How Much to Charge for SEO Services as a New Agency

American business legend Warren Buffet said pricing power is the most important factor in evaluating a business’s performance. He put it like this:

Source: QuoteAddicts.com

When you think about it, the Oracle of Omaha makes sense. Price wars aren’t uncommon in any industry, as people will be attracted to a product or service that gives them the best bang for their buck. Whether it raises or lowers its prices, business is good for the brand that can weather the storm of competitors.

The digital marketing sector isn’t any different. SEO costs can vary depending on the project scope, the business size, and the experience of the provider. A cheap SEO agency using black hat SEO might not deliver the results needed for long-term success. Small business owners are just as eager to search for a marketer who can offer the best quality SEO work for value. That puts your new digital marketing agency in a bind. How can you match your rivals without putting your small business at risk?

It gets complicated when you have to set prices for your search engine optimisation services. The average cost of SEO also depends on factors like your industry and competition level. Utilizing an SEO cost calculator can help estimate project expenses and set competitive SEO pricing packages.

Technically, small businesses can work on an SEO strategy with free basic tools, some of which don’t need to create an account. They can also hire agencies with hourly SEO services or a cheap SEO service to suit their marketing budget instead of doing DIY SEO. In this case, how can you justify spending on quality SEO service?

Justifying Spending

Fortunately, the second question is easy to address. Clients pay for the convenience of leaving their brand’s SEO strategies, including keyword research, content creation, content marketing, social media management, and digital PR, to experts. This encompasses, among other things:

• Subscriptions for the necessary premium SEO tools
• Energy consumption for running the hardware (i.e., PCs)
• Experience and expertise accrued by service providers or SEO professional
• Wages and other employee benefits for an in-house SEO team (e.g., healthcare)
• Hardware and software maintenance
• Advertising and marketing expenses

Let’s start with the first one: subscriptions for search engine optimisation tools. Ahrefs, for instance, maintains free SEO tools for low-scale use, such as researching target keywords for personal blogs and some small businesses. The downside is that their full capabilities are locked behind hefty pricing plans.

Source: Ahrefs

Despite alternatives like Moz and SEMrush, Ahrefs can afford to charge this much because their services see widespread use. In most situations, it’s used alongside other tools of its calibre to deliver data-driven results.

In our case, our link building platform derives accurate analytics data from the same tools. Its initial development in 2017 cost around $100,000, and we’re constantly expanding its suite of functions to improve user experience and product delivery. There’s also the price publishers charge for publishing content on their sites, which they dictate.

In the end, people get what they pay for. Don’t hesitate to explain why your agency charges so much for quality SEO service, provided you deliver results as advertised.

How Much Do SEO Agencies Charge?

Naturally, the first place to look for answers is the industry average price. Let’s look at several examples, the first being this analysis by Backlinko, where the figure is USD$497 (for both freelancers and agencies) per month.

The kicker is that an increase in SEO prices is proportional to an increase in client satisfaction.

Source: Backlinko

Meanwhile, a separate survey by Ahrefs found USD$500 to be the minimum for a monthly retainer. Most of the surveyed professional SEO providers said they charge from USD$501 to USD$1,000 monthly. For one-time SEO projects, the most popular SEO pricing model is between USD$2,501 and USD$5,000. A monthly SEO pricing structure is the most employed model.

Source: Ahrefs

We can go on and on discussing SEO pricing models and figures from other sources, but you probably have a good idea by this point. USD$1,000 may be a good rate for a basic SEO package (or you can follow our SEO agency pricing model and charge USD$1,500, which is the ceiling for monthly retainers).

But before you start putting price tags on your services, know that you can’t afford to be too vague in SEO. If I were the client and you quoted me USD$1,000 for your SEO, I’d ask how you’ll use every dollar to improve my search visibility.

The trap many startup SEO agencies fall for is that a brand’s organic traffic rankings will go up as soon as the optimisations go live. That isn’t how it works. The search engine results of an SEO project can take months to manifest, and that’s assuming you’ve kept up page optimization non-stop. No digital marketing service provider can guarantee the top spot, and anyone saying otherwise is either misguided or lying through their teeth.

This is why we make it a habit to be transparent about our prices. One-and-a-half grand for our basic SEO package is a lot of money, even by business standards, so we provide a full average SEO cost breakdown for all SEO plans.

Therefore, here’s another tip: Make transparency a key part of your digital marketing ethos. Clients will feel more at ease trusting you, even if you’re pricier than another SEO provider.

 

Commanding Higher Rates

Being a startup SEO company, I don’t recommend pushing the limits of how much you can charge, at least this early in the game. Failing to deliver while charging a high rate will ruin your agency’s image before it takes off. Then again, you stand to miss out on higher profits when you set your prices too low.

There are ways to justify charging high – and you’re already doing the first: being an SEO agency. Returning to Backlinko’s study, agencies earn eight times more than freelancers when they charge USD$10,000 or more annually. The trend is more or less the same for figures no lower than USD$1,000.

Source: Backlinko

The expense is rather justifiable for the reasons I stated near the beginning of this piece. While they require more resources, agencies can put more work into a local SEO campaign than a single freelancer.

Upskilling is another viable method. As you know, search engine optimization isn’t limited to what’s displayed on the surface. Algorithms also evaluate the site or page’s code to determine if it adheres to technical guidelines. In Backlinko’s study, the respondents with programming experience accounted for only 3.5% of the survey population but were paid 7% more.

Source: Backlinko

But there’s another advantage to this, and that it enables good SEO companies to expand its range of SEO packages, including creating an enterprise SEO plan to boost growing businesses’ organic search ROI. Crafting an enterprise SEO plan demonstrates the capability of a new agency to handle large-scale projects effectively. Building our team of skilled programmers proved useful for technical SEO, which later laid the foundation for our expansion to offer web design.

That said, I recommend keeping your prices up to the mid-range when starting. Build your reputation throughout the first few years and slowly expand your range of quality SEO services. Only then can increasing your SEO plans be more viable.