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Unread 11th May 2009, 06:26 AM   #1
Nick Arthur
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Default The Offline Cash Cow - How Much Do You Charge?

If your involved in offering internet marketing services to local businesses,
let's say you offer the following;

SEO
Web design/redesign
Hosting
Link Building
PPC
Email Marketing (setting up autoresponders etc)

What would you charge and would you charge a one-off payment or recurring?

Thanks
Nick

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Unread 11th May 2009, 07:05 AM   #2
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Default Re: >>The Offline Cash Cow - How Much Do You Charge?<<

Hi Nick,

I do a onetime fee + monthly.

On average $5K to get started and an average of $1500 per month for basic web-marketing. (Local SEO, autoresponder, and initial web consulting and redesign).

By targeting just the businesses that "qualify" for this payment range, it's been fairly successful. I work with 25 clients exclusively.

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I focus on ONE online business model - Recurring Revenue (RR). If I can help you in any way just post a RR question or PM me.
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Unread 11th May 2009, 08:29 AM   #3
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Default Re: >>The Offline Cash Cow - How Much Do You Charge?<<

Hi Mark,

Can you explain what you mean by 'to get started' and 'qualify for that price range'?

This seems quite a high price. How do you sell it to them/

Thanks again

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Unread 11th May 2009, 08:36 AM   #4
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Default Re: >>The Offline Cash Cow - How Much Do You Charge?<<

I have seen $197 for a 5 page website. Other than that everything would be different. If I was doing ppc for them it would be $197 plus costs of the campaign. Right there, they are looking at $400.

Add in SEO, content, link building, hosting and email marketing. I would say an extra $97 for SEO, same for link building (plus content costs for using linkvana) hosting would be a yearly amount ($200) and email marketing I would charge per AR email, plus squeeze page setup.

Hope some of that helps. Those are starter prices I would use. Good Luck.

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Unread 11th May 2009, 09:02 AM   #5
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Thanks Mary!

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Unread 11th May 2009, 09:51 AM   #6
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Default Re: The Offline Cash Cow - How Much Do You Charge?

I'm thinking it depends a lot on your skill levels entering into offline marketing....are you a seasoned veteran at web design with a existing porfolio....or someone just starting, doing just your own sites basically...
(This holds true for most services, not just web design)

I've seen pricing for web design by some new to offline as low as 200.00 for a basic site....and as high as 10,000.00 by some of the advanced members.

I believe you have to know your market & offer what the local market will bare...also you have to know your skill level...(can you walk the walk so to speak).

There is always outsourcing for any service you personally do not have a full grasp on or are too busy to tend to...but still, you should have a basic knowledge of what you are offering to at least make an honest estimate or proposal & do not under value your tasks...

Some basic pricing outline I use is:

Secure, install, configure, autoresponder with 2 newsletter template designs & adding any existing customer data into the system, with 1 confirmation broadcast: $500.00 onetime payment
*Note: I set-up accounts for each client separate, installed on their servers

Newsletter / customer database management: $150.00 - $200.00 month

SEO: Initial set-up: $800.00 - $1,200.00 onetime payment
SEO Management: $150.00 - $250.00 per month

Web design / Re-design: Basic 3 page web site:
WP theme: $750.00 (add-ons extra)
HTML template: $750.00 (add-ons extra) (avg price usually ends up around $1,200-$1,500)
Custom HTML: $350.00 per page (avg)
Flash: priced accordingly

Re-designs: $200.00 per page +/- (add-ons extra)

Blog Account: WP - $500.00 set-up onetime payment
$100.00 monthly managment (4 submittals)

Social Networking Accounts: $100.00 account set-up - onetime payment.
$300.00 per month list / tweet management
(Twitter - Facebook - Linkedin - Boomj)

Video Marketing: quoted per project

Article Marketing: $35.00 - $50.00 per article / press release

SEM - Search Engine Marketing (PPC) - $200.00 account set-up + campaign costs
Monthly management Varies per campaign, usually a % fee

Hosting: $7.50 - $25.00 per month (depending on size needed - I offer 3 levels) - plus they use my affiliate links

*Many time I will increase these numbers depending on the client & how I evaluate each situation...but these numbers are a basic outline I use...

Hope this helps,

Ken
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Unread 11th May 2009, 09:59 AM   #7
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Thanks a lot for that Ken. I plan to outsource most of the work. I know enough to be able to walk the walk, but i'd much rather be out getting business and speaking to clients than sitting in front of dreamweaver etc.

Nick

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Unread 11th May 2009, 10:08 AM   #8
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Default Re: The Offline Cash Cow - How Much Do You Charge?

