Why 99%+ of Flat Rate SEO Services Are a Scam

Aug 4th

SEO Question: Hello, How do site suchs as: ____ and _____ work with flat fees Where everyone else charges us up the wazoo.
Do you offer such a program for my business. - Thanks, Paul

Short answer: "Laws control the lesser man. Right conduct controls the greater one." - Mark Twain

Some People Provide Value, Others Steal Money

Long answer: Believe it or not, at one point in time I was an SEO client who bought a trashy scammy service. The site I was trying to market was terrible, they offered no link building solutions for it, and instead suggested I create copies of pages on the site with hidden links pointing back and forth to try to rank well for some obscure 5 word phrases that nobody searches for.

Now those people could have told me that my site was a poor website and I can improve it by doing x, y, and z. But they didn't care about the actual outcome of the work. They just wanted $149 and they got it. That was over six years ago, and they are still scamming people today.

Many Big Organizations Sell Scammy No-Value SEO Services

Most SEO buyers are allured by the prospect of free traffic and that free price-point sets their anchoring for the price. Further their first introduction to SEO comes from non-SEO. Many web hosts, domain registrars, clueless web designers (who talk up web standards but do no actual SEO research), and sleazy telemarketers offer low priced flat rate packages that have no value. Some of the domain registrars and web hosts run on such thin margins that they would be bankrupt without selling stuff like the scammy bolt on no value SEO packages. To highlight such scams I created dollarseo.com to show how they did not work.

Which Creates a Market For Lemons Effect

John Andrews also highlighted this issue in the past, in a post about a market for lemons, comparing the market for SEO services to the used car market:

As non-selling good cars were removed from the market, masquerading “lemons” dominated, setting the tone for the used car market, and further blocking actually good used cars from appearing. In the end, the used car market becomes a market for lemons, not a used car market.

It seems SEO has the same problem. As “boiler-room” SEO firms cold-call companies and pitch ridiculously low prices for SEO contracts, based on old and incorrect SEO information readily accessible to consumers, high quality SEO firms start looking “too expensive”. Consumer research into SEO does not reveal better information, since that knowledge comprises a significant portion of the value SEO consulting, and is thus not freely published. The entire market for SEO services starts to become a market not for actual search engine optimization, but more a market for “snake oil SEO” than true SEO.

Consider the Baseline

To further put the economics of SEO in context, any great SEO should be able to profit from marketing their own websites about their own interests. If I was still interested in baseball cards (like I was in high school) I have no doubt that I could make 6 figures a year promoting a website about baseball cards. That interest faded. But any interests I have I can attempt to monetize. That sets the barrier kinda high for client services. Why would I market someone's thin affiliate site selling Viagra cheaply when if I poured the same effort into my own sites which I love I would make far more profits?

Competent SEOs Have Many Options

Because of snake oil SEO salesmen (and people who want to buy something cheap) the SEO market is very hard to extract money from in service based businesses unless...

  1. you run your own publishing business (monetized through affiliate ads, contextual ads, lead generation, direct ad sales, creating & selling your own products + services) and optimize your own websites (which we do)
  2. you sell information and/or tools that others can use to apply to learning SEO (which we do)
  3. you sell other niche services (like keyword research or link building) that help clients, but are only a piece of the overall strategy (we do not do too much of this, but sometimes do)
  4. you have very few select high end client relationships (which we do)
  5. you hire a bunch of salesmen to sell worthless trash to the bottom 80% of the consumer market. (which we do NOT do)

This site is about 90% of my labor and about 30% of our profit. But we still run it for a variety of reasons...

  • it is one of my favorite hobbies
  • income diversity
  • running this site (and interacting with hundreds of smart SEOs) helps give us more feedback on international markets and inform some of marketing strategies
  • there are a lot of ways to make money online that are somewhat dirty, but this site is pure as snow and helps thousands of families put food on their tables.

Some Markets Are Competitive & Expensive

Anyone who is selling flat rate SEO services is selling a service priced without exploring the market and learning how competitive it is. Ranking well for credit cards might be worth millions of dollars. But it might also cost that much to rank. Ranking for Salem, Oregon bus rental is far easier and can be done using less than 1% of the capital investment.

Worse yet (for the consumer of a flat rate SEO service), SEO is a winner take most market. Most people click on the first page of the search results, with most those clicks happening on the top few listings. So lets say one of the flat rate companies was surprisingly not a scam and actually gave a crap about your business. This is doubtful in most cases, but lets just consider it. Well if they under-price the flat rate and rank you on page 2 or 3 you still are not going to get very much traffic, and (in spite of them trying their best on limited resources) you still probably lost money because page 3 of the search results = fail.

