Are you a Premium brand or Cost Efficient brand?

12 replies
I have recently started my own SEO/Web Design business for my local city. The majority of the work is to be outsourced to contractors overseas, due to being cost efficient, however I am still going to use reputable staff.
I am still in the Research and Development stage of things and wanted to ask this question to you all:

If this was your business (or in your own business currently);
- You would position your business as the 'cheap' and 'cost saving' alternative
OR
- You would position your business as the 'premium supplier' with a higher price tag, and obviously higher paid contractors

I suppose realistically it is probably better to try and find an appropriate medium between these. Or to at least START this way and increase the margins and become a premium brand once there is more of a reputation and portfolio behind the brand name.

Anywho, I wanted to get your opinions and advice on this and thought it would make for an interesting discussion.

Cheers,
Adam.
#brand #cost #efficient #premium
  • Profile picture of the author JohnMcCabe
    Adam, in a service business like SEO, positioning yourself as the cheapo, low-price guy is asking for trouble. There's always going to be somebody who is willing to race you to the bottom. Even if you survive, your margins will be so thin that you'll be very vulnerable.

    Better to be the premium brand, or even a boutique brand.

    By "boutique", I mean specializing in a particular type of business or market. Maybe you're the IT brand for pizza guys, or car dealers, or...

    I remember a piece of a Dan Kennedy seminar I heard some years back. Dan was just starting out and worried about charging too much. His mentor told him he needed brass balls to make it big as a consultant.

    He advised Dan to start with the absolute highest rate he could imagine charging. Then double it. Then sit in front of a mirror and practice stating that doubled rate until he could do it without flinching.

    His first client paid him that doubled rate without blinking.

    I think Dan has added a couple of zeroes to his rates since then.

    Be the premium brand. In addition to making more money, you'll work with a better class of client.
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    • Profile picture of the author salegurus
      Originally Posted by JohnMcCabe View Post

      Adam, in a service business like SEO, positioning yourself as the cheapo, low-price guy is asking for trouble.

      Better to be the premium brand, or even a boutique brand.
      Was about to say the exact same but John beat me to it...
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  • Profile picture of the author CyberAlien
    You don't need to label your self at all. Just say that you offer high quality services at affordable prices. Pricing is relative to the person looking at it - $5000/month may be nothing to some business owners while others would never even consider it.

    This is one of the reasons why so many SEO companies ask for your info before contacting you with the pricing. Once they know what your budget is, they can let you know what they are able to do within that budget.
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    • Profile picture of the author HzCy
      Originally Posted by Chase Watts View Post

      You don't need to label your self at all. Just say that you offer high quality services at affordable prices. Pricing is relative to the person looking at it - $5000/month may be nothing to some business owners while others would never even consider it.

      This is one of the reasons why so many SEO companies ask for your info before contacting you with the pricing. Once they know what your budget is, they can let you know what they are able to do within that budget.
      Ye, thats pretty well said.

      Just dont worry much about the price, tell about your awesome service.

      Think about it, if there will be 100 customers a few will be ready to pay more than others.

      So focus on customers building and not the price
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      • Profile picture of the author Steve B
        I agree with John. Playing cutthroat and fighting the low-ball rip-offs is a losing game. Steer clear.

        I think the best strategy is to offer a premium quality service and make it unique. If you offer services in a way that they can't be compared with any others you will be able to charge what you want without complaint from your customers.

        The uniqueness could be in the product services themselves, in the way the are bundled or packaged, or even in whom you target to be your customers.

        High quality, focused, unique services will always stand out from the crowd which is obviously a concern in the very competitive SEO niche.

        Good luck to you,

        Steve
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  • Profile picture of the author ronrule
    Originally Posted by addyonline View Post

    I have recently started my own SEO/Web Design business for my local city. The majority of the work is to be outsourced to contractors overseas, due to being cost efficient, however I am still going to use reputable staff.
    I am still in the Research and Development stage of things and wanted to ask this question to you all:

    If this was your business (or in your own business currently);
    - You would position your business as the 'cheap' and 'cost saving' alternative
    OR
    - You would position your business as the 'premium supplier' with a higher price tag, and obviously higher paid contractors

    I suppose realistically it is probably better to try and find an appropriate medium between these. Or to at least START this way and increase the margins and become a premium brand once there is more of a reputation and portfolio behind the brand name.

    Anywho, I wanted to get your opinions and advice on this and thought it would make for an interesting discussion.

    Cheers,
    Adam.
    Low prices mean you'll always get the bottom of the barrel customers who think $300 per month is a lot of money, and expect you to perform miracles to get it.

    The higher your price, the more attractive you'll look to the companies out there who understand search marketing and have realistic expectations. There's a company here in Tampa that's doing about $10 million a year from mostly content-driven SEO - they've built their brand solely around focusing on market sectors that can spend a minimum of $2,000 per month. It weeds out the riff raff ... one of their customers is paying them nearly $40,000 per month.