  1. $7,500 USD for online internet business consulting and training.
  2. $25,000 USD for individual consulting and training (1 month).
  3. $75,000 USD for company consulting and training (2 months).

Never followed the cash cow, although it does seem pretty good. #1 is online, #2 and #3 are offline.

I have an entire team of strategically positioned consultants, who I personally trained.

To be honest, I don't make many sales for #2 and #3, but they have sold out due to availability limits and I'm not aiming for volume.

The respective fees include all the software, tools, resources, material etc... website installation and optimization, plus supervised internet marketing campaign launch.

Offline fees cover our consultant's stay, food, tickets and all that also.

Then again, I offer something that no one else does, page 1 Google organic rankings for any keyword, regardless of competition. 100% white hat.

If you have something unique to offer and if you think you have what it takes, don't be afraid to charge those amounts.

Individuals, and especially companies will purchase.

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Unread 11th May 2009, 10:29 AM   #9
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Default Re: >>The Offline Cash Cow - How Much Do You Charge?<<

Quote:
Originally Posted by RecurringRevenue View Post
Hi Nick,

I do a onetime fee + monthly.

On average $5K to get started and an average of $1500 per month for basic web-marketing. (Local SEO, autoresponder, and initial web consulting and redesign).

By targeting just the businesses that "qualify" for this payment range, it's been fairly successful. I work with 25 clients exclusively.

Mark Robbins
Recurring Revenue
Wow, we have very similar business models.

I work a very specific Niche and I charge between $5k and 20K for the Initial setup. My monthly fee ranges between 2k and 8k.

I also provide Offline consulting for Direct mail campaigns, etc...

I provide 100% of their marketing advice. I also offer a Guarantee that I will lower their existing budget and increase their sales. I see so many so-called Gurus here that have no clue what they are talking about. It's the Blind leading the Blind.

I would say 99% of these so-called Gurus are Undercharging. They get excited over the smallest sales. Normally I wouldn't care, but that would be like Frank Kern saying his newest launch did $10,000.

I pre-qualify my clients with a Questionnaire before we do any business together. I turn down 90% of the co's that ask me to handle their marketing. I use their EXISTING monthly budget to determine MY fees.

If they are spending 10k month, you can be sure my fees are going to come in between 8-10k. Remember, I offer a Guarantee that I will lower their cost and increase their sales.

I Guarantee results so I need to be selective.

I allow each client 30 minutes per month (no rollover) personal Phone consultation. Each additional 15 minutes is billed at $150.

In addition I do Teleseminars to the group as a whole.


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Unread 11th May 2009, 10:33 AM   #10
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Default Re: >>The Offline Cash Cow - How Much Do You Charge?<<

BlueStar,

You've mentioned this questionnaire before. It would be great if you could share it with us, or a brief outline of the kind of questions you use to determine your clients

I'm very interested and I'm sure a lot of others are too.
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Unread 11th May 2009, 10:36 AM   #11
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Default Re: >>The Offline Cash Cow - How Much Do You Charge?<<

Quote:
Originally Posted by snakez0r View Post
BlueStar,

You've mentioned this questionnaire before. It would be great if you could share it with us, or a brief outline of the kind of questions you use to determine your clients

I'm very interested and I'm sure a lot of others are too.
Send me a PM if interested.

Thanks
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Unread 11th June 2009, 06:12 AM   #12
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Default Re: >>The Offline Cash Cow - How Much Do You Charge?<<

What specifically is your guarantee ... an is it a money back guarantee?

With a specific time guarantee?

In other words is it a real guarantee?

I never hear anybody mention the specificm results they get with cliesnts.
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Unread 11th June 2009, 06:16 AM   #13
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Default Re: The Offline Cash Cow - How Much Do You Charge?

I also think it depends on the client too.

The guy who did SEO for party poker in 2002 and 2003 was getting $150k a month...I heard.

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Unread 11th June 2009, 06:49 AM   #14
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Originally Posted by Daniel Molano View Post
  1. $5,000 USD for online internet business consulting and training.
  2. $25,000 USD for individual consulting and training (1 month).
  3. $75,000 USD for company consulting and training (2 months).
Never followed the cash cow, although it does seem pretty good. #1 is online, #2 and #3 are offline.

I have an entire team of strategically positioned consultants, who I personally trained.

To be honest, I don't make many sales for #2 and #3, but they have sold out due to availability limits and I'm not aiming for volume.

The respective fees include all the software, tools, resources, material etc... website installation and optimization, plus supervised internet marketing campaign launch.

Offline fees cover our consultant's stay, food, tickets and all that also.

Then again, I offer something that no one else does, page 1 Google organic rankings for any keyword, regardless of competition. 100% white hat.

