Getting my head round pricing for offline business customers

5 replies
So I've always historically played in the consumer market.

Now I'm trying to get my head round the business market and potentially cold calling customers and getting interest expressed and then suggesting the client pays $400-$600 a month or more on seo/reputation management services.

I suppose the benefit comes from telling them they could increase their turnover by 10-xx% - which if a company is only turning over $100k, means $10k, so then saying you are charging like 30-40% of that is effectively a good ROI for them?

It's just a totally different ballpark from what I am used to - going in at $400 a month seems totally un-natural...... However I guess when you add all the time up, e.g. Analysis/building web 2.0/social networks etc/creating content - you could easily spend 20 hours per month on client and that works out to $20 an hour which is really reasonable.

So I guess what I am getting at - is can most companies afford $400-$600 monthly? Independent restaurants and hotels etc?
#business #customers #head #offline #pricing #round
  • Profile picture of the author Dan R
    Originally Posted by adam westrop View Post

    It's just a totally different ballpark from what I am used to - going in at $400 a month seems totally un-natural...... However I guess when you add all the time up, e.g. Analysis/building web 2.0/social networks etc/creating content - you could easily spend 20 hours per month on client and that works out to $20 an hour which is really reasonable.

    So I guess what I am getting at - is can most companies afford $400-$600 monthly? Independent restaurants and hotels etc?
    All of the work that goes into the SEO can be outsourced and each month the difference goes straight into your pocket. The only work that you account for is acquiring the client at a monthly fee. After that, its pure residual passive income.

    You target market will determine what the customer can afford. If you are selling to a candy shop where their average customer spends $5, the price tag may scare them away...versus selling to a dentist where one lead can result in a $2000 sale.
    {{ DiscussionBoard.errors[7432716].message }}
    • Profile picture of the author Claude Whitacre
      Many small businesses are used to paying $1,000 a month for a single Yellow Page ad, maybe $2,000 a month in newspaper, direct mail, radio advertising.

      I market my online marketing program for $699 a month as bait. Meaning that they come in ready to spend $699 a month. And I upsell from there.

      There are lots of things that small business owners are used to spending $400 a month (or more) for;
      utilities, rent, taxes, advertising, their worst part time employee, shipping, the list goes on and on.

      No offense, but $400 a month is the least of their expenses. In my store, the electric bill is more than $500 a month, every month. In a hotel, they are paying more than that to dry their towels.
      Signature
      One Call Closing book https://www.amazon.com/One-Call-Clos...=1527788418&sr

      What if they're not stars? What if they are holes poked in the top of a container so we can breath?
      {{ DiscussionBoard.errors[7432915].message }}
  • Profile picture of the author Dan Grandstaff
    The real question here is how much are bad reviews or not being ranked costing the business? And can you turn that around to some degree with your services? If a hotel guest spends $100 a night, losing one guest a week because of bad reviews would cost them over $400 a month. Bad reviews would likely cost them far more than one guest a week, so it's not hard to make the case for $400 a month or more in fees. But they have to see the problem and how much it's costing them. Until then, $100 a month would be too much.
    {{ DiscussionBoard.errors[7442188].message }}
  • Profile picture of the author Nick Brighton
    What it really comes down to, is whether they can get a decent ROI.

    Every company is different - even restaurants that are neighbouring each other, for example, might have totally different budgets and profit margins.

    The difficulty with long term services is that it can be hard to justify the price before the client can see the results, if at all.

    That doesn't mean you shouldn't offer these services, but you should certainly have a way to demonstrate their typical value and make it easy for them to pay.

    Here's how:

    1. Show results from other clients that are similar to them
    2. Break down "worst case scenario" figures with them
    3. Offer payment plans for each milestone (eg. when you hit a target, invoice them)

    Also, as Dan said, justify the price not just in terms of what they stand to gain, but what they stand to lose.

    Humans are psychologically prepositioned to protect our assets, and have a greater fear of loss, than the hope of gain.

    So sell the fear of loss, rather than what could be.

    Show them how their competitors are getting the edge over them. Show them how many leads/customers they're losing each day, etc.
    {{ DiscussionBoard.errors[7442217].message }}
    • Profile picture of the author Dan R
      Originally Posted by Nick Brighton View Post

      Humans are psychologically prepositioned to protect our assets, and have a greater fear of loss, than the hope of gain.

      So sell the fear of loss, rather than what could be.
      Golden! Seems so simple but we tend to overcomplicate the process over and over again.
      {{ DiscussionBoard.errors[7442418].message }}

Trending Topics