    The serious customers, the ones with the money to spend, want to work with the best and they're willing to pay for it. But you'll never get that customer if you're also the guy who does cheap SEO packages.
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    • Profile picture of the author JohnMcCabe
      Originally Posted by ronrule View Post

      The higher your price, the more attractive you'll look to the companies out there who understand search marketing and have realistic expectations. There's a company here in Tampa that's doing about $10 million a year from mostly content-driven SEO - they've built their brand solely around focusing on market sectors that can spend a minimum of $2,000 per month. It weeds out the riff raff ... one of their customers is paying them nearly $40,000 per month.
      This is exactly what I meant when I used the term "boutique" agency.

      Don't worry about getting every customer. Focus on building a portfolio of the right customers.
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      • Profile picture of the author ronrule
        Originally Posted by JohnMcCabe View Post

        This is exactly what I meant when I used the term "boutique" agency.

        Don't worry about getting every customer. Focus on building a portfolio of the right customers.
        Exactly. I often use the analogy of comparing Kia to Jaguar - Kia "makes more money", but look at how much more work and material costs it takes for them to do it ... they have to sell five times as many cars as Jaguar to make the same cash. That's more money spent on marketing, labor, steel, warranty and service work, etc. Meanwhile, Jaguar retains their "coveted brand" status by being high-priced and exclusive.

        And on that subject ... like it or not, fair or not, you're being judged by your prospective client depending on which one you pull up in. Especially if you're in the SEO/Marketing world, they aren't just looking at your portfolio, they are looking at you. If you're going to tell me you can manage my marketing money better than I can do it myself, you had better look the part - I can't see your bank account, but I can see how you dress, how your shoes and nails look, and what you're driving to give me some indication of whether you're successful or not. It doesn't mean it's accurate, but people are doing it and sometimes you have to play the game.

        If you caught me outside of the office, I'm probably wearing a basic tee shirt and driving a mud-covered Jeep. My preference. But if you're at my office, you're seeing a new Corvette, expensive Tuscan decor, and a clean-cut executive wearing $150 shirts. Does that make me a pretentious douche? Maybe But the subtle "I'm successful" presentation gets the sale more than a busted up Jeep, t-shirts, and bright primary colors and pop-art would, and it supports the pricing model I would charge them. The "broke people" think they can't afford me and don't bother, and the people who have the cash see the presentation and subconsciously think exactly what I want them to think: that I must be doing something right.

        If it were up to me, I'd be wearing shorts and parking the Jeep with one wheel on the curb. But I'm not "F You" rich yet
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  • Profile picture of the author addyonline
    This is some awesome and very re-assuring feedback.

    Thank you all for your input!
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  • Profile picture of the author Tom Reed
    How about a "premium" brand that still offers the greatest value?

    Premium and value are not mutually exclusive and should really be tied together.

    Some products such as perfume, cars, watches, etc. tend to focus "premium" on image versus value but that's a different type of market. In the case of Seo, "premium" can still be "value" based and this value can justify the premium price.

    The vast majority of our customers opt for our highest "cost" Platinum package because they view it as the best "value" for their money.
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    • Profile picture of the author ronrule
      Originally Posted by Tom Reed View Post

      How about a "premium" brand that still offers the greatest value?

      Premium and value are not mutually exclusive and should really be tied together.

      Some products such as perfume, cars, watches, etc. tend to focus "premium" on image versus value but that's a different type of market. In the case of Seo, "premium" can still be "value" based and this value can justify the premium price.

      The vast majority of our customers opt for our highest "cost" Platinum package because they view it as the best "value" for their money.
      That can work as long as the gap isn't too wide. It's hard to be both the cheap guy AND the expensive guy, but you can definitely steer customers into higher-priced items provided there is still some value in the low ones. A performance-based pricing model can help with this too, where you bump your customers pricing based on results - that eliminates the barrier to entry for a lot of people, and doesn't lock you in to low-paying customers forever.
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    • Profile picture of the author JohnMcCabe
      Originally Posted by Tom Reed View Post

      How about a "premium" brand that still offers the greatest value?

      Premium and value are not mutually exclusive and should really be tied together.

      Some products such as perfume, cars, watches, etc. tend to focus "premium" on image versus value but that's a different type of market. In the case of Seo, "premium" can still be "value" based and this value can justify the premium price.

      The vast majority of our customers opt for our highest "cost" Platinum package because they view it as the best "value" for their money.
      In pricing discussions, being the "value brand" is often just code for "cheapest". For that matter, "premium" is often code for "higher priced" or even "highest price".

      The actual value of the offer has little to do with it.

      For example, Jaguar has built a reputation as a premium car brand. Supply is limited and the prices high compared to comparable vehicles. Yet it isn't all that hard to to find Jag owners whose pride and joy spends so much time in the shop the mechanics could charge rent.

      On the flip side, for a buck or two I can get a cup of Mickey D coffee every bit as good as what I get for twice that at fancier "premium" places.

      In this narrow discussion topic, it's all about perception.
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