If you have something unique to offer and if you think you have what it takes, don't be afraid to charge those amounts.

Individuals, and especially companies will purchase.
Would you WSO that for us?

J/K, those are pretty steep fees, I'm just wondering what sort of an ROI are your clients getting out of that?
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Unread 11th June 2009, 07:41 AM   #15
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Man....that's expensive.....basically aren't you ripping of the ignorant?
NO!

I spoke to a local guy who does SEO (badly) and he charges $3000 up front to optimise an existing site - and from what I see he only works on one keyword - not much else.
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Unread 11th June 2009, 08:19 AM   #16
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Quote:
Originally Posted by billyboy View Post
Man....that's expensive.....basically aren't you ripping of the ignorant?

Hi Billy,

Expensive? Not at all. If anything the pricing is too low....specially for the SEO services. I deliberitely kept it lower to start off with & attract a solid customer base. Other SEO businesses are easily charging 3x-5x more.....and they get it...
I plan to raise my pricing, still lower than most but more in line with other local SEO firms.

Take into account the amount of work involved. It's not something that can be done in a few hours...it's on on-going process to keep a website on top of the search engines.

Then again you have to take into account your geo-graphic location & what your market can bear....
$2500.00 might be too low for larger cities like NYC, LA, Chicago.....but too high for smaller cities like Buffalo, NY...Williamsburg, VA or Canton, Ohio.
Research your local market, go in higher with pricing...you can always negotiate.

Good Luck,
Ken
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Unread 11th June 2009, 08:56 AM   #17
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Hi Ken,

How would you go about testing your prices?

It sounds like I have to start high and keep losing customers until I gain some

Did you guys figure out other metrics such median Yellow Pages or radio ads or someting to that effect?

Thanks for clarifying that, I'm starting myself offline and this is probably my number #1 concern.
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Unread 11th June 2009, 09:12 AM   #18
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Default Re: The Offline Cash Cow - How Much Do You Charge?

I won't go into specifics here, as it depends on the individual client.

For a basic, 3-5 page static website, domain name plus 12 months hosting/maintenance, typical setup is $500 plus expenses (custom graphics, theme, etc.). Monthly fee runs about $30, including minor maintenance, if I host the site.

Autoresponder service varies, depending on whether they have an existing database, etc. Again, typical is about $500. Monthly fee runs about $20, plus $.02 per email sent.

That's for the folks that want a stable, flat fee. I base the fees quoted on an hourly rate of $125/hr, which seems to hit the right range in my area. That's also the rate I charge for consulting, where I'm not providing the actual services.

If the business is right for it, I much prefer to charge based on performance. I like to get a big enough advance to cover the overhead of setting up the campaign and getting it going, but not so big it's a deal killer. Then I'll get paid a royalty, either per qualified lead or percentage of sales generated, for a set period of time (usually 2-3 years). The advance is non-refundable.

For example, if the business nets out at 5% profit, I'll charge 1-2% of sales. That way, the client is paying me out of profits, and by the time he pays me, he's already made 2-4 times what he's paying me. If, for some weird reason, I don't produce, the risk is limited to the advance.

Get this one thing right and it will be like you are the only one they are listening to. Probably because you will be the only one they are listening to.

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Unread 11th June 2009, 09:56 AM   #19
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Default Re: The Offline Cash Cow - How Much Do You Charge?

The amount you charge should really be linked to value.

In fact establising an approximate dollar value of the service you're going to provide by getting your prospect to estimate step by step the results he's likely to get...that's one of the biggest keys both to getting hired and charging premium fees.

The other secret is to extend the time period.

An internet marketing strategy that helps a business make an extra $100 in profits a week is actually:

$100 a week value
$400 a month value
$1,200 over 3 months
$2,500 over 6 months
$5,000 over 1 year
$10,000 over 2 years
$15,000 over 3 years
$25,000 over 5 years


Since many internet marketing strategies keep performing year after year the value is genuine.

Now if you help a business make an extra $500 a week in profits (which is quite possible especially with businesses that have high transaction values) those numbers get quite huge...

$500 a week value
$2,000 a month value
$4,800 over 3 months
$10,00 over 6 months
$20,000 over 1 year
$40,000 over 2 years
$60,000 over 3 years
$100,000 over 5 years


When you start thinking in numbers like that it becomes fairly easy to justify premium prices.

Most people selling their services are charging between $1,500 and $6,000+ initial fee (usually 50% upfront and 50% on completion) plus some kind of monthly fee varying quite a lot from $50 a month to $1,000+ a month.

Every job is different so every price should be different.

But any fee can be undercharging if you're making serious profits for a business and even the tiniest fee can be a ripoff if you're not genuinely helping a business make more sales and profits.

