Advance Your Agency is a BrightLocal series designed to equip you with the skills, knowledge and advice necessary to take your agency operations to the next level.
This month we focus on pricing, something that can be a thorny and difficult issue for all kinds of agencies.
One of the most common questions we get at BrightLocal is ‘how much should I charge for local SEO?’
It comes from fresh-faced SEOs dipping their toes into the local space and experienced consultants alike, and the answer is never a simple one.
While I’d love to be able to say: “It’s $500 a month – that’s what everyone charges,” and grab a neat featured snippet for my time, the fact is that the answer is the same as it is for many SEO questions:
Still with me? Haven’t bolted grumpily out the door after not getting the clear-cut answer you wanted? Great, you’ve probably got what it takes to develop a considered and appealing pricing plan that will better pit you against your competitors and give you the edge when compiling pitches.
Before we go on to how to decide what to charge, though, let’s talk about when to charge…
Retainers vs Project Work vs Daily/Hourly Rate
The first question to answer is whether the work you’re pitching for is going to be on a retainer, a piece of project work, or paid for by the hour or day. I’ve defined these below, and provided thoughts on who they’re most suited to.
A regular (usually monthly) payment provided for equal use of your time and expertise each month. You arrange with your client what this work will consist of and agree top-up fees in months where additional work is required. You can offer a retainer based on time spent per month or deliverables complete per month.
Which agencies are most suited to retainers?
- Startup agencies who are less experienced with billing and just want to get the ball rolling with clients for a general, uncomplicated fee
- More experienced agencies who have clear service products and know what they cost per month (they will likely offer project and ad hoc work alongside this)
- Agencies who are concerned with guaranteed cashflow into the businesses
Which clients are most suited to retainers?
- Businesses which have faith in SEO as ongoing service rather than a one-and-done operation (it may well be up to you to convince your potential clients of this)
- Businesses short on time and resources, who want to hand over the management of areas that require regular monitoring and attention, such and ranking and reputation performance
One-off projects that are performed for an agreed sum. Timescale and scope of work is agreed between client and marketer at the start of the project. Once the project is over, there is no guarantee of further work.
Which agencies are most suited to project work?
- Experienced consultants who thrive on variety in their work, and want to face new challenges with new clients regularly
- Agencies that specialize in a specific area of local marketing that doesn’t require ongoing management (e.g. local search audit, technical SEO audit, training)
- Startup agencies that want to experiment with different types of clients in different industries, in order to decide where their focus should lie
Which clients are most suited to project work?
- Businesses with a very specific problem to be resolved, likely within a specified amount of time
- Businesses with the budget to pay for the most experienced consultants and agencies in a given field
As the name suggests, this is a simple daily/hourly rate billed based on the time you spend working for a client.
Which agencies are most suited to daily/hourly rates?
- Senior consultants used to a very high salary for their expertise
- Agencies that manage staff workload by assigning billable and unbillable hours.
Which businesses are most suited to daily/hourly rates?
- Businesses with a simple but important request (e.g. investigation into dropped rankings or traffic) that isn’t expected to take too long
- Businesses that prefer to manage ongoing work at a more micro level and want to know exactly what they’re paying for
- Budget-conscious businesses with more knowledge of local SEO, and have a good idea of how long activities should take
If you’re the type to make highly data-driven decisions, then the below charts may help. They’re pulled from our Local Search Industry Survey 2020, which is definitely worth a read when you’re done here.
Here you can see that, of all the local SEO-focused agencies, consultants and freelancers we polled, the two types of retainer (based on deliverables/based on hours) are clearly the most popular solution. And it’s easy to see why! Most businesses, particularly fledgling agencies, need regular, assured income and the retainer is the way to achieve this.
The retainer also reflects the nature of local SEO work better. If you’ve convinced your client (rightly) that improving local search performance and using local marketing tactics to reach new customers and generate revenue is an ongoing project with no clear endpoint, then a monthly retainer is a natural solution that reinforces this strategy.
Those of you who stuck with me at the start but who are still holding out hope for a clear, easy-to-digest price to charge could do worse than take a look at the following chart.
If you want to use the size of your agency and the number of staff you have as prime factors for what to charge on a monthly basis, then there you have it. But I’d argue that what you charge your clients, regardless of how you charge them, really comes down to several key considerations, which I’ll go through below.
How to Decide What to Charge for Local SEO
Use the Local Search Industry Survey 2020 as a baseline
The BrightLocal research piece mentioned and linked to above really is a treasure trove of insights into what and how local SEO agencies say they charge their clients, so you should take the time to absorb it and try to use it as a baseline for your pricing decisions.
For example, in it you’ll learn that the average local SEO agency bills $127 per hour and the average local SEO freelancer bills $102 per hour.
You’ll also learn that the average monthly charge for reputation management is $359 (the median is $200) and that the average local marketer charges $389 for citation management work for a new client (the median, coincidentally, is again $200).
