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34% Of Local SEOs Make Less Than $30,000/Year. Why?

As the local search industry evolves and becomes more complex, the role of local search consultants and agencies becomes more critical. Complexity is increasing across most areas of our fast-growing industry, which makes “local search” all the more confusing for local business owners.

This complexity is driving increased demand for local search services. SMB owners need local specialists to decipher the multiplicity of factors and opportunities available and to guide them through the tangle of local search.

Why, then, with this increase in demand, are so many earning less than $30,000/year and having to sell their services harder than ever before, according to our findings?

My theory is that there is a glut of search providers in the industry, which is driving up competition and pushing down prices. It’s a growing industry which attracts new people to it every day. Given the complex nature of local search and the required skills and experience to be good at it, these lower prices make it difficult for many SEOs to make a decent living.

After all, being a consultant or agency is about much more than just doing the job — you need sales expertise to land the client in the first place.

The “Joy” Of Sales & Leveraging Relationships To Win New Customers

The stats I’m citing come from a webinar my company (BrightLocal) recently hosted, which looked at sales strategies and tactics for local search agencies.

During the webinar, we asked the 500+ attendees to answer three questions about their attitude and tactics for selling their services. We have coupled the results of this small survey with some insightful sales and marketing data taken from the 2013 Local SEO Industry Survey(conducted in Jan-Feb 2013). Below, the results.

Q. What Was Your Turnover In The Last 12 Months?

  • 34% of the SEO respondents’ turnover was less than $30,000
  • 17% said that their turnover was above $500,000

    What was your turnover in last 12 months? chart

    Source: BrightLocal Local SEO Industry Survey 2013 (1,150 respondents)

Comment:

There is a broad range of earnings in the industry, but a high number of consultants/agencies earn very little for their services.

This could be a symptom of too many providers entering the industry and competitive underpricing of services. It highlights how important effective promotion is to the success of agencies. Just doing the job isn’t enough, you need to ‘sell’ your services to stand out from the competition.

Q. Which Channels Are Most Effective For Attracting New Customers? (Select Up To Three Channels)

  • Three of the most effective channels for attracting new customers are offline channels
  • Word of mouth is the most effective channel – 91% said this brought them the most leads, while SEO was the 2nd biggest driver of leads and customers (46%)

Which channels are most effective for new customers? chart

Source: BrightLocal Local SEO Industry Survey 2013 (1,150 respondents)

Comment:

Relationships and reputation are the key to winning new customers in the search industry.

The four most effective channels are all focused on establishing or leveraging relationships and building a positive reputation for yourself, which encourages local business owners to put their trust in you.

Three of these channels are offline channels, which hammers home the importance of establishing real relationships even though we’re selling digital services.

I really like the idea of local meet-ups. They are a great platform for you to demonstrate your knowledge, offer value to potential customers and “press the flesh” to build those nascent relationships.

Q. How Many Leads Do You Proactively Contact Each Month?

  • 32% of SEOs don’t make outbound sales enquiries (down from 46% in 2012)
  • 11% of SEOs make over 50 sales enquiries each month

How many leads do you contact? chart

Source: BrightLocal Local SEO Industry Survey 2013 (1,150 respondents)

Comment:

Fourteen percent more consultants are engaging in outbound sales in 2013 vs. 2012, while many more agencies have ramped up their sales activity to contact 50+ customers each month. This increased focus on sales is further evidence of the competitive landscape we work in.

Looking at the ‘Marketing Channel’ chart above, only 20% of SEOs said “outbound calls” was an effective acquisition channel. So, increased time spent on this may not yield the best results for agencies — they’re better off focusing on fostering existing relationships and building a physical, local network to reach local business owners.

Q. What Is Your Success Rate At Converting Leads To Customers?

  • Average conversion rate = 42%
  • Conversion rate dropped from 2011 to 2013

what is your success rate at converting leads to sales? chart

Source: BrightLocal Local SEO Industry Survey 2013 (1,150 respondents)

Comment:

Average conversion is pretty strong in the industry (most sales people would be happy with a 42% close rate). However, in comparison to 2011, the conversion rate has dropped — further evidence that selling search services is getting harder (for some businesses, at least)

Q. How Do You Rate Your Sales Ability?

  • 65% of respondents said they were quite good or very good at sales
  • 29% said they were not good bad or very bad at sales
  • 6% said they didn’t know

How do you rate your sales ability? - chart

Source: BrightLocal Local SEO Industry Survey 2013 (1,150 respondents)

Comment:

The ability to confidently communicate and “sell” yourself is essential to the success of any service business. But sales isn’t simply about picking up the phone and plugging your offering to anyone who’ll listen. It’s about understanding the needs of potential customers, matching your services to those needs and building a relationship with the customer.