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Unread 11th June 2009, 10:32 AM   #20
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Originally Posted by Katie Byrd View Post
took me less than an hour and cost me $50 for some backlinks. My fee was $1K.

Within the first week, they had 2 new clients (who found them online) who signed up for 1 year contracts for a total of $1800.

This is a GREAT example of how you can provide genuine value to a business even with some quite simple internet marketing skills.

If you're making a business a profit over what they pay you then your fee is more than worth it (obviously).

Kindest regards,
Andrew Cavanagh

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Unread 11th June 2009, 11:01 AM   #21
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Default Re: The Offline Cash Cow - How Much Do You Charge?

I think it's very important that you know how much is their marketing budget before you start presenting your services. So not only can you price them and offer services accordingly within their budget, you also don't waste time together, coz right away they will know whether they can afford you or not.


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Unread 11th June 2009, 11:56 AM   #22
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Default Re: The Offline Cash Cow - How Much Do You Charge?

For all of you people thta think a few thousand per month is too much to charge for an integrated online marketing campaign, take a look at this. I was one of those that worked for an e-commerce start up during the dot com boom a decade ago. Our senior management team came from Fortune 500 consumer products companies like Proctor and Gamble and RJR / Nabisco. We had an office in Manhattan and another in Seattle. We were trying to get a 3rd round of financing, so they were trying to do some things to look good for wall street. Apparently saving money didn't enter in to that equation.

A web development company in Seattle gave us a bid of $85,000 to do our website, back end order processing system, and database. That did not include any SEO or email marketing. Keep in mind that was back when there were not off the shelf options like we have today.

The thing is that our management team turned them down. Not because they were too expensive, but because there was a company in New York that thought wall street had a better opinion of. That company charged us about $350,000 for the exact same thing as were going to get from the company in Seattle. So, companies will pay big money for this sort of thing.

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Unread 11th June 2009, 12:20 PM   #23
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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soooooo if they pay it it's fine? I mean that SEO who charge $3,000 for one phrase....aren't they betetr of using google adwords?

Many seem to say "well, they pay it and they are businesses so charge high prices." but just because you can doesn't make it right either. Sure if paying $3,000 brings in $4,000+ worth of business it's good. But does it? Some of the SEO I see are simply ripping other businesses off. That's ok?

I mean charging thousands for phrases that will not bring enough customers to me, is not right.....
The whole world's been ripping us off anyway. You see it's the year 2000+ but we're still buying/using fossil fuel, why? Because they won't sell alternative energy until we run out of oil. They will max it out first just like when they release Pentium 1, they'll max it out before releasing Pentium 2... or Ipod, how many version have there been? They're ripping us off. For all I know Steve jobs already has Ipod Flea since the day of cassettes.

Anyway enough rant....

It's true. Big companies tend to believe those who charge more because if you charge $100 for a site that is suppose to make them hundreds of thousands, they'll think you're probably kidding them.

You know what, when I was confined in the hospital, a doctor visited me for another time even though he knew I was already fine. I thought he was ripping me off, because every visit he does will be charged on my hospital bill. Everybody rips us off in a subtle manner.


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Unread 11th June 2009, 12:34 PM   #24
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Hey Ken,

You're balls on right! Bigger cities can justify higher fees as there's more opportunity for the business (and you as a consultant). Thanks for sharing your pricing model!

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Unread 11th June 2009, 12:50 PM   #25
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Originally Posted by Market1 View Post
Would you WSO that for us?

J/K, those are pretty steep fees, I'm just wondering what sort of an ROI are your clients getting out of that?
I will never make a WSO/eBook/course about it, otherwise I wouldn't be charging that much.

Just think about it, big corporations spend millions in publicity. Find out how much a super bowl tv commercial costs. It reaches about 20 million people, untargeted.

Advanced SEO can reach the same number of people, targeted, and the investment is a few millions less.

They get the same or even better exposure to their offers, it costs nothing, and it's not even perceived as advertising (considering most people don't even know that the Google organic search results can be manipulated).

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Unread 11th June 2009, 12:54 PM   #26
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Hello fellow Warriors,

The pricing here is all over the map but is NOT out of line.

I have a client I'm trying to land right now. The conglomerate has 16 websites (essentially one for each business). Get this, they're frickin considering Network Solutions as their SEO/SEM company!

YES, the SAME Network Solutions company that sells domain names at inflated prices! Here's their business model...
  • They have the 4 hour seminars in major cities charging $129 per seat.
  • Also provide a "free" website critique
  • Then sell you on the back end obviously.

