I’ve run two separate agencies over the past 13 years and SEO was a core service for both of these agencies. I’ve also been in competitive bids for new clients against countless SEO companies. One of the biggest challenges for companies when selecting an agency partner is distinguishing between pricing models as it relates to the services being proposed. Pricing and pricing models vary wildly. Moz did a survey of 600 agencies in 2012 and it is still a good place to start if you’re not sure where to start with budgeting. Most importantly you should know what is needed for your business before talking to prospective agencies. We review the most common SEO pricing structures to help you determine which one is best for your company.
What do SEO Companies do for Their Clients?
The existence of SEO only agencies has been on the decline for several years. Most agencies that offer SEO as their core service also offer a variety of other services ranging from PPC, inbound marketing, and social media media marketing. Other digital agencies have added SEO to their suite of services sometimes even outsourcing the work. No matter what type of agency you choose the core services that are provided are relatively consistent although, the level of expertise varies from agency to agency. Below are the typical services involved with SEO:
- Keyword Analysis / Strategy
- Technical SEO updates to website
- Content Development
- Link Removal (Disavow)
- Link Building
- Analytics & Reporting
Most Common SEO Agency Fee Structures
Lets now look at the most common fee models that the bulk of SEO companies use to charge for their services:
While not the most common model for agencies, paying by the hour is a model typically used by consultants. Hourly consulting is best for companies seeking opinions and/or strategy from an external source who is not an employee of your company or the agency. Lower hourly rates tend to indicate less experience.
Guidant for example is not a prototypical SEO company, but we do offer hourly consulting for a few very specific types of SEO services related to agency relationship management. We perform SEO audits, agency audits to ensure performance, and also help companies select agencies. We even have SEO account management services for companies that don’t have in-house resources for agency relationship management.
Project Based Pricing
Contrary to what a lot of people believe, SEO is not something that is done one time. “Set it and forget it” doesn’t work. However, there are some services that can be done a project basis including: link building (or link cleaning) projects, content projects, web development projects, and even optimization of a specific section of a website. You may also find audits done at a fixed fee for the project.
This type of pricing is based on an agreed upon scope of work with defined deliverables. The price is then either proposed by the agency or a budget is set by the company seeking services. Often times the agency will determine the amount of hours it will take to complete the project and then propose the fixed fee using a formula of:
Project Cost =Estimated Hours x Hourly Rate
The most popular fee structure for agencies is the monthly retainer. For agencies it ensures steady cash flow and for companies it provides reliable costs for budgeting purposes. Most of the time agencies also want a minimum term of the length of the engagement. It is also a more agile model which is often needed with the frequent changes that occur with SEO algorithms which requires new approaches.
For companies that want a true partner for long term SEO the monthly retainer model works great. It is best if that retainer also outlines some specifics around initial deliverables and timing to complete. Anytime a businesses hires and SEO on a monthly retainer we recommend also having a relationship with a third party source to help drive agency performance and also run periodic audits of the agency.
Ever since I started in the SEO industry in 2002 there have been companies that touted their services as “pay for performance”.
The Good: It is very appealing for companies to pay only when results are achieved and with SEO often being misunderstood it became a popular way for agencies to differentiate and grab new clients.
The Bad: Fees are usually triggered when keywords hit certain ranking thresholds. Without extremely careful planning and a deep understanding of the traffic that the keywords will deliver companies risk spending large amount of money on keywords that don’t drive traffic.
The Ugly: This model is mostly associated with the most unscrupulous agencies in the business. Some of them use “black hat” tactics that provide short term gains but with huge risks of long term penalties. Other performance-based SEO’s do very little work and are happy to collect small amounts from a large clients base.
Over the past several years there has been an explosion in software as a services (Saas) companies emerging in the SEO space. We will be writing a future post about this after review of some of the top enterprise SEO platforms is completed. In this model your company pays a monthly licensing fee for use of the software which is usually based on the number of keywords being tracked.
Unlike SEO software of the past that simply did keyword reporting and some basic SEO analysis, the newer platforms are very robust. I have been given the privilege of live testing several already and they are all impressive. It is important for companies to understand that at the end of the day these are tools are only as good as the person who is using them and not end to end solutions. They don’t select keywords, optimize pages, write content or build links. These platforms have advanced so much though that when in the hands of an experienced craftsman the need for some agency services is diminished.
Where to Start – Knowing Your Needs
First, the services that your company needs and the services that your agency of choice offers need to be in alignment. If you don’t have the expertise to know exactly what you need from an SEO company then its a good idea to hire an expert to perform an SEO audit prior to starting your search.
This audit should act as the framework for the development of a scope of services to be performed . Don’t rely on software to because search engine optimization is too complex for a simple audit. The consultant that you hire to perform the audit should not be the same person/agency that you hire to perform the SEO services but can act as critical ally when reviewing proposals and driving agency performance.
The Best Pricing Model
There is no right or wrong model for the agencies and many agencies offer flexible models. You should select the pricing model based on your company’s unique needs including project scope, budget, and timing.
We would love to hear your opinions and learn how the pricing model of your SEO company work for you.