1. Keyword-based Pricing
2. One-time Fee
3. Hourly Payments
4. Variable Fee
5. Pay For Performance
How much do you pay for the services that get you more customers from search engines?
Before asking this question, understand the different ways that SEO consultants and agencies charge and figure what pricing model should you be using. Choosing the one that’s right for your isn’t always apparent until after you’ve spent (or lost) your money. I’ve wrestled with the question of how to price SEO so I’d like to dispel as much of the confusion as possible in this post.
1. Keyword-based Pricing
I define this as pricing the cost of your SEO services based on a predetermined number of keywords. Keyword-based pricing can be component of a pay for performance, campaign or fee-based model. It means:
- You are paying your SEO company to focus their efforts at the keyword level
- The number of keywords determines the cost (the more words the higher the price you pay)
- Success is determined by rankings (instead of visits, leads, sales, etc.)
Search engines are all about keywords, so what could go wrong with this approach?
The first question that comes to mind is how are the words determined? Most SEO folks look at search volume, relevancy, competition and ability to convert to figure out what keywords you should target. Do you want to be charged for work on rankings for “air conditioners” or “best air conditioners in Greenland?” Can you pay someone to make you rank consistently in multiple markets for a competitive keyword like “air conditioners?” Possibly, but less competitive keyword phrases are much easier to rank for. So, everything depends on the keywords.
The biggest problem with pricing by keywords is that search engines don’t just look at keywords anymore. Semantic search takes into account “entities” to try and figure out the meaning of your content. Sites that are determined to be authoritative in a topic can get traffic for large set of related keywords. Semantic search expert David Amerland explains:
“At its most basic level semantic search applies meaning to the connections between the different data nodes of the Web in ways that allow a clearer understanding of them than we have ever had to date.”
Pricing by keyword made sense when search engines “thought” that way. If you’re able to do time travel, use keyword pricing in the years up to about 2005 or so.
There is nothing wrong with putting thought and effort into keyword performance in today’s world of entities. Pricing by keywords sets expectations too high or sells you short on strategy.
2. One-time Fee
A one-time SEO fee is a unique, one-off, payment for the work that you do, which is agreed beforehand. With this type of “project” work, you’re charged for:
- A defined input, usually a list of SEO tasks that will be accomplished
- Specific amount of time spent on a project.
Think of it as similar to how you’d bill a contractor for building work on your house. You pay a specific fee for everything that’s going to be done, and what counts as completion. Here’s an example of a statement of work that I did as a one-time SEO fee for a client:
- Provide an SEO site assessment with a prioritized list of action items, analysis and recommendations to improve the existing site performance. Includes technical SEO recommendations, sitemap, link structure, redirects and other improvements. Implement all approved recommendations.
- Develop a list of opportunity words to target based on keyword and competitor research in respect to search volume, relevancy and conversion.
- Create a list of URLs showing recommended existing tags based on keyword research. Implement tag changes.
- Outline improved site structure and landing page copy. Create three new landing pages and edit existing pages based on our keyword research findings.
Paying a one-time fee puts you in a position where you know exactly what you should be getting by the end of the service. Because it’s agreed on a checklist, like the above. If you’re working on a smaller project, testing an SEO service, or just don’t have the budget for a campaign-style engagement, this can be a good payment
But this payment type can be flawed because SEO doesn’t work in a one-hit capacity.
Google changes it’s algorithms on a small scale around 500-600 times a year, and it rolls out a large update – like a Panda or Penguin update – every so often too. Meaning that what’s been done in this time period, without maintenance, can become less effective over time. So while you may save money here initially, it could potentially cost you more money over time.
An SEO company might charge this to you in addition to a package. For example, they’d complete 30 hours of SEO work on your site with a monthly maintenance fee attached. However companies taking one off payments are few and far between nowadays.
There isn’t anything wrong with this payment type. But if you’re playing the long game of SEO (which I would recommend) a one-time fee feels like the first inning.
3. Hourly Payments
Similar to hiring a freelancer, hourly payments for SEO are used to charge for x, y or z amount of hours per week on your site. This is performed at an agreed upon rate set before any of the work starts.
A report by Clutch, a company that identifies leading software and professional services firms delivering results for their clients has most of their “Best SEO Companies” charging between $100 and $300 per hour.
There are a couple of reasons that you might suggest this payment option:
- Build Trust: Working with a new SEO company means that trust hasn’t been built yet. Working by the hour can help build that trust and see if you work well together as a team.
- More Control: With hourly payments you’re a little closer to the action and you can get a deeper look at what’s being done, and when.
The only downside to hourly payments is that it’s easy to run up a bill quickly. If you’re not clear on the amount of hours you’re going to purchase, then you can find yourself being billed for work above and beyond what you expected. And, nobody likes a surprise invoice.
Here’s an example of an hourly SEO work statement we wrote for a client (name and price changed):
The below represents a statement of expected SEO work to be done by the Leverable team for Acme Widget Company. The efforts are expected to begin May 4th. The work will be billed at a rate of $XXX and will not exceed 10 hours.
