SECTION TWELVE of the ULTIMATE SEO FREELANCER GUIDE - THE REALITY!
What and how should an SEO freelancer charge?
This is such a HOT topic within the SEO freelancing world, and everyone has got a varied opinion on this.
The fact is…
There is no right or wrong when it comes to SEO freelancing rates.
There is only…
What works best for you.
Having said that, I do want to outline a few options for you to think about…
Option 1 – Charge per hour
This is the direction most freelance SEOs go down as it is easy. You charge (usually between £40 to £150 depending on your service offering, location, and your level of expertise and experience) per hour.
So, how do you get yourself into a position where you can charge £150 per hour?
> Great proven track record.
> Trust factors.
> Offering real value and not just a checklist of SEO tasks.
> Ability to deliver on your promise.
What are you worth per hour?
That all comes down to the value-add you are providing your clients. If the work you do ‘directly’ impacts an increase revenue growth of seven-figures, then you are worth much more to your client than an SEO who just completes a list of certain tasks which increases your client’s revenue by a few thousand.
The downside to charging per hour is the fact that your earning potential will always have a maximum ceiling. That ceiling though might not be as high as you imagined it to be.
Let’s say that you decide to work 40 hours per week and charge a flat fee of £50 per hour (to keep the maths simple). You might think…
‘If I fill my diary up with paying clients, I will generate £8K+ per month, which is a lot more than I ever earned in my 9-5 job. Happy days!’
NO, NO, NO…
Unfortunately, that is not the reality.
For the simple fact that you are no longer an employee. You are a business owner of your one-person agency, and as the business owner you must also run your business. You are no longer just an SEO… You are also the marketing person, sales person, admin, customer service, debt collector, etc…
All this extra stuff you are not used to doing takes time.
How much time are you going to devote to driving and converting new business? Remember, as the owner of an SEO freelance business selling hours, you don’t actually get paid a penny for all the hours you spend on everything outside of physically doing the SEO.
Suddenly, that £8K per month will realistically look more like £4K and the only way to increase that amount is to do more and more hours tipping your work / life balance heavily towards work.
Just be mindful of factoring in all the unpaid hours as well as all your business expenses when you work out your hourly rate and maximum number of hours per week you are prepared to work.
At the beginning of this SEO freelancer guide we discussed your – SURVIVAL FIGURE
Does your earning potential exceed this?
Option 2 – Charge based on value
This is where a lot of SEO freelancers struggle with. It really comes down to the following key questions…
1. Can the service you are providing be done by any other SEO with a fundamental set of SEO skills? If so, your client will not see the value and you are best sticking with the pricing per hour option.
2. Is the service you are providing helping the client to solve their SEO related problems and helping to get them closer to achieving their business goals and objectives?
3. Do you track the ROI (in money) of the service you are providing?
If you answered ‘yes’ to both points 2 and 3 above, then you are in a good place to charge based on value.
So, how do I know what to charge, I hear you say?
Again, this all comes right back to your value-add. What is the benefits to your client for paying you £xx,xxx? In order to charge based on value, it is VITAL that you can state the benefits. Once you have your list of benefits that are in-line with your clients business goals and targets, only then can you start.
OK, I have everything you have mentioned above. What now?
The way I see this, you have five options…
Value pricing option 1 – Retainer
Agree a set monthly retainer to help the client to achieve their organic-led business goals.
Value pricing option 2 – Retainer + Bonus
Agree a monthly retainer amount attached to set targets you need to meet within a certain timescale. Once (I say once as you should be confident that you ‘will’ achieve those agreed targets) you achieve the set targets within the agreed timescale, you will receive a pre-agreed bonus figure.
Value pricing option 3 – Project based
Do all your research, analysis and map out a 12-month SEO plan. You then split this plan into 4 quarters and each quarter is a set project. Based on the workload of each quarter project will depend on how much you charge. You can then agree a payment term of 50% up-front and 50% on project completion each quarter.
Value pricing option 4 – Based on projected ROI
If you can put together a proposal that demonstrates a solid return on investment, you are more likely to get your contract signed and receive a higher rate than if your prospect (potential client) receive a proposal that is just based on rankings and technical jargon.
I have a straightforward way of working out and documenting the potential ROI within a proposal and it goes like…
You need four key numbers first though. If your potential client is serious about pushing their business forward using the power of content and SEO, then they will be happy to provide you with these figures. Just ask…
1. What is your average customer worth?
2. What is your lead-to-sales conversion rate?
3. Over a six-month period, how much do you need to increase your revenue by to see this SEO campaign as successful?
4. What are you prepared to pay each month in order to make this happen?
Again, to keep the maths simple, let’s assume…
> Their average customer is worth £1,500.
> Their lead-to-sales conversion rate is 20%.
> They have stated that you need to increase revenue by £20K per month.
> Their accepted investment level to make this happen is £2,500 per month.
Over a six-month period, you need to generate 80 new customers to meet your target set above. [Calculation: monthly revenue times 6, divided by average customer amount].
We know that they convert around 20% of all leads they receive. In order to secure those 80 new customers, you need to generate 400 leads over the six-month period. [Calculation: 80 times 100, divided by 20].
A decent website with great ‘helpful’ content realistically converts 5% to 10% of all targeted visitors into leads. If we use the lower percentage just to be on the safe side, we need to generate 8,000 visitors during the next six months. [Calculation: 400 times 100, divided by 5].
That averages out at around 44 visitors per day. [Calculation: 365 days per year. Half of that is about 182. Now divide 8,000 by 182].
That is how you work out the ROI for each prospect. Easy, wasn’t it?
Consider though that those 44 visitors per day are over a six-month period. It will take a while for you to start generating a constant flow of new visitors but when you actually split it right down, like in the example above, it sounds so much better than just sending a proposal stating...
“I will increase your rankings for these five keywords and it will take six months to get to the No.1 position.”
Value pricing option 5 – Based on new customer growth
When I was freelancing, I had a rule that changed everything for me and allowed me to easily generate a six-figure income…
Drum roll please…
I would ONLY work with businesses whose average customer value was four or even five figures.
Forgetting about SEO and put a business head on…
Let’s say that each new customer you generated for the client was worth £3,000 to them and their profit margin was 50%. That is a pre-tax profit of £1,500 for each new customer you help to generate.
If you agree with your potential client that JUST 10% of their PROFIT amount per customer goes towards content and SEO, that is £150 per every new customer you help to generate.
Your earning potential is then only dictated by the number of new customers directly generated through organic growth. You will, however, need to make sure that you have solid tracking in place.
Has these five value pricing options got your mind spinning into overdrive?
It basically comes down to how good of a business-focused SEO you really are.
How does an SEO freelancer generate a six-figure income?
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Re-visit a previous section:
Section 1: SEO freelancing stories
Section 2: Before you jump ship into the world of SEO freelancing
Section 3: Being a full-time SEO freelancer is a business, not a hobby
Section 4: Be realistic about your own SEO skillset
Section 5: Understanding who your clients are
Section 6: Test the water before fully jumping into the full-time SEO freelancing life
Section 7: Be very mindful of – The promise trap
Section 8: Skills an SEO freelancer must have beyond just SEO
Section 9: The SEO freelancer payment terms
Section 10: Creating the perfect work / life balance
Section 11: Build a freelance support network around you