As consultants/agencies, there are two sides to the job we do – selling our services and delivering the work. You can’t have one without the other (not long term, anyway) and, truth be told, not many search marketeers are good at both.

If you love doing the work but get a cold sweat at the prospect of picking up the phone or hosting a local meet-up, then you need to overcome those doubts ASAP. Or find an alternative way to promote  yourself — it’s time to leverage those existing relationships and build up your reputation so customers come to you rather than you approaching them.

Q. Which Part Of The Sales Process Do You Find Most Challenging?

  • 32% of respondents said they found prospecting the most challenging
  • 31% said they found getting past the “gate keeper” most challenging
  • 25% said they found closing the sale the most challenging aspect

Which part of sales process do you find most challenging? chart

Source: InsideLocal Webinar: Effective Sales Strategies for Local Agencies (383 respondents)

Comment:

It’s no surprise that where most people struggle with sales is at the start and at the end of the process — these are the high pressure areas.

Seeking out the right prospects to contact and then getting a meeting with the decision maker is vital but also a challenge. Most people are fine once they’re in the room and able to present their services and handle questions.

The key with sales is to offer value to the person you’re pitching. To get the meeting, you need to convince her that a meeting with you is worth its weight in gold, or at the very least 60 minutes of time well spent.

You need to turn the emphasis on to them. You’re not trying to sell your services;  you’re trying to solve their problems and make their life better.

It’s at this stage where relationships and reputation help enormously. If you come to them with a personal endorsement or a contact in common, it breaks down those initial barriers and makes getting that first meeting much easier.

Q. Do You Enjoy Selling Your Services?

  • 56% of respondents don’t enjoy selling their services
  • 44% of respondents enjoy selling

Do you enjoy the sales process? - chart

Source: InsideLocal Webinar: Effective Sales Strategies for Local Agencies (412 respondents)

Comment:

If working on sales doesn’t come naturally to you, it’s hard to turn it into something you enjoy. You need to find a way to enjoy it or gain some satisfaction from it — or hire someone else to do it for you. Having a good, robust sales process is essential; this removes much of the fear and frustration, allowing you to execute a clear, ordered plan each time.

 

About The Author:  is Founder & CEO of BrightLocal.com. BrightLocal provides local SEO tools for local businesses; see their Research section for the latest findings about the local search market. 

How Much Should You Spend on SEO Services?

Nearly every business today must decide how much to spend on search engine optimization (SEO). This isn’t an if question. Robust online marketing is imperative for survival in a web-driven world.

The question every business professional must ask is, “How much will we spend on SEO?” Keep reading for all the information you’ll need to make that decision, plus some helpful tips on how SEO agencies work so you can be successful as you forge a crucial partnership with an online marketing firm.

SEO Payment Models

To understand the dollars and cents discussed below, you must understand payment models used by agencies. SEO agencies typically offer four main forms of services and payment:

  • Monthly retainer: In this model, clients pay a set fee each month in exchange for an agreed-upon array of services. The monthly retainer is the most common payment model, because it provides the greatest ROI. Monthly retainer arrangements usually include regular analytics reports, on-site content improvements, press releases, link building,keyword research, and optimization.
  • Contract services at fixed prices: Nearly all SEO agencies sell contract services. Often, before a client is ready to engage a monthly retainer, they will select contract services that they want to have completed. The services that an SEO agency offers are often advertised on their site, along with a price. A typical example of this is an SEO website audit which can help determine existing strengths and weaknesses in the client’s online presence, competitive analysis, as well as keywords that have the highest potential to return positive ROI.
  • Project-based pricing: Project fees are similar to contract services with the exception that they are custom projects created specifically for a client. Pricing varies according to the project. For example, a local cupcake shop may ask an SEO agency to help them with theirlocal online marketing. The client decides that they want the agency to establish their social media accounts. The cupcake business and the SEO agency will decide on the scope and cost of the project.
  • Hourly consulting: This familiar consulting model is an hourly fee in exchange for services or information.

Most SEO agencies use all of these payment models. Likewise, clients may work with an agency using more than one model. For example, a client may choose to enter into a monthly retainer, purchase a contract service, and engage in a special project with the agency, thus entering into three of the payment models.

