34% Of Local SEOs Make Less Than $30,000/Year. Why?

As the local search industry evolves and becomes more complex, the role of local search consultants and agencies becomes more critical. Complexity is increasing across most areas of our fast-growing industry, which makes “local search” all the more confusing for local business owners.

This complexity is driving increased demand for local search services. SMB owners need local specialists to decipher the multiplicity of factors and opportunities available and to guide them through the tangle of local search.

Why, then, with this increase in demand, are so many earning less than $30,000/year and having to sell their services harder than ever before, according to our findings?

My theory is that there is a glut of search providers in the industry, which is driving up competition and pushing down prices. It’s a growing industry which attracts new people to it every day. Given the complex nature of local search and the required skills and experience to be good at it, these lower prices make it difficult for many SEOs to make a decent living.

After all, being a consultant or agency is about much more than just doing the job — you need sales expertise to land the client in the first place.

The “Joy” Of Sales & Leveraging Relationships To Win New Customers

The stats I’m citing come from a webinar my company (BrightLocal) recently hosted, which looked at sales strategies and tactics for local search agencies.

During the webinar, we asked the 500+ attendees to answer three questions about their attitude and tactics for selling their services. We have coupled the results of this small survey with some insightful sales and marketing data taken from the 2013 Local SEO Industry Survey (conducted in Jan-Feb 2013). Below, the results.

Q. What Was Your Turnover In The Last 12 Months?

  • 34% of the SEO respondents’ turnover was less than $30,000
  • 17% said that their turnover was above $500,000

    What was your turnover in last 12 months? chart

    Source: BrightLocal Local SEO Industry Survey 2013 (1,150 respondents)

Comment:

There is a broad range of earnings in the industry, but a high number of consultants/agencies earn very little for their services.

This could be a symptom of too many providers entering the industry and competitive underpricing of services. It highlights how important effective promotion is to the success of agencies. Just doing the job isn’t enough, you need to ‘sell’ your services to stand out from the competition.

Q. Which Channels Are Most Effective For Attracting New Customers? (Select Up To Three Channels)

  • Three of the most effective channels for attracting new customers are offline channels
  • Word of mouth is the most effective channel – 91% said this brought them the most leads, while SEO was the 2nd biggest driver of leads and customers (46%)

Which channels are most effective for new customers? chart

Source: BrightLocal Local SEO Industry Survey 2013 (1,150 respondents)

Comment:

Relationships and reputation are the key to winning new customers in the search industry.

The four most effective channels are all focused on establishing or leveraging relationships and building a positive reputation for yourself, which encourages local business owners to put their trust in you.

Three of these channels are offline channels, which hammers home the importance of establishing real relationships even though we’re selling digital services.

I really like the idea of local meet-ups. They are a great platform for you to demonstrate your knowledge, offer value to potential customers and “press the flesh” to build those nascent relationships.

Q. How Many Leads Do You Proactively Contact Each Month?

  • 32% of SEOs don’t make outbound sales enquiries (down from 46% in 2012)
  • 11% of SEOs make over 50 sales enquiries each month

How many leads do you contact? chart

Source: BrightLocal Local SEO Industry Survey 2013 (1,150 respondents)

Comment:

Fourteen percent more consultants are engaging in outbound sales in 2013 vs. 2012, while many more agencies have ramped up their sales activity to contact 50+ customers each month. This increased focus on sales is further evidence of the competitive landscape we work in.

Looking at the ‘Marketing Channel’ chart above, only 20% of SEOs said “outbound calls” was an effective acquisition channel. So, increased time spent on this may not yield the best results for agencies — they’re better off focusing on fostering existing relationships and building a physical, local network to reach local business owners.

Q. What Is Your Success Rate At Converting Leads To Customers?

  • Average conversion rate = 42%
  • Conversion rate dropped from 2011 to 2013

what is your success rate at converting leads to sales? chart

Source: BrightLocal Local SEO Industry Survey 2013 (1,150 respondents)

Comment:

Average conversion is pretty strong in the industry (most sales people would be happy with a 42% close rate). However, in comparison to 2011, the conversion rate has dropped — further evidence that selling search services is getting harder (for some businesses, at least)

Q. How Do You Rate Your Sales Ability?

  • 65% of respondents said they were quite good or very good at sales
  • 29% said they were not good bad or very bad at sales
  • 6% said they didn’t know

How do you rate your sales ability? - chart

Source: BrightLocal Local SEO Industry Survey 2013 (1,150 respondents)

Comment:

The ability to confidently communicate and “sell” yourself is essential to the success of any service business. But sales isn’t simply about picking up the phone and plugging your offering to anyone who’ll listen. It’s about understanding the needs of potential customers, matching your services to those needs and building a relationship with the customer.

As consultants/agencies, there are two sides to the job we do – selling our services and delivering the work. You can’t have one without the other (not long term, anyway) and, truth be told, not many search marketeers are good at both.

