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Trending price drops for Local SEO companies

Discussion in 'Offline Marketing' started by Dreamz, Apr 30, 2013.

  1. Dreamz

    Dreamz Newbie

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    My company has been undercut on several recent SEO proposals. Undercut in a big way. Our current clients pay between $900 to $2400 a month for SEO 6 to 24 medium to high comp keywords, with constant A/B testing for lead conversions.

    Lately we're being undercut by as much as 90% in luxury industries such as top end restaurants where the avg min table spend is over $500.
    We generally are told if we come in at the same price they'd go with us. Which we dont do, we honestly wouldn't be able to maintain quality work for such a low amount.

    Has anyone noticed a huge drop in competitor pricing among SEO companies?

    How are these companies offering $100 to $300 for SEO for 12 to 24 keywords in a medium to high competition niche?
     
  2. pokerjk

    pokerjk Senior Member

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    Sure it happens all the time. Then in 6months time once their contract is up ask them hows it going (not well) and ask to catch up with them.

    How are they offering services for $100-$300? What they get for that will be shocking, don't lower yourself to that level stay strong and product quality results. You'll come through better in the end compared your competitors that way.
     
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  3. the_demon

    the_demon Jr. Executive VIP

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    It's a loss leader approach, you loss money to get them on board with the hopes of up selling them. It's a common practice. A good example is the iPhone, apple makes money on the phone contracts not so much the device. It can be a risk business, but if you play the odds right, you can stand to profit greatly.
     
  4. dotcomdesigns

    dotcomdesigns Power Member

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    Those companies working for $100-$300 are probably buying fiverr gigs. When your clients sites have been destroyed, they'll be back. Up your prices to repair the damage caused by these Mickey Mouse operators. Never has the phrase 'you get what you pay for' been more relevant than in SEO services.
     
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  5. imperial444

    imperial444 Elite Member

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    How the high end restaurants get fiverr-type of SEO services? Where do their managers are looking at? I would explain it to their managers in the most detailed way if they would ever wanted their website to stay there.
     
  6. nanavlad

    nanavlad Jr. VIP Jr. VIP Premium Member

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    Just write to them and say thank you for your business, I understand that in this maRket we alL try to cut cost.

    I even go to McDonalds myself now and then, While my clients might appreciate the prices, T long term results might not be so plaatable

    I wish you all the best, If you are ever in need of my services again Please feel free to call on me anytime
     
    Last edited: May 1, 2013
  7. Dreamz

    Dreamz Newbie

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    Thanks guys, reading the responses got my thinking back on track.

    Re learned a leasson I picked up when I first started selling SEO. Never refer to my business as an SEO business. To many potential clients have had bad experiences with so called "SEO experts" Every shitty web developer that took a weekend course thinks they are SEO experts by throwing in some meta tags.

    What do guys think a good tag line is to differentiate oneself from being lumped together with all the SEO hacks?

    Digital Marketing? Internet marketing...
     
  8. Alinea

    Alinea Junior Member

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    Explain the consequences of going with a "cheap guy" and what those guys may be doing and how it can actually be damaging. Use your current/past clients as proof. Ask them what these cheap guys are doing - what did their A/B split testing demonstrate? Oh, they didn't do that?
     
  9. mudbutt

    mudbutt Jr. Executive VIP Jr. VIP Premium Member

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    Most of my clients are sub $300 and we provide a good service. Our margins are smaller then someone charging more, but we make it up in volume.
     
  10. krzysiekz

    krzysiekz Senior Member

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    From memory you were in to lead gen., is that right? If so, how is it going? I remember back in 2011 when I was doing some lead gen. for local businesses, you were doing the same. Maybe my memory is wrong, though.

    In either case, while you can grab a client for $300/m, I would only ever do that for the first few (if any). In my limited experience, you get more complainers when you price the service low. I have not dealt with a large number of clients, but this has shown to be true even with my really small sample size of clients.

    In two cases where I tried to offer a lower price, down to a level where the client was happy with it, both clients have turned out to be bad in many respects. Maybe 'bad' is not the right term, but it's as if they no longer value my time as much. They would call to make changes to their website (that we not part of the deal) or call to just waste my time in general. Also, at the brink of any type of negative change in SEO rankings (even minor) they are the first to complain.

    So, I would go for the $300-$500/m mark for starters. Get my feet wet, get things working, build a small portfolio. Then I would start going for $1,000/m clients and beyond. I'd rather work a little harder at the onset in finding myself a $1,000/m client, than doing (probably) the same amount of initial work in getting 3 clients to pay me $1,000/m in total.

    Then obviously you need to deal with a larger quantity of clients if selling for cheaper. But I guess there are benefits, as $300/m allows smaller businesses in, where $1,000/m does not. Take your pick, I say.

    Anyway, it should be fairly easy to get out of your situation. Tell them what you get when you hire a crappy SEO team. Even though we don't know if these guys are crappy, they very well could be. Inform them of penalties that can hit your website, and be very long lasting, and not to mention - devastating to profits. You get what you pay for. Pay for low quality (again, we're assuming) and in a few months to a years time, they may find out any money they saved is nullified by the money they've lost through foregone profits. Unfortunately, if they don't listen, this lesson will likely at some point become a reality for them.
     
  11. OregonDuckingIt

    OregonDuckingIt Newbie

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    Your tagline should be whatever it is that you do differently from your competition... ie, your USP
     
  12. mudbutt

    mudbutt Jr. Executive VIP Jr. VIP Premium Member

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    We have ~800 active billing accounts at any given time so definitely not new to this game. We get complainers at all price points. Someone paying 1000/m doesn't magically give less fucks than a guy paying 300 about where their advertising dollars are going and will be just as quick to issue a chargeback if something doesn't meet his expectations. Its all about setting expectations during the sale process (easier said than done as sales reps are always trying to hit their daily nut and will likely oversell). Low volume-high cost vs Low cost-High volume ; theyre just two different business models with pros and cons for each.
     
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  13. krzysiekz

    krzysiekz Senior Member

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    You seem to be doing superbly well. Good work, keep it up.

    Have you changed your mindset about the offline sector? I recall sometime ago that you responded to a thread saying something along the lines of "unfortunately being involved in the offline" world. Probably doesn't fit too well into this thread and I'll stop after this post - but would be interested to see if your opinions have changed since that time (as you seem to be doing extremely well).

    Fair point regarding high volume-low cost vs. low volume-high cost.
     
  14. Dreamz

    Dreamz Newbie

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    I believe the complaining happens from the size of the business + price. A medium size business is typically used to working with a marketing budget where a small business may be taking that $300 out of their pockets.