I think we all figured out why you are broke now. What happens when that traffic does not convert into sales or phone calls? You will lose the client; there goes your competitive edge - Is this what you were calling reliable support?
Starting an SEO Agency - Any Advice
- Thread starter msharron
- Start date
I think we all figured out why you are broke now. What happens when that traffic does not convert into sales or phone calls? You will lose the client; there goes your competitive edge - Is this what you were calling reliable support?
TL;DR anything,
but my tip is to productize the business.
Your peace of mind, quality of life, and most importantly your bank account will thank you in the long run. The only exception is if you're targeting straight up baller level clients and you never care about selling the business in the long run.
but my tip is to productize the business.
Your peace of mind, quality of life, and most importantly your bank account will thank you in the long run. The only exception is if you're targeting straight up baller level clients and you never care about selling the business in the long run.
Some good advice here -thank you. Key take away is charge more.
My portfolio is in the condition where I feel comfortable increasing my hourly rate to £60 per hour which is still on the lower side.
Out of 30 clients I typically have 26 that are active at the moment.
If I was only working myself I would be limited to £35 per hour x 40 per hours week * 52 / 12 = £6066 per month.
Not exactly five figures per month.
To boost my monthly income I employ several full time VA's who do a lot of the heavy lifting such as social management, profile enrichment, parasite SEO, outreach and a variety of other misc activities. Each VA generates a significant amount of profit from their activities alone.
In addition to that I also use a network of copywriters including several I have met here on WF.
As for link building, I have been actively building relationships with a number of vendors both on WF and other misc locations and use their resources charging a healthy mark up on the services offered. The arbitrage accounts for a significant percentage of my income as well.
In total these activities push me well beyond the five figure monthly income bracket.
My portfolio is in the condition where I feel comfortable increasing my hourly rate to £60 per hour which is still on the lower side.
Out of 30 clients I typically have 26 that are active at the moment.
If I was only working myself I would be limited to £35 per hour x 40 per hours week * 52 / 12 = £6066 per month.
Not exactly five figures per month.
To boost my monthly income I employ several full time VA's who do a lot of the heavy lifting such as social management, profile enrichment, parasite SEO, outreach and a variety of other misc activities. Each VA generates a significant amount of profit from their activities alone.
In addition to that I also use a network of copywriters including several I have met here on WF.
As for link building, I have been actively building relationships with a number of vendors both on WF and other misc locations and use their resources charging a healthy mark up on the services offered. The arbitrage accounts for a significant percentage of my income as well.
In total these activities push me well beyond the five figure monthly income bracket.
I like this direction a lot. There's a couple serious agency guys in here, but it doesn't make sense to alienate all your clients by coming back and saying "hey, you know that new contract? I messed up and need to double it..."
Can't you move them to a more cookie-cutter system where it's less work and higher profit margins and let them know the deal. Still bad for clients but at least you're not leaving them hanging and you're still getting a retainer from them. If they want a more custom/higher quality strategy then they have to pay more.
When starting with a new client the amount of work required to get them on the right track means they're a loss leader for the first few months.
Client management is usually only a time sink when/if something goes wrong / I don't do a good job of setting expectations (a thing of the past).
As specific contract matures it becomes an matter of maintenance / profitable.
I feel a sense of loyalty to old clients and therefore grandfather them in at existing rates rarely increasing my fees.
Client management is usually only a time sink when/if something goes wrong / I don't do a good job of setting expectations (a thing of the past).
As specific contract matures it becomes an matter of maintenance / profitable.
I feel a sense of loyalty to old clients and therefore grandfather them in at existing rates rarely increasing my fees.
"Hey, we've been working together for 6 months now, and there's so much demand for my services that I've had to reprice my offering, I'm sure you understand. As a loyal customer I wanted to give you plenty of notice, but from X date my rate will be increasing from A to B."
Raising your prices almost always cuts out just the bad customers. Either the ones you're not delivering results for, or the ones that just don't value your services.
In terms of scaling the business, some random tips:
- Don't hire yet. As others have said, your hourly rate is too low. Escape the hourly rate altogether, do something like put people on £X/mo retainers, which get them X credits which can be spent across Y services in that month. You're the expert, so you break down how their credits will be spent each month as per their strategy. Have a central pricing document for everything you do. You don't have to share it with clients directly if you don't feel comfortable with that, but use that to guide proposals.
- Turn everything you do into processes. Build them into your favourite PM tool. Track your time against processes and charge the appropriate credits given the amount of time they take on average, plus an extra for tasks with high perceived value.