Here's the link....Search Engine Optimization (SEO) Seminar - Network Solutions

I think it's a brilliant model that's similar to the "cash cow" system we're all aware of. I also like they're free webinar videos on the site. Good, free info for potential clients.

So, back to my story. This client I'm trying to win the business from here in Chicago was quoted $47,000 for basic SEO only for all the web properties. It's a 3 month contract and a "one and done" meaning Network Solutions walks away after this initial assignment. Want onging SEO/SEM? Sign here, press hard, you're making 3 copies. Who knows what they'll charge for this. The client was told "we'll talk after we get you going". Yeah right, a slick sales rep that's for sure.

My pricing came in much lower which now has them "scared" as they're questioning me on why my price is SO LOW. The good news is that the $47K is way out of their budget so I'm still in the running here. I will know next week.

I'm going to spend the $129 and attend the next Chicago event. I'll document their sales process and emulate from there. I think it will be the best money spent on this offline niche as far as training. You all should consider this as opposed to another "offline" WSO. :-)

Forgive me if it seems I hijacked this post but just wanted to share with everyone that no pricing is too nutty. It's whatever the market will bare as mentioned already.

Thanks for reading,
Dennis
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Unread 11th June 2009, 01:23 PM   #27
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Man....that's expensive.....basically aren't you ripping of the ignorant?
Expensive is relative. If you want to sell your services to someone that consistently hires professionals at a $120k salary, that's $10,000 a month. By working freelance, only when they need you, a month of your work is saving them the cost of searching for a candidate, interviewing that candidate, filing paperwork, establishing benefits, hiring that candidate, etc.

For a major corporation, that process costs several thousand dollars, and can actually exceed the offered salary. So you save them all of that, get the work started two or more months early, and they don't have to provide benefits. So you can safely add up the salary they'd normally pay ($10k), the amount they'd spend on hiring a candidate ($10k), the amount they saved on benefits ($5k), and maybe an added premium for convenience... which is totally arbitrary.

So $25k+ for a month's work is perfectly reasonable, if you can get it. I'm tremendously bad at getting it, myself, because I rarely work for large clients like that... I tend to work with smaller businesses, where a month's work is closer to $4k and their hiring process is a couple hundred bucks, so I charge in the $6k a month range for them.

This is not where I want to be, so I've dropped the offline thing unless and until I can find a legitimate and stable way to bill in the $25k range. I've been toying with the idea of getting my company registered as a direct Microsoft contractor, so I can just work at Microsoft all the time - I can probably pull something in the $35k range there - but it's NOT a trivial process, and makes getting on the GSA schedule look easy.

"The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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Unread 11th June 2009, 02:21 PM   #28
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Daniel,

With the google local one box now pushing down organic listings what do you think a top position for something like personal injury attorney boston be worth??? lots of cash I presume?
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Unread 11th June 2009, 02:40 PM   #29
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Originally Posted by Sonomamike View Post
Daniel,

With the google local one box now pushing down organic listings what do you think a top position for something like personal injury attorney boston be worth??? lots of cash I presume?
That's an easy keyword phrase, anyone can do that. Here is how you rank in the local one box: Google Local Business Center & How to Rank for Local Search - Red Cardinal [.] ie

Same principle as SEO, except you have to register the local business as described there. Reviews by clients when it's already registered also help a lot, which cannot be easily gamed.

But I'm talking about competitive "impossible" keywords. If you can rank for those, you can charge anything.

Google: business consulting

That took me 2 months to achieve. Over 40,000,000 competing sites (over 5,000,000 under quotes) and 300,000 monthly searches according to the Google Keyword Tool.

Such keywords are the ones that provide crazy targeted traffic, and our consulting services provide the know how.

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Unread 12th June 2009, 12:21 AM   #30
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Thanks Daniel....the point I was trying to make is that being at the top of that local box will now bring you more business than ranking number 1 in the organic listing...the response I have had since my businesses listed at the top= $50,000 extra dollars in the last month.

Also just got this email about Google Local Business:
We are writing to let you know about an important update to your Google Local Business Center account (log in at www.google.com/lbc).

Your account now has a new interface designed to show you more about how customers interact with your verified business listing. A new reporting dashboard shows statistics about your business listing, like how many users saw your business as a local search result, zip codes where driving directions requests come from, and the top search queries for which your business appeared. Here is a sample of your data:
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Unread 12th June 2009, 12:55 AM   #31
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Originally Posted by billyboy View Post
Sure if paying $3,000 brings in $4,000+ worth of business it's good. But does it? Some of the SEO I see are simply ripping other businesses off. That's ok?

I mean charging thousands for phrases that will not bring enough customers to me, is not right.....

I agree that charging thousands of dollars for a service that doesn't bring in more in profits is a rip off.

