When I first began practicing SEO some 15 years ago, I thought the formula was pretty simple. Step one: Be good at SEO. Step two: Profit! Seems obvious, right? Unfortunately, it turns out that for agencies and consultancies there's a big difference between skill set and profitability. In this brief article, I want to discuss a handful of universal problems facing agencies and consultancies and ways to overcome those barriers to financial success.
Barrier #1: Separating the wheat from the chaff
One of the toughest barriers to entry for SEO firms to overcome is simply proving one's competency to a larger audience — most specifically, potential customers. In an industry without any real formal education or standardization (for better or worse), anyone can claim competency in SEO. This has resulted in the long-lamented problem of charlatans and self-professed gurus with questionable-at-best claims about their proficiency. So, how does one go about establishing credibility among competitors and for customers? Here are a number of successful techniques my former coworkers and I at Hive Digital used in order to raise awareness about our company and provide evidence of our competency.
1. Publish research
I cannot stress this particular method enough. One of the many barriers you'll encounter in establishing your credibility is the willingness of other SEOs to vouch for your ability. When you perform experimentation and publish research regarding SEO, you admittedly help out all of your competitors by providing them with institutional knowledge that you could have kept to yourself and your team. However, more often than not, sharing that knowledge will lead to links and citations which can serve your company well. Nothing says your business can be trusted more than your potential competitors citing you as an authority.
2. Dirty work
As agencies grow, they tend to lose competencies at the granular, tactical level and gain competencies at the strategic level. How many times have you heard an industry talking head at a large agency talk about "brand" and "strategy" when your clients are begging you to "optimize title tags"? It's just the nature of the beast. We found out that many sought-after consultants needed to outsource their "dirty work" (the manual work that no one wants to do). I remember a specific relationship our company had with Todd Malicoat (Stuntdubl), a legend among search engine optimizers and, at the time, one of the most prominent consultants. This was back in the days of Digg, when a viral post would earn hundreds of unique, linking domains. We had contracted with Todd to do promotional work; we made sure power users submitted the content and so on, while Todd did much of the higher-level thought work, like create good viral concepts. Interestingly, we had never met in person before, and at Pubcon that year, I lined up to meet Todd after his talk. When I finally got to shake his hand, he called back the person to whom he had just spoken with and said, "Hey, these are the guys I use to handle promotion." It was an amazing, unsolicited validation from a grateful business partner. Over the years, I have found that taking work off the hands of successful agencies reinforces our competency and bolsters our own client list.
Barrier #2: Pricing (getting over the fixed cost hump)
Raise your prices and provide your existing customers legacy accounts for the remainder of the year. Do it. Sometimes it seems hard to justify raising your prices, but not doing so can very well end up being a penny wise and a pound foolish.
Raising prices:
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- increases the quality of people you can hire,
- allows you to afford your best talent,
- allows you to afford the best data and tools,
- allows you to offer more complete services,
- gives you wiggle room to fix mistakes,
- gives the impression of higher value, and
- increases goodwill with long-term clients who keep their original pricing.
Barrier #3: Weathering the seasons
One of the last lessons I learned before leaving the consulting world was the importance of continuity. Every fourth quarter we would face a dilemma where our customers had run out of marketing dollars, yet our employees and resources were built out to handle the highest levels of need throughout the year. There are a number of ways to address this, such as using contract workers, setting retainers, and practicing fiscal discipline in saving profits throughout the year. However, I'd like to stress one area that often gets overlooked. Consultants, wherever possible, should have a default calendar. This calendar includes annual keyword discovery reports, annual competitive reports, monthly analytics and ranking reports, regular site audits, and so on that guarantee income throughout the year once a contract is signed. Customers seem to prefer this to standard retainers because the monthly cost varies with the work accomplished. Intentionally load long-term planning reports for slower months so that your income evens out.
Closing thoughts
Running a business is not easy, much less an online business in a hyper-competitive industry where everyone can claim expertise and the true experts are marketing experts who crowd out your potential audience. Don't beat yourself up over the difficulties of being profitable, but also recognize that there's more to your job than being good at SEO. Those who figure out how to do both well end up making happier customers, happier employees, and a healthier workplace.