- Vary hourly pricing depending on the skill level required to do it. Don't charge the same for an hour of your time as you do an hour of a VA's time, or a new hire. Aim for at least a £100k/yr in billable hours per employee you have. Remember that you can't work 40 billable hours a week on client work. You have a business to run. These strains on your time compound as you hire people. That means if you're going to generate £100k/yr in billable hours, across e.g. 20 hrs of billable work per week you can do, that's probably something like £120/hr. Realistically you can only expect an employee to do 30-35 decent hours of billable work a week, max. In the UK they need at least 4 weeks paid holiday. They'll take time off sick. 30 hours a week, 47 weeks a year means you're looking at £70-£75/hr billable work for even entry level staff.
- Move away from calling your offering SEO. SEO is being raped in the press, by other agencies, indian cold callers, direct mail spam, email spam, huge marketing automation vendors and so forth. SEO has lots of negative connotations with it. It's now viewed as part of something bigger. Content marketing/relationship marketing/digital marketing/inbound marketing/integrated marketing/one of the hundreds of other phrases going around out there. Pick one.
- Try to get as much control of digital strategy as you can. The more instrumental you can make yourself in the client's company, the better.
- Don't bother with sub-£1k/mo work. Account management will eat your margins.
- Differentiate yourself. There's tens of thousands of SEO agencies and so on out there. Word of mouth works well for now, but it won't drive growth forever. Can you go industry specific? Location specific? What differentiates you from XYZ agency up the road?
- Fire bad clients.
- Be careful about working with big brands initially. If you have a £10k/mo turnover business, and you hire a big brand on a £20k/mo retainer, hire 3 people and then you lose that client (you don't always lose clients for bad work, there's industry downswings, internal pressures -- e.g. your "champion" leaving their company, etc etc) you're screwed. Try to ensure that one client doesn't make up more than 20% of your revenue. If you are going to work on a contract like this, build a large amount of notice into the agreement so you can appropriately restructure should you lose the deal.
WF has a pretty anti-agency/client mentality, for the most part because lots of people try to do it "on the side" and never have the right processes in place to manage it. You can grow a decent sized business with clients.
It's very different to building a web app or typical affiliate business though. There's different challenges. The biggest challenges running an agency are usually human capital and sales.
Read about agency organisation charts, deduce one for yourself and put your name in all the various boxes. As your workload increases, hire people to take on one or more of those boxes. Don't hire people and just have them doing all kinds of stuff from selling to book keeping to seo, that's not building a business.
Read this book before you consider implementing a performance based salary for people doing this type of work: [ame="http://www.amazon.co.uk/Drive-Surprising-Truth-About-Motivates/dp/184767769X"]Drive: The Surprising Truth About What Motivates Us: Amazon.co.uk: Daniel H. Pink: Books[/ame]
You have to escape this mentality. Increasing your fees is helping your clients, not hurting them. Keeping rates low restricts your ability to hire good talent, do your best work and give them enough time. Good clients appreciate this, and aren't price led, but value led.
Ha, yea that's much better wording and good tips that I need to set up. Wouldn't you agree though that it's better to move them to a smaller retainer that's more cookie cutter than canning them in a transition stage?
I guess it's on a client-by-client basis. One of the biggest mistakes I've done is taking accounts on based on "potential". The "potential" for a certain business to be huge, and therefore grow my retainer, etc. Most businesses grow pretty slowly and I've found you grow retainers much faster by producing exceptional results for a company that's already pretty established and can pay a decent retainer from day one, than to work out small cookie cutter offerings on the hope one day they'll be bigger.
One way you can monetise the smaller clients is by selling training material. We're building up a decent set of freelancers/consultants in our contact database that I'm trying to think of ways to monetise, and a video training series/info product, or 1-2 day courses can be a nice extra revenue stream for an agency.
Great example is Tomorrow People (one of the faster growing digital marketing agencies in the UK - £300k turnover 3 years ago to over £3m this year). They have a training brand called Zoober. Lots of small business owners that want to pay small retainers have a DIY mentality too, and can gain a lot from this sort of training. You also then build a relationship which at a later date can lead to a decent retainer as the business grows.
I know from doing biz and talking to HR peeps, each employee should be able to generate 3x their salary in value.
Not sure it applies to you or every business, but basically if you pay an employee $100k a year, they better be able to provide you $300k in value. Same as if you pay them $50k a year, they should provide $150k value
Not sure it applies to you or every business, but basically if you pay an employee $100k a year, they better be able to provide you $300k in value. Same as if you pay them $50k a year, they should provide $150k value
For the love of god, don't charge on a per-hour basis. Charge on a per-project basis for actual results (rank increases). Much better ROI for your time, IMO. For example, if you purchase a high PR link from an authority site from someone on WF (wikipedia, examiner.com, whatever.com), how much time did that actually take you? 5 minutes to complete? Even at the $100 an hour rate, how much did you make? 5 bucks?
Disclaimer: I don't run an agency, but have done few client jobs before on a results basis. But if you have go-to sources for premium quality links already established, don't see the value in charging per hour. Unless you're doing tons of direct outreach, relationship building, etc... I just prefer to buy my rankings, so perhaps that's why I see things differently. I may just be a faggot as well.
