I am going to talk about something that I touched on in a previous blog post. In the last few years I have noticed that the web design and SEO industry has grown exponentially. Every year there, are thousands of web designers and SEO companies starting their businesses and opening their doors for business. Because we sell SEO and web design leads to these and more established SEO and web design firms there are a few things I notice when I am speaking to them about their sales process.
The first is that the newer companies always have lower prices. Having competitive pricing is not a bad thing it actually makes a lot of sense especially when starting out. However, one of the biggest issues I notice with new web design and SEO companies is that they focus too much on how much lower their prices are than their competitors.
This model does work. However if you are looking to scale and grow your company this model of focusing on how much less you cost versus the other competitors is something that will get you in trouble fast. You will probably get more deals from your lower prices but many times, you will be building a clientele that can barely afford your services and extremely demanding. These are the clients that you will learn that you really can’t afford to work and are not worth bringing on to your business (unless you have a product or service specifically designed for them).
Eventually as you start growing your SEO or web design business, you will need to start doing one of two things. Either you can continue to expand your client base rapidly with your lower prices or you can start to focus on the “why” of your business. If you choose to increase, your client base and try to bring on as many jobs as you possibly can you will need to scale your sales, marketing and production side of your business to bring on the new jobs and fulfill the work. You can outsource all of this as well. This model does work but it become a numbers game of gaining X many clients = X many company assets to generate X dollars of revenue which will = X dollars of profit. Again, this does work and there are successful businesses doing this and focusing on the smaller dollar projects but there are a ton of moving parts to set up with it.
The other option is to focus on value and the “why” behind your business. When you are first starting out it may be very enticing to lower your prices to get your business going. That is a standard tactic and understandable. When you have a few clients under your belt you now have the option to keep your prices low (explained above) or help your potential clients understand why they should pay you more than your lower priced competitors. This is otherwise known as your value proposition. It’s the “why” behind your services or your company. Normal value propositions include coupling SEO with your web design services or including hosting with your services or free minor tweaks to the website…the list goes on and on. If you are able to help, your potential client understand why they should use your services and pay a higher rate for them. Most companies that have been around for a while use this tactic. The reason for it is because they are able to make it easier for their customers to understand why they would pay more.
Once you have a list of clients that are willing to pay you what you are worth then you can start to scale your business slowly and deliberately rather than the artificial scaling that lower priced companies will need to take to keep competitive with you.
I bring up these points because this is something that I constantly see happening in the web design and SEO industry. New businesses constantly pop up but most of them are go after the “reduced price” philosophy of running their businesses. Again, this does work at the start of the business but there are some potential downfalls with that model long term.
If you can help your clients understand why they should pay more for your web design and SEO services and it will reward you in the long term. If not then you will be playing the exact same game that all the other web design and SEO companies will be playing and there is always someone who is willing to do the work for less than you.