Typical SEO Costs

So, what should you expect to pay? Here’s a survey of the range of the costs according to the payment models described above.

  • Monthly retainer: $750-5,000 per month. Within this range, the amount that a client pays depends on the size of their business and the extent of services provided by the agency. On the lower end of this spectrum are small SEO agencies that offer a limited range of services. On the upper range are businesses with greater needs working with full-service SEO agencies. Most businesses pay between $2,500 and $5,000 for a monthly retainer.
  • Contract services at fixed prices: price variable. Businesses that are just testing the waters in SEO usually choose a contract service as an entry point. Typical contract services include things like SEO copywriting ($0.15-$0.50/word), site content audit ($500-$7,500), link profile audit ($500-$7,500), and social media site setup ($500-$3,000).
  • Project-based pricing: price variable. Since there are a variety of projects, there is a wide range of prices. Most projects cost from $1,000 to $30,000.
  • Hourly consulting rate: $100-300/hr. SEO consultants, whether individuals or agencies, usually charge between $100 and $300 per hour.

(Some of these figures are taken from a 2011 SEOmoz survey of 500 consultants and agencies.)

Things You Should Be Suspicious of

Any discussion of SEO agencies and pricing isn’t complete without a few warnings. To help you guard against indiscriminate SEO agencies with unethical business practices, read and heed. Be suspicious of the following promises:

  • Guarantees. SEO firms generally can’t provide guarantees due to the constantly changing nature of the industry.
  • Instant results. True, some SEO tactics can get “instant results” by gaming the system. Be warned that these can hurt you in the long run. Instant results often involve SEO practices that are against webmaster guidelines put out by search engines. Invariably, Google seeks out these techniques and penalizes them, resulting in lost rankings that can take months to recover.
  • #1 spot on Google. If an agency promises you the number one spot on Google, it sounds great. Hopefully, you’ll be able to get it. However, it’s not something that a firm can promise to hand over to you.
  • Costs lower than $750/month. When it comes to SEO, you aren’t shopping for the lowest price; you’re seeking the best level of service. Be wary of rock bottom prices or “unbelievable deals.”
  • Shady link building services. Link building is a crucial part of SEO. You can’t have a highly-ranked site without inbound links. But there’s a dark side of link building. Link trust is gaining importance to appear high in the rankings. Before you enter into an arrangement with an SEO agency for link building services, ensure that their link building services are ethical, white label services. You may even wish to ask them where they may be able to gain links for a business in your industry.

Things to Keep in Mind

As you begin shopping for SEO agencies and making your decision, be mindful of the following points:

  • SEO takes time. A monthly retainer is best. Think of SEO as a long-term investment. Aggressive campaigns and major pushes may have their place, but the most enduring SEO results come from a long-term relationship. In SEW’s Mark Jackson wrote, “The real value of SEO efforts are, generally, not realized in the first month(s) of the effort.” It’s true. SEOs don’t wave a magic wand and get instant results. Instead, they perform extensive operations that will produce results months down the road.
  • SEO changes, and your rankings will change, too. The field is full of competitors, and rankings rise and fall with the changing of algorithms and the entrance of new competitors. One-and-done SEO tricks simply don’t work. It takes constant monitoring to keep your website ranking well and performing at top-notch levels.
  • Not all SEO services are created equal. Again, SEO isn’t about shopping around for the lowest prices. It’s about finding the finest agency you can. Look for an SEO agency that defines its scope of services, and takes the time to educate you.
  • SEO is important. Do it. The point of your website is to increase and/or improve your business. Unless people are finding your website, it’s not even worth having one. The smart thing is to pay what it takes to keep your site findable by the people who are looking.
  • Hiring an SEO agency is best. You may be thinking, “Can’t I just do this SEO thing on my own?” A tiny percentage of business owners or professionals have the skill and savvy to do their own SEO. Even so, comprehensive SEO takes way more time than most business owners can afford. Even an employee who “knows a lot about SEO,” will be hard-pressed to deliver the level of services and excellence found in a SEO agency. You’ll rarely come out on top if you try to go it alone, and you’ll never get the same level of ROI that you would with a competent SEO agency.

You Decide

For most businesses today, SEO is the highest ROI marketing effort. The benefits it provides exceed the value of other marketing approaches – direct mailing, broadcast advertising, online ads, etc.

No longer do businesses decide whether they need SEO services. Instead, they decide how much they’re going to spend. As long as they choose a quality SEO agency, their decision will lead to incredible amounts of revenue.

You can decide how much that’s worth to you.