I also think that charging $50 for a service that doesn't bring in more than $50 in profits is also a rip off.

I also think that charging $500 for a service that doesn't bring in more than $500 in profits is a rip off too.


See the pattern.

If you're going to work with business owners you should be focused on making them real sales and profits.

When you're doing that you can charge accordingly.

If you make a business $10,000 in profits it's a great deal for them if you only charged them $5,000.

If you make a business $500,000 in profits it's a great deal for them if you only charged them $200,000.

If you make a business $50 in profits and you charged them $500 then you better do some more work for them until you make up the difference otherwise you just ripped them off.

It's not the amount of money you charge...it's the profits you make them.

Kindest regards,
Andrew Cavanagh

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Unread 12th June 2009, 01:53 AM   #32
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Originally Posted by AndrewCavanagh View Post
I agree that charging thousands of dollars for a service that doesn't bring in more in profits is a rip off.

I also think that charging $50 for a service that doesn't bring in more than $50 in profits is also a rip off.

I also think that charging $500 for a service that doesn't bring in more than $500 in profits is a rip off too.


See the pattern.

If you're going to work with business owners you should be focused on making them real sales and profits.

When you're doing that you can charge accordingly.

If you make a business $10,000 in profits it's a great deal for them if you only charged them $5,000.

If you make a business $500,000 in profits it's a great deal for them if you only charged them $200,000.

If you make a business $50 in profits and you charged them $500 then you better do some more work for them until you make up the difference otherwise you just ripped them off.

It's not the amount of money you charge...it's the profits you make them.

Kindest regards,
Andrew Cavanagh
This is the key I think. Before you start negotiating a price find out the value of a new customer. If it's 10k a year and you charge 20k a year then 3 new customers gives them a great return. Surely its not hard to convince a potential client that what you do can get them 3 new clients a year.

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Unread 12th June 2009, 02:43 AM   #33
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Quote:
Originally Posted by AndrewCavanagh View Post
I agree that charging thousands of dollars for a service that doesn't bring in more in profits is a rip off.

I also think that charging $50 for a service that doesn't bring in more than $50 in profits is also a rip off.

I also think that charging $500 for a service that doesn't bring in more than $500 in profits is a rip off too.


See the pattern.

If you're going to work with business owners you should be focused on making them real sales and profits.

When you're doing that you can charge accordingly.

If you make a business $10,000 in profits it's a great deal for them if you only charged them $5,000.

If you make a business $500,000 in profits it's a great deal for them if you only charged them $200,000.

If you make a business $50 in profits and you charged them $500 then you better do some more work for them until you make up the difference otherwise you just ripped them off.

It's not the amount of money you charge...it's the profits you make them.

Kindest regards,
Andrew Cavanagh
How often do you gauge the payback correctly within tolerable ranges??

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Unread 12th June 2009, 03:13 AM   #34
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Originally Posted by Sonomamike View Post
Thanks Daniel....the point I was trying to make is that being at the top of that local box will now bring you more business than ranking number 1 in the organic listing...the response I have had since my businesses listed at the top= $50,000 extra dollars in the last month.
That depends on your niche, doesn't it? In fact, many niches with a "10 pack" of local listings, practically all of which only have a Google map behind them, are practically worthless. That's because they all look about the same -- which makes them unremarkable. Even the #1 listing is still just a pin in a map.

Contrariwise, those Google Local Listings that have a website behind them, give good content and actually show up in the organic listings have an almost unfair advantage. That's because they are the listings that are remarkable -- and real people remark about them in the local marketplace.

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Unread 12th June 2009, 04:03 AM   #35
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Quote:
Originally Posted by AndrewCavanagh View Post
I agree that charging thousands of dollars for a service that doesn't bring in more in profits is a rip off.

I also think that charging $50 for a service that doesn't bring in more than $50 in profits is also a rip off.

I also think that charging $500 for a service that doesn't bring in more than $500 in profits is a rip off too.


See the pattern.

If you're going to work with business owners you should be focused on making them real sales and profits.

When you're doing that you can charge accordingly.

If you make a business $10,000 in profits it's a great deal for them if you only charged them $5,000.

If you make a business $500,000 in profits it's a great deal for them if you only charged them $200,000.

If you make a business $50 in profits and you charged them $500 then you better do some more work for them until you make up the difference otherwise you just ripped them off.

It's not the amount of money you charge...it's the profits you make them.

Kindest regards,
Andrew Cavanagh
Hey Andrew,

This really does mean sense instead of guessing how much does your fee worth. by doing a research we should able to know how much does our service worth. Thanks for the tips!