Is Google Flat Rate?

And here is another way of looking at it. Google AdWords doesn't sell their keywords for a flat rate. The words live in an auction that rises and falls with consumer demand. At the same time, advertisers who are paying Google over $10,000,000,000 a year are starting to put some of that budget into organic SEO. With the average SEO employee earning roughly $80,000 a year it is hard to believe that an outsourced discount flat rate package can compete.

Flat Rate Dream Homes Located in _____ for Only $5,000

I am not sure who came up with this analogy. I think it was Danny Sullivan (he is always great with those), but how many contractors do flat rate home building? Probably 0 legitimate ones. Everything is important from the foundation, to the number of rooms, to the materials used, and any special requests need to be considered.

Knowing if the house is on the side of the mountain, if it needs rocks cleared away, if it is in a swamp and could sink is important. Likewise legitimate SEO consulting aims to know the direction of the market, understand the brand, evaluate domain name selection, survey the market, and assess strengths and weaknesses.

Only AFTER all that work has been done to establish a foundation then you have to establish a well researched market strategy and keyword strategy. Then you need to do push marketing and other forms of marketing to build links. You might need to build 100 or 100,000 to compete. No matter how perfect your site is optimized, you generally are not going to rank for competitive keywords until AFTER some link building has been done. On-page optimization has a glass ceiling.

Rarely, if ever, do flat rate SEO service providers build quality links. And if the do buy them, then it is generally to some prescribed generic schedule rather than a specific plan catered to your market and your website. And while the provider is stuck working within that flat rate someone else is subscribing to sites like this one, learning SEO, and aggressively reinvesting their profits to further build a competitive advantage.

It is very hard for an outsourced discount service to compete with a self-interested business owner.

In the markets worth being in, pre-defined flat rate SEO rarely gets it done.

Published: August 4, 2009

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Comments

August 4, 2009 - 2:55pm

I agree with everything you say re: cheap (but worthless) flat rate SEO companies. They dominate the SME SEO market, and con thousands of small businesses every year, all at the expense of SEO agencies that actually try hard to get results for their customers.

However I think there is another side to the coin in the corporate market, with expensive "corporate" agencies that provide all of the right documentation and fancy PowerPoint slides that the E-Commerce Director needs to tick that SEO tickbox without doing any actual positive work.

I think there are a large number of those out there too, and they can be very high profile. They also bring down the industry as a waste of time and money.

August 4, 2009 - 4:39pm

I agree on the corporate front as well. Lots of people selling garbage to that market segment because they know each catch is worth a good bit and even if it does not work out well those corporations typically won't publicly mention that they got screwed (though they will in emails to us). But those SEOs do far less damage to the industry than the people working the lower end, since the corporate focused practitioners tend to service far fewer clients.

But with the corporate stuff it doesn't take much to create lots of value if they already have a well linked to website, and if you care to do a good job you rarely get paid anywhere near as much as 1% of the value you created.

With a recent client project a couple days into it we spotted a major issue and told them about it right away. We had them reformulate the page titles in 1 section of their site to pick up a couple high value modifiers they were missing and that tip alone led to over a million dollars a month in profits (not sales).

We offered lots of other tips and 6 months after the consulting project is over their web traffic is up 50%, and they still only did less than half the stuff we mentioned.

We get no recurring income from that project, and since they were slow to pay us, the project already more than directly paid for itself at least 10 times over before we got our full payment (and that does not even account for the higher baseline traffic level).

August 4, 2009 - 3:23pm

I agree. Here in the UK, some of the top ranked (for some good SEO terms)companies are really bad. Not only do they have huge amounts of paid links, but offer clients terrible link building services and charge a fortune. This is why 'SEO' gets a bad name.

August 4, 2009 - 4:41pm

The sad truth is in some instances Google may count a lot of the trashy links. If they didn't some of those companies would not be ranking. But if Google counts it who are we to fault it?

But doing shoddy work for clients is horrible. One person I recently talked to was working with a big US SEO company who ran an AutoPligg spam tool around the web as the link building strategy for that client. And they had a really old, established, and trusted company site that ran into some ranking issues from that terrible strategy.

August 4, 2009 - 3:49pm

Exactly right SEO-Doctor, in the UK some of what you hear about SEO companies goes a long way in explaining why SEO getting results is up there with pixies and perpetual motion.