Leverable will investigate and analyze why organic traffic dropped earlier in the year after a redesign was performed. Leverable will make recommendations to improve the Acme Widget Company site’s organic search performance based on the findings. The deliverable for this project will be a report that explains the findings with recommended steps to take going forward.
If you’re just looking to get started with a new SEO company, the hourly payment method is a fair approach.
4. Variable Fee
Variable Fees for SEO services are an interesting concept. Because they tend to be stacked that you’ll pay more at certain times, or less at others.
Let me give you an example:
You’re doing a complete overhaul of your site, from design through to content and everything in between. And the project is going to take a year to complete. It could break down to this:
- Month 1-3: Most expensive because the work is at the most intense.
- Month 4-6: Least expensive because you’re testing and assessing results.
- Month 6-9: Price rises to prepare for the busy season in your niche.
- Month 10-12: Consistent medium price for maintenance.
That might be slightly oversimplified but you understand in implication. There are times where you’ll be getting charged more, and times where you get charged less.
An SEO company might charge you this if you’re taking on multiple changes to your site. Or, if you have a seasonal requirement and know when you’ll be getting a lot of traffic, and less traffic, where you’ll need these services in different capacities.
For example, an ecommerce site that focuses on holiday gifts – Valentines, Halloween and Christmas or Hanukkah – like Moonpig, knows when to expect a spike in their SEO requirements, and when there will be a three month lull. This means you only spend more money – or complete more work – when it’s absolutely necessary.
Variable fee SEO pricing could be the optimal payment option if you’ve got a great sense of your business and the patterns you follow. As smart as it feels, this pricing method is not for everyone. In my experience, clients don’t seem to like variable fees. Perhaps because a fixed cost is less of a worry.
5. Pay For Performance
I have one piece of advice if you encounter an SEO company charging this way:
Don’t hire them.
Sort of like a law firm contingency fee, this payment method incentivizes SEO’s to only get paid based on the results they produce. Therefore, if they do work that isn’t getting you results, they don’t get paid. Which doesn’t sound all that bad on the surface.
But, as Search Engine Journal points out here, when SEO’s are incentivized in this way, the work gets sloppy:
“For example, a snake oil firm promises you top rankings for certain keywords in a month. The firm would quite probably sit idle for the first 15 days, but for the last 15 days it’d do a terribly aggressive SEO […] so it can make an impressive month-end report […] but as the days pass by, you’re amazed to see your rankings disappearing like a shooting star. Like they never existed. That’s when you realize you’ve been duped.”
This could saddle you a penalty and force you to have to spend more money to get your site back on track. So, you’re out of pocket and without traffic. Not a good position to be in.
Pay for performance works for some industries and can provide value to clients. Not with SEO. A “we don’t get paid unless you win” payment model might mean “we don’t answer the phone unless you win.” The pay for performance SEO company will be tempted to take the fastest, cheapest method of optimization (low quality links instead of high quality content).
6. Retainer Pricing
My favorite SEO pricing method is the retainer. For a predetermined fee paid each month you can grow your organic search presence. During this time, your SEO company consults with you to develop the best strategy and how to implement it. You get reports to make sure everything is on track while your SEO consultant works to bring you closer to the results you want. This puts the SEO team and client engaged in a campaign together where they monitor goals, adjust tactics and enjoy the high fives along the way.
As Jason DeMers of AudienceBloom writing at Search Engine Watch says:
“The monthly retainer is the most common payment model, because it provides the greatest ROI”
This is usually the natural progression from hourly pricing so you can establish a strong trust base. And, you can normally cancel all of the services in a 30 to 60 day window.
Most SEO companies present you with a retainer price via a proposal. You decide if you like it or want to make changes. Ultimately you sign a contract and start.
If you’ve found an SEO company that you like and want to continue working with them on your long term SEO strategy, this pricing method works great.
7. Package Pricing
“Life is like a box of chocolates.”
The idea that you can get an assortment of goodies for one low price gives you the sense that you’re getting good value for your money.
But to quote the rest of the phrase from Forest Gump,
“You never know what you’re gonna get.”
With an intangible service like SEO, you better believe that some of the chocolates may not taste as good as they look in the pretty box.
You’ll see an SEO pricing plan or package offering charged as either a one-time or a retainer-based fee. These are some attributes of SEO packages that I’ve noticed:
- There is strong demand for packages from local, budget-minded and hands off businesses.
- Tons of small agencies and freelancers from all over the world offer packages.
- Often offered is a suite of services that have been purchased at a discount.
- A diverse array of companies offer them (web designers, developers, hosting, print shops).
- The services in the package are not always strictly SEO-related (often social media, paid search, advertising).
SEO Packages can work if your need matches what you are being sold.
I suspect you may get some services you don’t need. For example, if your site has an healthy and growing backlink profile, do you really need to spend money on a package that offers 10 monthly links from article directories?
Or you may NOT get a service that you do need. I’ve seen clients who have earned almost no backlinks and have little offsite activity. Competitors are killing them.
I’ve thought about why I dislike package pricing and I believe it must be because it can easily transform SEO into a commodity instead of a uniquely customized expert service. Contrast the SEO package with an SEO strategy developed specifically for your company that assesses strengths and weaknesses and offers a unique plan of action that your competitors won’t have.
How do you like to see SEO services priced?