Industry Track, Wednesday 3:15 – 4:30 PM
SEM Pricing Models
Moderator: Misty Locke, President, Range Online Media
Rand Fishkin, CEO, SEOmoz
Lance Loveday, President, Closed Loop Marketing
Ken Jurina, President & CEO, Epiar
Mike Murray, Vice President, Fathom SEO
Rand Fishkin started the session off running through the different pricing models available for SEO and SEM agencies He didn’t do too much commenting on each, just providing a basic synopsis of how each might work. Rand then provided some samples of pricing that he’s done for some of his clients. Most were for short-term work, consultations and training. I enjoyed the honesty Rand provided discussing some of the pricing issues he’s struggled with. He noted that you can benefit more by selling SEO “products” rather than just services.
Lance Loveday talked primarily about pricing models for PPC. The goal of pricing is to minimize the downside and maximize the upside, but ultimately do what works best for the client. Simplified pricing models are best. I like what both Rand and Lance said about the pay-for-performance or CPA model, in that you are put in a position of having to do your client’s accounting and rely solely on the quality of the tracking mechanisms in place. Not a good place to be. Lance tends to do fixed set-up fees and percentage of spend.
Ken Jurina answers the question, how should you be charging for SEM work? The answer is the way that makes you the most profit and provides the client the most value. Ken does not recommend trying to do all things, but to focus on a niche that you enjoy and are good at. If you’re established you can price based on what the market can bear. If you’re new, price to survive. He noted something that we have noticed over the years is that as pricing goes up, the client pettiness goes down. Ken recommends being very open with your clients with what you are doing for them. Keep the lines of communication open.
Mike Murray gave some great examples of bazaar pricing models and then delved into some of the pricing models already discussed providing pros and cons. They rarely do custom pricing models just because they lack consistency in both the plan and the profits. He likes posting prices so visitors can see and save the call if it’s out of range.
This was a great session, very informative. Leaving here I’m more pleased with the pricing models we have than before (not that I wasn’t happy with them before.) It’s nice to get that kind of affirmation!