It makes pricing very difficult as many don't know/don't want to know what is involved and have seen flat rate companies first.

That said, in this industry, good clients are long term, so while building up a good list can be slow, it's much less of a problem for the longer term.

August 4, 2009 - 5:40pm

One trouble with SEO is that you've got to build it into your business model: you can put it on an existing site like deodorant, but you won't touch the results of someone who's built into to their business.

To take an example, I took on an SEO client because I wanted to learn how to function in a market different than the ones I usually work in. She'd already registered a domain name: a neologism that nobody would ever search for.

It took quite a lot of explaining to convince her that: (i) she ought to get a different domain (maybe even 5-10 in her case) and (ii) domain names are c-h-e-a-p. Even an $800 name bought from a domainer is cheaper than hiring a good graphic designer.

And that's the problem with working with clients. Why spend time convincing them that all their instincts are wrong when you can just do things right for yourself and take the profits to the bank.

August 4, 2009 - 6:15pm

Absolutely...with traditional client work sometimes you would do better starting from scratch on a smaller investment if you were just allowed to bake a winning strategy into the game. Some clients fight every suggestion though...which is why publishing is so much more scalable (at least if you care about delivering results and earning a living, as compared to the people who do the flat rate garbage and just steal money).

August 4, 2009 - 7:42pm

If you don't charge a flat rate, how would you work out a fee for a client?

August 4, 2009 - 10:33pm

Well of course you can charge a flat monthly rate after you do a bit of investigation as to what market they are in and what they need done, but my point was that the people who had flat upfront price points for full on SEO packages ***without even seeing the client site*** (and thus knowing nothing about the market or customer) are generally selling trash.

August 4, 2009 - 8:53pm

Aaron Great post. I've been mulling over some of these ideas as I move to offer more seo services to my clients and your commentary always hits the nail on the head.

I get asked the same question "Where is your flat rate package?" and with a sigh I start a similar spiel..I may just link them back here.

I guess the goal should be to educate the client how they can work out the business case for good seo and the benefits to them..a good business case will show that at the end of the day great seo will cost them nothing....It's just that many clients..even if I calculate the benefits for them get their perspective skewed by the scammer down the road who promises more for less.

I guess the proof is in the pudding.

Great post.

Ed

August 4, 2009 - 10:33pm

I recently got asked by a middle-man for a one-sheet of pricing. I said I didn't have one because I don't work like that, and the middle-man pretty much insisted - saying the client really wanted it. So I created one that basically said "There are no set prices - every project is different and pricing flexes based on the requested specs" and had very general ranges (which is what I told him to begin with). I did not cry when they stopped calling...

August 5, 2009 - 12:28am

another great post Aaron,

I worked for a couple of months for a small SEO business with 4 staff in total. They really knew very little about SEO and charged customers $400 - $1000 a month and asked me to spend about 2-3 hours on their site for that.

When that included compiling a report with analysis etc there was really very little value customers were getting in a such a short time with no capital to invest in their site.

August 12, 2009 - 11:38am

I always enjoy reading these kind of posts, Aaron. It gives a good feel for how other people work, which is a rare insight.

I'm stunned to hear that the average SEO in the USA is earning $80,000...I wrote about the state of the UK SEO market and seems like we are going through a boom period:
http://www.seo-scoop.com/2009/06/09/the-state-of-the-uk-seo-jobs-market/... still on catch-up at around $52,000 average in the UK (although these figures are the one's that are advertised and a fair bit of negotiation will be change that figure I expect).

Cheers,

Ben

August 13, 2009 - 5:36am

I dont think that you can judge an seo on the price that he charges. Someone can charge you a flat rate for certain services that he provides on a constant basis. If someone tells you I will get you 10 links per month on pr3 websites and charges you 100$ per month flat rate you are not getting scammed.

The way i see it, its not about how much or how they are charging but about WHAT they are doing for you and how they are COMMUNICATING the work being done. Many scammy seos cant tell you what they will be doing because they doing have a plan. Its about about the plan. If an SEO can lay a plan on the table for you and charge you a flat rate it can work out really well!

August 14, 2009 - 2:50am

The point of the post was NOT that a flat rate per month price = scam.

The point I was trying to make was that if you buy an all-in-one solution, which claims to be all-in-one, and is priced at a set rate BEFORE the practitioner sees your site then they usually are selling a bag of smoke.

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