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Unread 12th June 2009, 06:39 AM   #36
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Originally Posted by bigjock View Post
How often do you gauge the payback correctly within tolerable ranges??

Good question and the answer is never AND nearly always...at the same time.

I'm not that good at gazing in crystal balls but I am good at making sure I get some kind of results once I start working with a client.

You need to go back to my earlier post in this thread about increasing the time frame to establish value.

I would prefer my client's made back my fee in the first day or the first week but the first 3 months or so is cool.

And if it's something that keeps bringing them in sales (like good SEO combined with good email follow up and education of clients and prospects with reports, audio etc) then if they start making a profit after 6 months it's still an astonishingly good deal for them because they'll likely be making extra sales for many, many years.

In my head I think in terms of getting them a return inside 2 to 4 months...that way I know they'll want to hire me again.



Here are the key points from my previous post that relate to this:

An internet marketing strategy that helps a business make an extra $100 in profits a week is actually:

$100 a week value
$400 a month value
$1,200 over 3 months
$2,500 over 6 months
$5,000 over 1 year
$10,000 over 2 years
$15,000 over 3 years
$25,000 over 5 years


Since many internet marketing strategies keep performing year after year the value is genuine.

Now if you help a business make an extra $500 a week in profits (which is quite possible especially with businesses that have high transaction values) those numbers get quite huge...

$500 a week value
$2,000 a month value
$4,800 over 3 months
$10,00 over 6 months
$20,000 over 1 year
$40,000 over 2 years
$60,000 over 3 years
$100,000 over 5 years


When you start thinking in numbers like that it becomes fairly easy to justify premium prices.


...Including justifyng the fee you've already charged. You just run them through the increased profits you've created and what that will be worth to them over an extended time frame.

If it's a business with high transaction values the potential increase in profits is substantial.

Just sell one extra home a month and you're talking multiple thousands of dollars.

Kindest regards,
Andrew Cavanagh

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Unread 12th June 2009, 07:26 AM   #37
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Andrew

Good answer, but I think to accurately estimate this, you have an understanding of so many factors.

Its easy to say "charge based on value"...and I imagine many people have a feeling they aim to do this this...when infact many times, they're completely shooting in the dark/at the wrong target...or worse...charging on a time spent basis....YUK!

Your experience allows you to know roughtly what to charge. I know what an industries net margins are roughly.

At the same time you're sitting there doing the sums in your head, so is the prospect. hes thinking, "If I can generate $100k in extra sales, it will be worth X and so I should pay 1/2x to get an accpetable return on the effort"

The X of restaurant is hugely different to the X of a commodity manufacturer, so....

What Im trying to say is that it takes a deep knowledge of business models to try and charge on value, and a deep knowledge of expected outcomes in IM that a lot of people don't have.

It also takes a little knowledge of the prospect and how far he can be pushed....how much of his X you can grab for yourself while satisfying his desire for a return.

because the truth be told....in any deal like this, someone is buying a pup....either you're charging too much, or he's getting you on the cheap. Only the degree varies.

The only time this may not be true is if you don't charge on value. Its the man walking into the dentist issue....

"How much is this tooth extraction going to cost?"

"its $300"

"How long will it take?"

"About 2 minutes?"

"What! $300 for 2 minutes work!"

"Well, if the times bothering you I can take as long as you like."

If you know the expected outcome, and the business types typical X, then you can go in with an optimal bid based on their return...

And heres the rub...you know it from experiece, I can look at the books of a similar company in a similar field (which still doesnt tell the whole story) and guesstimate it...

But how would you suggest newbies do it...

and what portion of X (and over what time period) represents an optimal value bid? Half X over 5 years? 1 Year? 1 month?


All the best

Barry

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Unread 12th June 2009, 09:07 AM   #38
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Quote:
Originally Posted by bigjock View Post
The only time this may not be true is if you don't charge on value. Its the man walking into the dentist issue....

"How much is this tooth extraction going to cost?"

"its $300"

"How long will it take?"

"About 2 minutes?"

"What! $300 for 2 minutes work!"

"Well, if the times bothering you I can take as long as you like."
Hi Barry, You make a good point...

That's the usual reaction of people when hearing a service rate charged like that....."What! $300 for 2 minutes work!"

What they do not see is all that went into the makings of that $300 rate...

The cost for novicane, needle, gauze...
There may be some lab testing costs involved too...
A small percentage to help pay off the expensive dental chair and fancy looking equipment next to it...
A small percentage to help pay off the years of medical school & the 6 figure tuition bill he has...
A small percentage to pay his employees...
A small percentage for his office rent or mortgage payment...
And last but not least....a small percentage for the "internet marketer" that comes calling with offers of better website design, better customer service, advertising, etc......