If you love doing the work but get a cold sweat at the prospect of picking up the phone or hosting a local meet-up, then you need to overcome those doubts ASAP. Or find an alternative way to promote  yourself — it’s time to leverage those existing relationships and build up your reputation so customers come to you rather than you approaching them.

Q. Which Part Of The Sales Process Do You Find Most Challenging?

  • 32% of respondents said they found prospecting the most challenging
  • 31% said they found getting past the “gate keeper” most challenging
  • 25% said they found closing the sale the most challenging aspect

Which part of sales process do you find most challenging? chart

Source: InsideLocal Webinar: Effective Sales Strategies for Local Agencies (383 respondents)

Comment:

It’s no surprise that where most people struggle with sales is at the start and at the end of the process — these are the high pressure areas.

Seeking out the right prospects to contact and then getting a meeting with the decision maker is vital but also a challenge. Most people are fine once they’re in the room and able to present their services and handle questions.

The key with sales is to offer value to the person you’re pitching. To get the meeting, you need to convince her that a meeting with you is worth its weight in gold, or at the very least 60 minutes of time well spent.

You need to turn the emphasis on to them. You’re not trying to sell your services;  you’re trying to solve their problems and make their life better.

It’s at this stage where relationships and reputation help enormously. If you come to them with a personal endorsement or a contact in common, it breaks down those initial barriers and makes getting that first meeting much easier.

Q. Do You Enjoy Selling Your Services?

  • 56% of respondents don’t enjoy selling their services
  • 44% of respondents enjoy selling

Do you enjoy the sales process? - chart

Source: InsideLocal Webinar: Effective Sales Strategies for Local Agencies (412 respondents)

Comment:

If working on sales doesn’t come naturally to you, it’s hard to turn it into something you enjoy. You need to find a way to enjoy it or gain some satisfaction from it — or hire someone else to do it for you. Having a good, robust sales process is essential; this removes much of the fear and frustration, allowing you to execute a clear, ordered plan each time.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Local | Local Search Column

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About The Author: is Founder & CEO of BrightLocal.com. BrightLocal provides local SEO tools for local businesses; see their research section for the latest findings about the local search market.

Connect with the author via: Email | Twitter



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  • http://www.accendomarkets.com/ Syed Rabbani

    Great post. Basically, the price difference between two agencies make people confused and most cases they go for the cheap one.

  • Paula

    In Spain most of SEOS are under 30.00€ too

  • Emily Hunter

    These are definitely some telling statistics. The concept that an SEO doesn’t like getting involved in their own product is just a little bit crazy to me — I’m with you, though. I think that there’s a LOT of SEOs because people seem to equate being on the net with ‘easy’ and seo with jamming a few more keywords in there.

  • Tony Dimmock

    Insightful post Myles – thanks for researching this.

    So, converting leads has declined over the last 2 years, while SEO’s think they’re quite / very good at selling! Most don’t like prospecting and most don’t like selling their services.

    As most don’t like the beginning or end or the sales process, they’re going to need to learn fast, else they’ll continue to undersell themselves.

    Plus SEOs really need to understand the value they can bring to clients market-share and bottom-line profit..

  • Eric

    When I first read the title I thought it was obvious, most local seo “people” are working for local businesses. Of course, a local ma & pa business does not have the cash at hand to afford the high priced agency cost, so they are forced to work with those that will accept lower rates. After reading the post’s survey results, I would also add that those people reporting way over that 30k threshold are probably working for franchise type businesses where they have multiple local locations to afford that high priced firm. Always welcome to feedback on that opinion though.

  • Sukh Singh

    Great post Myles, I dont know about other seo’s but I find as I’ve acquired more experience in SEO that the sales process has become easier. I see the knowledge I have gained as ammunition and the sale as a gun fight (I know its a lame analogy, its early over here!) so the knowledge gives me confidence.

    Regarding Local seo, I think the difficulty of it now is a great opportunity for SEO’s to separate themselves from the others by making sure they are at the forefront of local strategy, and have the good work to back it all up.

  • Ronnie’s Mustache

    Yep. Local business networking groups can be your #1 source of client acquisition.

    Don’t waste your time on businesses that are looking for the $300/month package. They will not be satisfied and you will be making $5/hour trying to squeeze whatever you can out of nothing.

    Interesting article/study, Myles!

  • http://www.brickmarketing.com/ Nick Stamoulis

    I think the biggest problem is that there is a very low barrier to entry into the world of SEO. Anyone can claim to be an expert and start selling their services. For site owners and small businesses that don’t know any different, if two agencies are saying the same thing and one is 1/2 as expensive of course they’ll go for the cheaper option.

  • myles anderson

    Thanks for all the great comments. What I find most useful in this data is how important having a good reputation & relationships are to building a successful SEO business. This is hardly ‘news’ to most business owners, but we happen to work in a such a virtual, nascent and abstract industry that the real world often seems far removed. For newbies to the SEO industry the message is clear – don’t expect overnight riches from becoming an SEO; but if you’re able to gather knowledge, hone your skills, achieve results for your customers and build a solid reputation then you WILL be successful. Also don’t be shy about leveraging your relationships & reputation to win new customers.