Disclaimer: I don't run an agency, but have done few client jobs before on a results basis. But if you have go-to sources for premium quality links already established, don't see the value in charging per hour. Unless you're doing tons of direct outreach, relationship building, etc... I just prefer to buy my rankings, so perhaps that's why I see things differently. I may just be a faggot as well.
Lamer question. What kind of VA can successfully do social management? Where do you find them? Do you use UK moms-working-from-home? Is it possible to find some oversea like PH VA who can do it creatively and not screw everything up?
A function of this is that as you grow and incur more overheads you need to be able to up your billable rate. So for example, if you hire an admin person, that's an extra say £30k of overheads each year you need to cover.
The bigger your agency grows, the more people you have who can't do billable work (finance, hr, operations, strategy, etc) so the more your "doers" have to be bringing in.
This creates a challenge that potentially demotivates entry level employees (why am I doing £150k of billable work each year, but only getting paid £20k).
Some random other tips I've thought of:
- Hire people complimentary to you, not the same as you. It's easy when you interview people to opt for the person most similar to you (cas you'll naturally bond with them). What you want is people that will challenge you, and make you look at things from multiple angles.
- Look for people that get shit done, rather than experts. Train people, and allocate time for training. You don't need (nor can you afford) a guy who has 20 years of PPC experience when you're a 3 man agency. Much better to hire a 20 year old kid who has a passion for everything digital, that wants to have a great career.
- Once you get to 4-5 people, hire an office manager to do all your paperwork, invoicing, books, pay runs. This stuff bogs down business owners, and they typically don't let go of it until too late. This role is typically not too expensive to fill, but will free up tons of your time.
- With regards to Ddasilva's comment - I'd say Avoid pay on results or guarantees of rankings etc. The problem with these relationships is that you take on all of your client's business risk. Their competitor could do an SEO push, or the industry could tank, etc. You have fixed overheads (your staff's time), so you have to bill in a way that's guaranteed to cover that. It's not up to you to understand all the risks of your client's businesses. By doing pay on results stuff, you're massively exposed. What happens if you have a recession, and all your clients miss targets for 6 months? If you're reselling posts, or something, just add a mark-up based on the value you think the client will get from it, plus account for your time in managing it.
- Develop a proper sales process. Don't just engage prospects randomly. Read [ame=http://www.amazon.co.uk/The-Challenger-Sale-Customer-Conversation/dp/0670922854]the challenger sale[/ame]. In the sales process you need to position yourself as an expert. If someone comes to you saying "how much for seo and social media", don't quote them, take a step back, ask them probing questions: why do they want seo? Why do they want to manage their social media? Could they achieve their goals in other ways? Are there things they're forgetting? You'll sell better and bigger retainers. We do something like connect call that's general discovery -> second call to go through goals, challenges, problems, time scales -> marketing assessment -> in-person presentation of our recommended solution -> close. Presentations to close are better than proposals, as proposals usually lead to paralysis by analysis and giving away too much strategic insight.
- Partner with other agencies on a white label basis to cover areas you're not so strong. Don't lose a client because you can't execute on everything they need, but find another agency who can fill gaps. Focus on a core area of expertise, and then work with other experts externally to cover other areas whilst you're small. With time you can grow your in-house team to cover the full width of your offering. No 2-5 man agency can execute a £25M company's marketing budget 100% in-house.
Definitely get away from the charge-per-hour model. Charge a flat fee based on how much work you think you'll be giving that client to get them results. You can do the per-hour calculation in your head (then add 2x to it) and toss that $$ number to the client. Negotiate from there. If they question, Tell them that you think it is going to take X amount of manpower hours from your side to get them the results they are looking for.
Each month I meet and greet my clients in person or by phone (for all the haters I actually enjoy this part of the job).
We review progress from the previous month and I present a variety of options to increase their online exposure including social, CCarter style traffic leaks, onsite improvements such as blog posts and/or link building.
I explain to the client what I want to do, what the expected result will be and how much it will cost.
If the project merits I get hands on e.g. internal linking, silo'ing content, audits ect. then I estimate how much time I believe it will take and I invoice based on my hourly rate.
I also make use of a number of 3rd party contacts, a lot of whom I have met on WF that can provide ancillary services such as content writing or link building. Prior to deploying anything against a branded site I have will have personally vetted it for quality/effectiveness.
Based upon the meeting, the client and I agree a set budget for the month. Anything service I use a 3rd party for such as link building will be included and such expenses are marked up by a percentage which is where a significant amount of my profit is generated.
Combination of both. I use VA's for things I cant automate. FlipFl0p laid out a really good post on this a while back. I generally focus VA's on repetitive tasks that are easy to train/fill in for.
Content is written by a UK based writer depending on the niche and VA's manage parasite functions/create images on canva, research jobs and social proof.