How Do I Monetize A Local SEO Gig?

So I have been approached to make a site and do SEO for a local business in town. I have never done this type of work before and am not sure what to charge.

It looks hopeful since I have found a keyword (city+service) that has more than 5000 exact matches with the top 10 sites being all PR 0 with 21 or less backlinks all of which are about 3 years old or newer. I believe I could create quite a bit of traffic for this business.

I am going to set up a simple wordpress blog which I would have complete control over as they don't care what it's like as long as there is a way of generating leads on the first page.

I'm not sure what to charge. Is it best to have a monthly fee? Do I charge per lead? Do I charge per new customer?

Edit: In case it helps... typically they receive around $75 for every customer that comes to them.

Does anyone have any experience with this or have some suggestions? I could really use some insight. Thanks

I would charge around $2000/month until they hit #1 and either work on another keyword for them or charge $500 a month after to maintain their position for them. You could also dominate the top three spots and charge them per lead at about $20 per.

Start high because you will be very mad if you get Crap pay for valuable work.

Thanks for the reply. I don't think they have a $2000 per month budget at the moment.

I have had further discussions and we might make a per lead/customer type of deal.

I have already been given money to just set up the basic site as well as a few commissions from things like hosting.