The second business I ever started was an SEO agency. By no means did I see myself creating an agency… I more so stumbled upon it. But before I go into how I built a seo agency and made millions from it, let me give you a quick background on how I stumbled upon it…
The first website I ever started was a job board called Advice Monkey and I was trying to get the website ranked for terms like “job search” and “tech jobs”. I hired a few SEO agencies to help me out, but none provided any results. After tens of thousands of dollars gone down the drain, I had no more money, and I had no choice but to learn how to optimize Advice Monkey for search engines… all on my own.
From reading sites like Search Engine Watch and SEObook, I started to get the hang of SEO. I made on page changes to my own site and learned how to build links by talking to people like Patrick Gavin on a weekly basis.
Sooner or later I started to rank really well for job related terms on Google, but the business didn’t succeed because of these reasons.
When my first venture failed, I decided I was going to quit entrepreneurship and just get a college degree like everyone else, and get a job after graduation. To get a head start on things I started to take college classes while I was in high school.
The first college class I took was Speech 101. The professor asked us to give 3 speeches on any topic of our choice. One of the topics I chose was on seo… it was called “how search engines works”.
One of the gentlemen sitting in the room during my speech was a sales rep at Elpac Electronics and he approached me after my speech. He then told me that the company he worked for was looking for a seo. He introduced me to the marketing manager at the company and they hired me as a contractor for $3500 a month.
After a few months of working with Elpac, their rankings shot up to number 1 on Google for terms like “power supplies” and they were so happy they introduced me to other companies they knew. Within months I was pulling in around $20,000 a month from SEO consulting.
That’s when I started a SEO agency… here’s how I built it to 7 figures:
The best clients come from referrals
I know this goes without saying… the best clients you will ever get as an agency is from previous customers, friends, or even family members. When someone refers you, the chances of you closing that deal are really high.
But if you treat that client poorly, not only will they stop paying you, but you’ll notice that the number of referrals you get on a regular basis will slowly start going down. For this reason you have to have a clean reputation and be known for taking care of clients even when you don’t think it makes sense to.Â By doing this in the long run you’ll continually gain new clients from referrals.
When I first started the agency, referrals were my primary source of revenue, but once I learned how to gain customers through marketing, it become our 4th most popular channel.
You can’t rely on referrals
I used to rely on word of mouth marketing and referrals to be my main revenue source. It’s easy to build a 6-figure SEO agency assuming you can provide. It’s really hard to create a 7-figure business from it though.
Here are the main ways I got new customers:
- Blogging – consistently blog about seo, social media marketing, conversion optimization and content marketing. The more technical your blog posts are and the more often you use data to backup your points, the more leads you will get. For example, this post on “how content length affects rankings and conversions” drove 51 leads, while my post on “don’t forget the marketing in content marketing” only drove 18 leads. Both posts did well on the social web, but the one on content length contained more stats and data. In general I’ve seen that posts with stats and data drive roughly 3 times more leads than posts that don’t contain any data or stats.
- Speak at conferences – seo and marketing conferences used to be the place to get new customers. I used to pick up at least $100,000 per marketing conference I went to that had over 1500 attendees. Sooner or later all of the other seos and marketers started to speak at the same events and the amount of new revenue I acquired from these events drastically shrunk. I later learned that the best events to speak at are non-industry events. For example, when I spoke about online marketing at an online gambling event, I was able to lock PokerStrategy.com in a $1.2 million contract. From finance to fitness and everything in between, non-industry events typically brought in 4 times more revenue than industry events. You just have to make sure you are speaking at conferences that charge at least $1000 per ticket as that means you are usually talking to an audience that can afford your services. And when you speak, you have to have to talk about specific tactics people can leverage, show examples of companies using those tactics, and wrap it up with data that shows it was successful.
- Help out bloggers – the last method I used to gain new customers was to reach out to the Technorati 100 and offer them free SEO. Most of them didn’t take me up on the offer, but a handful did. From TechCrunch to Gawker Media… I used to do their SEO for free and in exchange they would put a badge on their site that said “SEO by…”. That badge would link back to my site and drive leads. And if I got lucky, they would also do a blog post on the results I provided them, which typically led to over $250,000 in new revenue as those blogs had a large following.
Out of all the methods I mentioned above, speaking at conferences was the leading way to gain new customers, blogging was the second, and helping out bloggers was the third.
There’s always churn
Whether a client is referred to you or they found you through some other mean, sooner or later they are going to leave you. SEO is a business with high churn… it’s very rare that someone will stick with you as a client for 3 years.
Because of this you want to survey your clients on a monthly basis. Find out what issues they are having with you, your team, or company. Let them know that they should be transparent and not hold anything back.
Some of the questions you can ask are:
- Are you satisfied with the level of service you are receiving?
- What is one thing that we aren’t doing for you that you wish we did?
