Budgeting is one of the most challenging aspects of working with a white label SEO partner. In this Daily Brown Bag, we share five tips to help you price your white label SEO products and services so you can attract customers and stay in business.
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Hello and welcome to the Daily Brown Bag. Today we're talking about pricing white-label SEO services so that you stay in business. I'm Chad Hill and I'm joined by Adam Stetzer.
Hey, good morning Chad. Staying in business, definitely a great topic for today and when you're working with a white-label SEO provider, pricing is a very complicated issue. We spend a lot of time in these Brown Bags, in our forums, in our webinars, talking to SEO resellers about the mechanics of SEO, search engine optimization, backlinks, the upcoming Penguin release, the Panda release we recently saw. But really on the business side pricing is a whole other animal, Chad, and we've really got to get into this because you're right. If you mess up pricing your search engine optimization product in the small business market you could drive yourself right out of business and we don't wanna have that happen. So let's just start with a general statement and then let's dig in with some specific tips and tricks for our viewers today.
First of all, we generally recommend marking up our white-level SEO services 50 to 100%. I see a lot of people write about that 100% level, Chad. They take our wholesale prices and they double them and offer that at retail. But that's just a blunt rule of thumb, we have all sorts of resellers, they have all sorts of different customers, different budgets, different expectations. Those businesses are in different stages of growth, so this is definitely something that has nuance and you can't paint with a broad brush. So Chad, how can we help our SEO resellers really think this through?
5 Tips to Help You Price Your White Label SEO Products & Services
1. Start With a Competitive Analysis
Great question. I think it always starts with a competitive analysis, so you wanna go out and look at who are you competing with in your market and what do they charge for their services? And then specifically how are they packaging their services, are they doing sort of an all-encompassing program that has pay per click SEO website development, are they selling point services? You need to really understand that and you want to be able to have an apples to apples comparison. Because in SEO, we've talked about this many times, there's a lot of window dressing and so even though someone may have a very long list of things that they're doing, when you actually look at the work going on it may be that there's not a lot happening or maybe there is a lot happening. So you need to break it down and really understand apples to apples what's going on. And then from there you need to look at what's gonna really set your business apart or makes your business stand apart. Do you have industry expertise that someone else doesn't have? And then from there you can kinda say what price can you justify. Is it that 100% markup or are you adding special things on that might even justify a higher price or maybe you wanna charge a little under 100% markup.
2. Take a Look at the Types of Leads Coming In & Any Current Customers
Excellent. So you understand the competitive landscape, I agree that's the place to start. Step 2: Now look at your customers a little more closely and analyze them. What kind of leads do they have coming in today, what are their aspirations for new leads, what does their customer base look like, what is it exactly they value in a marketing process and remember that price is mostly about value. The value you're going to bring to that customer. So you may have done this competitive analysis as Chad said in step 1, but then you might get to a customer and it just doesn't ring true for them because the competitors have positioned it in a way that doesn't emphasize the value for your customer. So it's only by understanding what they need, what they can afford, developing some realistic expectations, you're gonna hear us say that over and over again. Don't oversell this thing, try to offer something that's actually gonna work for them and meet their expectations.
3. Listen to Your Customers and Prospects
The third thing you wanna take a look at when you're setting your price is you wanna listen to your customers and your prospects. So you don't really wanna pitch what they don't need. If you're bundling in a bunch of stuff that they don't want, of course you're gonna look less competitive against a point service offering that they may be comparing you to. They really are seeking your advice and your expertise and that's something you can't underestimate when you're talking about these Main Street customers. They're typically not super savvy about digital marketing, that's why they're hiring you, so make sure you understand what they need when you're building out your pricing. Good customer service really does start the minute that lead comes in. If it takes you a long time to get back to the lead it's an initial sign that maybe you're not going to be as easy to work with as you wanna send the message that you are. So make sure that you really are responding quickly to needs in the sales cycle. And then, as we know and talked about many times, it's always more expensive to get a new customer than it is to retain one, so look at your current customers and maybe there are opportunities to sell more to your current customers.
4. Start Small
Number 4, Start small. And I know this is one thing that a lot of people will say, "Ah, swing for the fences, go big." But really I think it's really important to establish a result and to build trust with your client and then a bigger relationship will come. I've seen multi-million dollar contracts, Chad, that started with a $10,000 consulting engagement. So you can grow things by an amazing magnitude if you get those expectations right and you produce. And that trust starts to build, they will come back again and again, so don't be afraid to start small.
5. Know Each Customer
And the last one is know each customer. So you really wanna look at considering how long the ROI will take based on the competitive analysis that you've done. It really, even though you want it to be one size fits all, there are so many factors that will lead to one client's ability to see shorter term results than another, so be very sensitive to that when you're putting together your pricing and your recommendations in a proposal. Those are the 5 things we've got here on when you're really looking at how to set the price for the white-label SEO services you're offering.
Pricing Models & Contracts
We want to transition here into talking about some different pricing models that many people have tried. So there's a whole bunch of different ways that people will price out marketing services. There's a pay-as-you-go model, there's a flat fee model, there's tiered models where maybe you wanna present your services in different tiers: good, better, best. You might even have some room...you might even wanna leave some room in your prices for negotiation, or will you allow negotiation on the prices. Then again, are you willing to stand firm on your prices or not? So we typically have always thought that the best way to approach it is to look more based on client's objectives, and then setting a budget based on what their objectives are. But we also have many resellers who will focus more on initially understanding what the budget is and then providing expectations or giving goals that are appropriate for that budget. So when we look at ways to price it, we typically are on a monthly recurring revenue with some type of contract that's gonna lock them in for 6-9 months because if they're not willing to commit to that type of investment, in SEO especially, then you really are gonna have some problems showing that ROI. So if they do come back to you and say, "I want 30 month out," you might wanna say, "Look, if your time horizons are much shorter, we might wanna put you towards pay per click." But In general again, we're on a monthly recurring cycle is what we've found to be the most effective thing. And then making sure you get some type of contract, 6-9 months, with 30-day termination after that is our recommendation.
Excellent. And I'll just close on that point on contracts, Chad. You know a lot of people think they're just nice to have, but once you've got that pricing nailed down, have a contract. Get a template from somewhere, they're not hard to find. We have them, other people have them and make your client sign them. I know a lot of people take a lot of pride in saying, "Oh, I do business on a hand shake," but that just doesn't work. If you're gonna build a real business and have a sustaining revenue flow, you need to have a little bit of formality. And actually it's expected. Real business people work with real contracts, it really specifies what your obligations are to each other. And don't start work until you sign them, because you're also sending the message that, "I'm serious, you can hold me to what I'm promising to do for you, but I'm gonna hold you to paying me on time and doing the things, giving me the information that you need to provide." It's a very important part of establishing those expectations of how the trust is gonna work in that relationship, which again, even if you're starting small will help you build up to a very large engagement.
Well, that's our coverage today for how to do pricing for white-label SEO services. We hope this has been helpful and as always, if it has, we ask that you hit that subscribe button and join us here for another Brown Bag.