  • http://www.ryan-key.com/ Ryan Key

    The current Government has destroyed the middle class. Although the findings may be very accurate. Why is there such a gap in the middle. One reason might be the Affordable Care Act and not being able to get a Government subsidy if you make a certain amount annually say 60K or less. Where as the higher end agencies in the 500,000K mark are serving enterprise level clients and still pay their SEO’s around 30K.

    I’m not sure if this the entire reasoning behind local SEO’s being paid less for making their clients more. Or if they are just terrible at selling and cannot show real results or measurement. Maybe they should take a commission based local SEO plan. How would this be measured as far as value? http://www.ryan-key.com

  • http://prenatal-cradle.com/ Prenatal Cradle

    In my experience as a webmaster, publisher and e-commerce executive, about 98% of people purporting themselves to be SEOs are little more than imbeciles who think SEO means getting a company to rank for its own name. These idiots are what’s driving down the value of the industry. I got into retail rather than try to persuade clients I really do know a helluva lot more than the jackass to looted him for $10,000 the year before. At one point I was earning about $300/hr and had a waiting list a mile long. Now, it’s more trouble than it’s worth. I’d rather compete against the idiots in actual search than for clients who ultimately must take one of our word over the others’ as the deep south business community has not yet evolved to the point of being able to comprehend the data that spells it out point-blank to those who know the business.

  • http://prenatal-cradle.com/ Prenatal Cradle

    You hit the nail on the head. Well said.

  • anteela

    I hardly think that the ACA has been impacting SEOs earning capacity, seeing as it hasn’t been fully implemented yet for employers and the penalties haven’t yet applied at the individual level (or were you being facetious?). I think a lot of the other users have it spot on.

    A lot of businesses price shop and since a majority of the decision-makers don’t understand a jot of SEO, they are easily convinced by snake oil salespeople. It’s hard to compete with that mentality, though a good salesperson/consultant will educate their prospective clients so they can hopefully make a more informed decision about who to sign with.

  • http://www.ryan-key.com/ Ryan Key

    I think you missed my point about SEO’s intentionally keeping reported salaries under 30K to be able to take advantage of the new law. I agree with you that most companies do not see the value in organic SEO becuase of the time it takes vs investment. I also agree that a good SEO consultant should stay up to date with the latest changes and trends via Matt Cutts and the web spam team at Google. My point for the gap was in the growing number of SEO’s or online marketers who see it as a quick way to make a decent income and also that large employers also pay SEO’s an average 30K to 50K depending on the company and level of experience.

  • http://www.ryan-key.com/ Ryan Key

    I think you missed my point about SEO’s intentionally keeping reported salaries under 30K to be able to take advantage of the new law. I agree with you that most companies do not see the value in organic SEO becuase of the time it takes vs investment. I also agree that a good SEO consultant should stay up to date with the latest changes and trends via Matt Cutts and the web spam team at Google. My point for the gap was in the growing number of SEO’s or online marketers who see it as a quick way to make a decent income and also that large employers also pay SEO’s an average 30K to 50K depending on the company and level of experience.

  • derekedmond

    Interesting numbers but you could have easily flipped the headline around to read, “40% of Local SEO’s Make Six Figures or More…” :-)

  • derekedmond

    I don’t know if you can interpret that in the data provided but agreed on a general level. Without a comparative between turnover and experience it’s difficult to know whether highly “experienced” SEO’s are offering below market rates (whatever that may be).

    The vast majority of respondents indicating they made $30K or less could very well have less than 12 months experience – or are even completely new in the field and this is their first job.

    If anything, having the years experience correlation could provide inspiration for aspiring marketing professionals to get into the industry because the barrier to entry is low and opportunity is (could be) great.

  • MDS

    I believe most local clients tend to skew on the mom and pop store side rather than big box, local marketers likely gain smaller shops as clients and in turn make less money. Big retailers bundle local into their integrated marketing plan therefore a “local” person may not touch the campaign.
    As having been in the situation of managing local campaigns for a national retailer I do know we essentially made large strategic decisions on how to market locally then handed those down to a coordinator to execute tactically. The plans were specific in detail and didn’t require someone with a great depth of knowledge to implement, just a smart person with common sense.
    I agree with local marketers pulling in roughly $30k annually, to me it makes sense.

  • Julien Brandt

    Myles great article, thank you the detailed writeup! A couple questions:

    1) Does the $30,000 average refer to individuals only? I would assume that many of the respondents (especially the 40% reporting 6 figure turnover) are agencies and SEO companies. If this is the case It seems like the average for individual SEOs is likely even less.

    2) Do you have any stats on the average amount of time local SEOs spend on their campaigns and the average fees they charge? I’m sure this would be very interesting to a lot of us if its not something you have already reported on.

    My company OrganikSEO.com has been a long time user of BrightLocal, thanks for providing such a great tool!

 

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