- Is there anything we can improve upon?
Once you have that data you should try and fix it. If you do this with them on a monthly basis and you see the survey responses improving, you are doing well. If not, you have an operational problem within your business.
In addition to surveying your clients, make sure you also provide them with a monthly report and weekly calls. The more you communicate with them the faster you will find out if they are happy or not.
What I’ve also noticed is that the more you communicate with the client, the longer they will stay with you. And I know this process may seem like a pain in the butt, but it’s harder to get new clients than it is to keep your current ones paying. So cherish your clients.
Be results driven
I had this philosophy from day 1 because I got burned by paying other seo agencies. They took all of my money, and didn’t provide much in return. Due to this, I only took on clients that I could provide results to… but I never explained that to potential clients in a way that made sense to them.
What I started doing was estimating how much more traffic I could drive companies. I would take their current rankings and use the multiplier from this table. So if they ranked number 6 for a keyword that drove them 1000 visitors a month and I thought I could take them to number 1, I would estimate that I could drive them 10,400 visitors, which is 9400 extra visitors than they currently have.
I would then take their current conversion rate, lets say 2% and their average value per sale, lets say $100 dollars and then show them how 9400 extra visitors could drive them $18,800 a month in extra revenue. I would then do this for each of their keywords and estimate how much more money I could make them each month.
By showing a potential client how much more money you can make them versus how much you are charging, it makes their decision to go with you pretty easy. The only thing they have to worry about is if you can actually provide results. To combat this you would use testimonials and case studies to show what you have done in the past.
And ideally you want to use detailed case studies that show how much money you have made other companies as well as outlining what you exactly did to achieve those results. In addition to that you want to list all of the big brands you have worked with as it provides you with more credibility.
What I also learned through this process is that though the majority of our customers were mid sized businesses, they wanted to see all of the large Fortune 500 companies we worked with, even though they were no where near that size. When we showed potential clients all of the small and medium businesses we worked with, our conversion rate of locking them in as a customer decreased by almost half versus only showing them large brands we worked with.
Once we learned this we started to work with as many large brands as possible, even if the large brand wasn’t willing to spend much with us… heck we were even willing to lose money or do their work for free.
Give away the farm
When you are building your agency, you need to focus on getting clients that pay you 6 figures a year. It’s hard to build a profitable agency and provide great results when someone only pays you a few grand a month.
The best way to get companies to pay you 6 figures is to give away the farm. Within your proposals you should have one section that breaks down everything the company is doing wrong, how they can fix it, and what it would cost for you to fix it.
Don’t worry about a company taking everything you gave them and doing it on their own… people are lazy, they rather pay you to fix their problems.
By showing them what you will fix for them in advance, they are more likely to go with you compared to if you only listed out the services you offer in a proposal. By doing this, not only will you increase your close rate, but also you can charge them a lot more.
Make sure you don’t negotiate on your prices as well because I bet other seo agencies won’t go into this much depth to lock in a potential client. Yes you maybe more expensive, but at least the company will know what they are going to get with you versus competing seo agencies.
Leverage business development
In the short run you will lose money from business development, but in the long run you’ll be able to make it up. The quickest way for you to increase your revenue is to be the outsourced arm of bigger agencies.
As an SEO company, look for ad agencies to partner with, as there are way bigger ad agencies than seo agencies. Feel free and cold call them, offer to help them for free with their own website, and if you do well they’ll drive a lot of clients to you.
It’s a tedious process, but it works really well. We used to do this and we would get a steady flow of leads from ad agencies. You just have to be willing to lose money upfront, as you will be doing their seo for free in the short run.
When dealing with these ad agencies let them know that your minimum price is 6 figures a year, as they shouldn’t have a problem locking in big contracts for you. They’ll probably try to white label your service, which you should be ok with as they will be driving you revenue and taking out a lot of the hassle by dealing with clients.
Never stop giving
Last, but not least, one way I grew the seo agency was by helping out people for free. When I first started out people helped me out for free, so I would try and pay it forward by doing the same thing.
Even to this date I try to respond to every email I get and I respond to every comment that gets posted on this blog. Whatever I can do to help people out, as long as it doesn’t break my bank, I do it. Why… because I really care about you, just like people cared to help me out when I was a kid starting his first venture.
You will build up a lot of karma points and some how, you’ll notice that people will say great things about you to other businesses or people, and it eventually will get you more business. But the key is to not expect anything in return when helping out people.
Using all of the methods I covered above, I was able to build a business that did well into the 7 figures a year in revenue and profited millions of dollars as well.
The one thing to keep in mind is that I didn’t touch on the fact that my agency actually provided real results. From ranking companies in the top 3 results for terms like credit cards and life insurance, to helping boost their sales, we provided a positive return on investment. If you do everything I mentioned above, but fail to provide results as a seo agency, you won’t be in business for long.