I hate doing dishes—much more than the average person. If I do dishes, I will purposely drag my feet, taking three times as long as my husband. My laboring delay is partly for pity and partly hoping for any excuse to abandon the task to arise. And with a new baby, it’s often just a matter of a few minutes until I am rescued by screams or whimpers. My husband, a sports fanatic, would say that I struggle mightily with dishes—a phrase often used by sports announcers and one that fits my failure to thrive at dishwashing just perfectly. But, what does my dish-taste for the chore have to do with SEO pricing? I’ll explain.
Project-based consulting pricing is a very commonly used pricing structure for SEOs that, if applied to doing the dishes in my family, would allow me to price the chore based on my time and effort input while the person footing the bill avoids paying me more because I’m slowly dragging through the project. I give a flat fee for dishwashing; they can compare to my competitors and take it or leave it. A real win-win situation if things are done right.
What is Project-Based Consulting Pricing?
The name really does give away the punch line; project-based pricing is an all-inclusive price structure that gives one flat fee for a specifically defined project. It’s commonly used by SEOs because it’s a simple and well-defined way of dealing if the agreement is structured correctly.
This flat fee is based on a reasonable estimate of the amount of time needed for a project, personnel needed, expenses and other costs of the project. Unlike with hourly consulting pricing where an SEO may include an estimate of hours in the agreement, Project based pricing is a flat fee that cannot change if the defined project requires more time and resources than originally anticipated. That’s why project-based pricing models require well-written and detailed agreements so there’s an equitable outcome for SEO and client.
What does project-based pricing mean to SEOs?
In today’s economy, certainty of ROI in any marketing investment is a really convincing sales tactic. With project pricing, you may not be hinging payment on results, as with pay-for-performance pricing, but you are committing to completing a set project for a flat fee—no surprises. This means that this pricing model is a lot less adaptable than an hourly pricing structure so be sure to use this when you believe there is a clearly defined project with a low likelihood of surprise issues or problems. And, be sure to carefully draft these agreements to define the parameters of the project very clearly so that you’re not stuck doing more work than you accounted for in your pricing. A simple statement of “I will optimize your website, www.clientsite.com, for $10,000” is sure to get you into a lot of trouble. Define what goes into a project: a certain number of hours of keyword research, a word count on copy and content to be written for the website, etc.
Also, remember the dishes example and base your time and cost estimates on reasonable time and cost. Even if you’re the type of SEO that likes to spend hour upon hour writing and rewriting text until, researching until the wee hours and generally going beyond the call of duty, you can’t expect that your client will always want to pay for the “extra mile,” and your competitors won’t charge for that extra effort either.
What does project-based pricing mean to SEO clients?
Clients, you know exactly what you are getting and for what price. Paying for results may be out of your price range if your SEO performs well (as you, of course, wanted) but project pricing is a nice middle ground between hourly and pay-for-performance. You get the certainty in price and you know the work to be completed. You also will want to make sure you concentrate on the details of your project-based pricing agreement. Make sure each element of the work you expect to be completed is included and defined. Don’t accept “website copy” as complete, that could mean any number of things from writing entirely new site copy down to simply reviewing existing copy and making suggestions for change. A simple way to make sure your project-based pricing agreement is clear and unambiguous is to test it on a third party—if it’s clear to them, it’s probably got enough detail to avoid any conflicts.
What you’re missing is the flexibility to adapt the project on the fly. If you and your SEO see that other work should be or needs to be done as you move forward, you’ll need to create a separate agreement and pay an additional flat or hourly fee. You can plan for this and include a set hourly fee for additional, unforeseen items in your project-based pricing agreement. This is a very common item to include and your SEO will likely include this in a standard project-based pricing agreement. If not, just ask…the idea of additional business from you should be well received.
Simplicity. One project, one price; an easy thing for a client to take to their CFO and defined income that an SEO can count on. In this economy, SEOs can attract new clients with a budget friendly project offer and create lasting relationships that can bring additional revenue from project expansions and regular project maintenance.
Lack of flexibility and demand for detail. These agreements come with pre-set parameters so it can be a little complicated to change directions or add necessary items as you move along in the project. And, both client and SEO need to pay attention to the details of the agreement to assure that everyone gets what they are paying for and gets paid for what they’re doing.
What to remember if you use hourly consulting…
- Pay attention to detail. Clients and SEOs need to draft these agreements carefully, explaining the parameters of the project in some detail. Otherwise, SEOs can end up underpaid or clients overcharged. Test your agreement on a third party—if they can understand the terms, what work will be done for the set fee, then your agreement will probably stand the test of any confusion or questions that can arise later on.
- Set limits on time for performance. Because the price is based on work, not time devoted, make sure you include a deadline for work to be completed. Otherwise, you could end up with a project that should take weeks dragging on for months. Remember the dishes: if you hired me to do your dishes, I may offer a lower price but I could drag the task on for hours, even days, if you don’t include a deadline.
- SEOs, set prices based on reasonable estimates. Account for time spent on the SEO basics and any additional items included in the project. But, just because you like to spend hours tweaking work that could be done well in minutes doesn’t mean it’s reasonable to factor that extra time into your price. Your competitors won’t, so don’t risk losing business.
- Clients, beware of too-good-to-be-true prices, they usually are. Look at the details, what you’re getting, compare to competitors and do your research. Many times, these teaser prices use some concocted industry language that looks like you’re getting a lot but delivers very little. A good professional SEO will talk to you about your SEO needs and come up with a custom project based on your needs and business and base their pricing on that information—rarely will you see pre-set project packages with an advertised fee. Remember that so much of the work depends on the size of and scope of your web presence and that varies too much for pre-packaged deals.
So, whether project-based pricing is right for your SEO project or not, I hope this pricing series is giving you an idea of the options available for pricing in SEO and the benefits and downfalls of each. Now that we’ve covered pay-for-performance, hourly consulting and project-based pricing, we’re moving on to profit sharing—an option with similarities to pay-for-performance but with even more security for the client. Make sure to check out next weeks profit sharing pricing model discussion to see if this could work for you.
As always, if you have comments, questions or input, please feel free to leave a comment!