Theres a bunch that goes in behind the scene to make up that "$300 for 2 minutes" fee he charges...
All we see is the 2 minutes it takes for the tooth extraction....

Same as when the local small business owner asks....

"So, what is it going to cost me for a "client capture system"...

Well, with all that's involved...it will be a $500 onetime fee & $100 per month to maintain it.

And how long will this take to get running?

I can have it up & running for you in 2 hrs...

"What...$500 for 2 hrs work? Your nuts!!

.......what he doesn't see is the work behind the scene...all that it takes for this system to be fully functional...

...The secural of the autoresponder software
...the installation & intergration of the software
...the migration of any existing email addresses to the software
...the set-up or design of email & newsletter templates
...initial broadcast to any migrated emails to get "opt-in" status

Then add in...

...A small percentage for your busineess overhead
...A small percentage goes to pay for any employees you have
...and so on...

Sure...the software itself can be running with-in hours...thats the only part he actually see's....but to make it fully functional might take days.....that part the owner does not see...

Then add in the "knowing where to tap" factor...

In your eyes...that $500 is way too low of a price (and it is....)
In the owners eyes...that $500 is way too much...

The hardest part of being an "offliner" is getting the business owner to see the value your services offer.....
Once you can make them understand the "value" of that $500 fee...you will do well in this business...


Good Luck,
Ken
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Unread 12th June 2009, 10:46 AM   #39
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Ken,

I think the best thing for offliners to do is concentrate on those that don't even blink an eye at the cost....the cosmetic surgeon, personal injury attorney...you get the idea..its so much easier than trying to sell the pizza guy or some mom and pop etc...follow the money its so much easier that way.
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Unread 12th June 2009, 10:57 AM   #40
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Default Re: The Offline Cash Cow - How Much Do You Charge?

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Originally Posted by Sonomamike View Post
Ken,

I think the best thing for offliners to do is concentrate on those that don't even blink an eye at the cost....the cosmetic surgeon, personal injury attorney...you get the idea..its so much easier than trying to sell the pizza guy or some mom and pop etc...follow the money its so much easier that way.
I fully agree with this. Sell to those that won't blink.

Want to take it further?

Sell to corporations, they won't even blink at 6 figure fees.

It's much harder, I know, but 1 big bite is better than 20 small bites.

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Unread 14th June 2009, 09:13 PM   #41
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Hi Dennis,
Can you share the knowladge form the seminar on this forum as people outside US cannot attend?

Regards,
maco
Quote:
Originally Posted by DennisM View Post
Hello fellow Warriors,

The pricing here is all over the map but is NOT out of line.

I have a client I'm trying to land right now. The conglomerate has 16 websites (essentially one for each business). Get this, they're frickin considering Network Solutions as their SEO/SEM company!

YES, the SAME Network Solutions company that sells domain names at inflated prices! Here's their business model...
  • They have the 4 hour seminars in major cities charging $129 per seat.
  • Also provide a "free" website critique
  • Then sell you on the back end obviously.
Here's the link....Search Engine Optimization (SEO) Seminar - Network Solutions

I think it's a brilliant model that's similar to the "cash cow" system we're all aware of. I also like they're free webinar videos on the site. Good, free info for potential clients.

So, back to my story. This client I'm trying to win the business from here in Chicago was quoted $47,000 for basic SEO only for all the web properties. It's a 3 month contract and a "one and done" meaning Network Solutions walks away after this initial assignment. Want onging SEO/SEM? Sign here, press hard, you're making 3 copies. Who knows what they'll charge for this. The client was told "we'll talk after we get you going". Yeah right, a slick sales rep that's for sure.

My pricing came in much lower which now has them "scared" as they're questioning me on why my price is SO LOW. The good news is that the $47K is way out of their budget so I'm still in the running here. I will know next week.

I'm going to spend the $129 and attend the next Chicago event. I'll document their sales process and emulate from there. I think it will be the best money spent on this offline niche as far as training. You all should consider this as opposed to another "offline" WSO. :-)

Forgive me if it seems I hijacked this post but just wanted to share with everyone that no pricing is too nutty. It's whatever the market will bare as mentioned already.

Thanks for reading,
Dennis

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Unread 17th June 2009, 10:08 PM   #42
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Hi Maco,

I'm attending the $129 seminar in July here in Chicago. I'll be obviously taking very good notes and I'll share the details!

Dennis
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Unread 18th June 2009, 12:34 AM   #43
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Thanks for all the info! Big help.
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Unread 18th June 2009, 12:48 AM   #44
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Default Re: The Offline Cash Cow - How Much Do You Charge?

Thanks for this post. I have learnt so much on this post than a $27 value ebook on the subject
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