But that’s not all that’s included! If you’re looking inward and want to think about how much your time’s worth, there are interesting statistics on salaries, working hours and the job market. Plus, you could even use the survey as a baseline for your service offering, as it includes a section on the services most commonly offered by local SEO agencies and freelancers.
I hope that’s enough for you to take a deep dive into the useful figures and analysis of the Local Search Industry Survey 2020. Look out for another in early 2021!
What can you learn from the location of your client base?
If you’re planning on keeping your local SEO work, well, local, you’ll want to consider the economic geography of your chosen playing field, be that at a city or state level. There are a few factors here that can affect not only what you can reasonably charge but also what your clients can reasonably afford, regardless of how powerful your pitches might be.
As a local resident yourself, you’ll no doubt have an understanding of the local economy, what the wages are like around your area, and how profitable different types of businesses are. This needs to be factored into how you price your services, as being in a highly cosmopolitan area is likely to drive prices up, regardless of the quality of services received or offered.
When looking to understand exactly what local businesses are willing to pay, it can be tricky to learn to walk the tightrope of enquiry and snooping. But it can be done: consider holding or attending networking events and striking up conversations in local business forums online.
If you exercise tact and informality with your conversations and questions, you’ll get a feel for how seriously businesses are taking their online presences and how much they’re willing to put aside to improve them.
Another important, but somewhat less impactful, location factor is population and business density. If your client is the only dentist in the area, they’re not going to be hurting for local visibility or clients (however they might have got blasé and dropped the ball on customer experience, meaning that reputation management services might be suitable).
At the other end of the scale, larger cities can have dentists competing for local search visibility that differs every block. Suddenly the Local Pack becomes a turf war and rankings become more and more prized.
This is especially true when all competing businesses are firmly aware of the importance of reputation and have invested in it to the point that they’ve all plateaued at 4.8 stars on Google Reviews.
So you need to consider how valuable, and in-demand, different local SEO services are, depending on the population density and client’s sphere of influence. As we’ve just touched on, the industry you’re serving plays a big part in this, too, which brings us nicely on to…
What’s your specialism (and do you even need one)?
Perhaps less relevant for those just starting out with their agency, but very impactful when it comes to pricing, is how specialized an SEO agency or consultant is. This specialism, or focus, can be in:
- a particular discipline (e.g. reputation, on-site SEO, GMB management)
- a given industry (e.g. dental, medical, law, home services)
- sometimes both!
It’s generally considered that an agency or consultant that specializes in a particular field of marketing, and that has been around for a while, must have had enough success with prior clients to warrant this focus — it just makes logical financial sense. If you weren’t one of the best social media experts among your peers, why would you try to position yourself as such?
This naturally means that specialists tend to be more senior SEOs with a proven track record in their given field, a virtual rolodex of satisfied clients, and a healthy stock of testimonials and case studies. if this sounds like you, then you’re likely able to charge more for your time.
In a similar vein, specializing in delivering services to a specific industry or niche can help to elevate your status to expert, again based on the natural assumption that focus=experience.
However, specializing in a given field doesn’t require quite the same level of expertise and experience if you’ve chosen an industry with a very healthy competitive landscape in your chosen area. You’ll need to show that you’ve performed exceptional work for relevant businesses and that you clearly understand the unique local search aspects of your chosen industry.
Good examples of industries with specialist requirements in local search are law, medical and dental, service-area businesses, restaurants, and hotels. These requirements actually lend themselves, over time, to the additional development of a marketing discipline focus.
To put it another way, if you only work with restaurants, you’ll be dealing with review generation and social media a lot, so you’ll naturally hone your skills in that area!
Specializing in discipline or industry is a great way to improve the selling power of your services, providing you’ve taken a look at what’s feasible and relevant to your location (as discussed above).
Those just starting out on their agency journey, however, might want to start by developing a broader set of skills for a wider range of industries in the first instance, particularly as marketing is a holistic thing. Developing a true understanding of the gamut of local marketing tactics, from content to PPC to social media to GMB spam fighting, allows you to see how the puzzle fits together, so you can later focus on one particular piece.
Don’t be disheartened if you feel a lack of specialism means you won’t be able to charge a lot for your time, though. Remember the old saying, a ‘jack of all trades’ is a ‘master of none’? Well, how many businesses do you know that can afford one ‘master’ of PPC, another ‘master’ of on-site SEO, yet another ‘master’ of reputation management, and so on? Sometimes it pays to be the jack, provided that what you charge reflects your broader, but perhaps less deep, skillset.
If you’re looking to develop a specialism, take a look at the following research pieces from BrightLocal, which highlight which industries need help in which areas.
- Google My Business Insights Study
- Google Analytics for Local Businesses Study
- Google Reviews Study
- SEO Citations Study