop a strong understanding of your company and the business objectives you have in place. An SEO should understand how the overall interactive marketing picture integrates into other offline objectives and strategies.

    SEOs should understand the technical, content, and link building aspects of SEO. They should understand how to incorporate social media elements into the program. They should be able to analyze what competitors are doing and what other successful SEO campaigns are doing. They need to be able to analyze the overall competitive landscape for key words on which you are looking to rank.

    They should be able to gather information from existing customers to see what the “customers” see as the key words they are searching, not just what the client company feels are important. A good SEO should understand neuro persuasion and how to effectively persuade people to take action. SEO isn’t all about Google.

    They should be concerned with site usability and conversions. They need to help the client understand what works and why it’s working (and what’s not working).

    Then there is the tactical work of taking all of the above and putting it into action.

    When you look at all that is needed to develop an effective and integrated SEO program, each case is completely unique. We’re not selling hamburgers, here. This is a seven course meal prepared to the specifications of the individual. There are the “value meal” sellers out there. But I would make sure you know what you want before you “order.”

36. On Aug 8, 2009, Paul Sherland said:

    Excellent post Matt!

    I mostly deal with clients in the Walla Walla sized and smaller markets where it often isn’t that difficult to rank very well with just a little intelligently-directed effort. My biggest challenge is to provide the education small businesses need to understand that their current websites aren’t performing well and also to understand that their sites can do much better.

    Like you, I make recommendations for changes to a website, but I don’t implement those changes. My other challenge is to guide my clients to web developers who understand and can make these SEO-focused changes. The most prolific web developer in my area told me recently that the solution to SEO was to stuff meta keyword tags into a website. She charges her clients $30 an hour. The other web developer in this town of a little over 9,000 doesn’t show up in either the Google local listings or on the first page of local search results for “web developer,” but she has clients all over rural Texas. So part of my challenge has to be educating the local web developers or finding SEO-savvy, non-local developers who won’t induce sticker shock in my clients.

    If an SEO/Web Word of Mouth consultant wants to help small businesses outside the major metro areas, the major hurdle to overcome is education.

    Again, great post! I’m a big fan of your blog.

37. On Aug 9, 2009, Nick said:

    I am one of those SEO people that is vocal about people trying to get something for nothing. I will never accept a percentage of sales project. I basically accomadated my small business clients by giving them a package that they can afford, and tell them outright that there is not much to this package.

    I agree with the $300 per month. My company charges $300 for the first month and $50 for each additional month. However, this plan does not include any new content or link building which is crucial in SEO. It only includes on-page optimization of existing content and meta tags, submitting search engines, and monitoring the rankings. It gives me a way to upsell the client later on in order for the small business owner to justify the increased expense.

38. On Aug 9, 2009, Nick said:

    I also agree that no small business can afford $100 per hour for SEO consulting. However, small businesses, which are the backbound of this economy, need a form of SEO that is affordable for them. I keep my SEO prices affordable for the little guy by helping them focus on local search, because that is all my Starter SEO package can give them.

39. On Aug 10, 2009, Matt McGee said:

    Nick, there are countless small businesses that can and do spend more than $100/hour on SEO. And they should. Not sure you read the post at this point, because I stated my opinion pretty clearly on what you can possibly get for $300/month. If all you’re doing is fixing meta tags, submitting to search engines (which isn’t necessary in this day and age), and monitoring rankings (which is borderline useless) … well, I don’t think that’s worth $300/month.

40. On Aug 10, 2009, Nick said:

    Matt, I actually do charge $1,000 per month for SEO. However, companies have told me that they can’t afford it. Before that, I have turned away a lot of the cheap clients who can’t afford my services. I always educate these people that SEO takes time to see any results.

    I just created a new starter seo package that is $300 for the first month, and $49 each additional month. I explicitly tell them that they are not going to get much but meta tag optimization, rewriting of existing content, and submitting to search engines.

    Right now, the economy is not supporting $1,000 per month. Have to go with the economy.

41. On Aug 10, 2009, David said:

    @Nick how can you explain such a wide range in your charges, its like McDonalds selling caviar or giving out champagne…

    I can understand if you are working on a project closer to pro-bono work but how can you value your time at $49/month.

    I know automated solutions that cost more than that, if you are not going to do 100% it is not worth it, the client will become angry when they are not getting the same results as your other clients.

    If you are respected and charge such a small figure how can you then turn around and ask for $1000 if they grow or expand their budget.

    It is a race to the bottom and not one that is good for anyone in the web dev industry…

42. On Aug 10, 2009, David said:

    As for the idea that the economy is not supporting $1000/month campaigns they are out there you just need to sell yourself more than a simple “you give me money you rank go up” mentality.

43. On Aug 10, 2009, Paul Sherland said:

    I think the issue we’re stuck on here is what’s a small business. There are lots of very small businesses that don’t have a website and can’t afford to hire a $100/hr consultant. I try to help them by volunteering for free and low-cost seminars sponsored by the local Small Business Development Center. There are lots of other small businesses, like realtors, medical clinics, dentists, car dealers, and gun shops (we’re in TX) that can afford to pay $100 an hour. Those are the folks I’m marketing to.

44. On Aug 10, 2009, David said:

    @Paul you are correct there has been a blur of the lines of what is a SME. The interesting point is how much time they may actually request as my accountant bills in 15 min blocks at $280/hr, their main clients are SME operators. But i will try not to burn up too much of my accountants time because I find it expensive/valuable…

    So if a small business wants to be successful they will pay $100/hr but you maybe more flexible as what the hour includes. Maybe you dont charge for reporting, travel & preparation for the meeting but you still charge $100.

    If they can find $280 for their accountant why not for online? Ask them how much they spend on their phonebill or radio ads…

    I think working with local chamber groups are a great way to educate more people in the same amount of time during free/low-cost seminars.

    If they are so small that they dont have a website and cant afford one atleast explain to them other options such as TrueLocal (in Australia) can give them a free landing page and is already optimised…

45. On Aug 11, 2009, Aditya said:

    Excellent article! Thanks for sharing.

46. On Aug 14, 2009, Shareef Defrawi said:

    You really managed to sum up the key points of seo that business owners have the most difficulty understanding. Specifically the focus on ROI rather than cost. It seems like such an elementary concept yet I am amazed at how many people can’t grasp the idea. Great post! You’ve got a new subscriber!

47. On Aug 21, 2009, Jack said:

    There are some DIY SEO tools out there, such as Lotusjump, that can make SEO affordable so you dont have to fork out $5-1000/month.

48. On Sep 2, 2009, Ritika Bains said:

    You bring up some interesting points and destroy many of the myths small businesses and new website owners have about search engine optimization. Thanks so much for posting this. It’s a valuable resource.

49. On Oct 14, 2009, Vinnie said:

    Matt, great post man, I always point clients to this article and also the pyramid.

50. On Dec 29, 2009, Bob said:

    While I agree on your focusing on the ROI and not the cost. I do disagree with you on your opinion of not being able to get a quality SEO for $300 a month. Each client is different of course but $300 a month is a fair price for a client with a business in a little/no competition industry.

51. On Jul 1, 2010, Ryan Dael said:

    There is a question that confuses my mind for quite some time now regarding SEO. How long does it takes to rank a keyword? This is always what clients ask me. I only answered them 3 months because I know this is the period where Google updates.

    Can you answer my question please at njbabay @ yahoo . com?