The second business I ever started was an SEO agency. By no means did I see myself creating an agency… I simply stumbled upon it. Before I go into how I built an 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. 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 down the drain, I had no more money and 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 getting 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.
Eventually, I started to rank really well for job-related terms on Google, but the business failed because of these reasons.
When my first venture failed, I decided I was going to quit entrepreneurship, get a college degree like everyone else, and get a job after graduation. To get a head start on things, I started taking college classes while I was in high school.
The first college class I took was Speech 101. The professor asked us to give three speeches on any topic of our choice. One of the topics I chose was on SEO… It was called “How search engines work”.
One of the gentlemen sitting in the room during my speech was a sales rep from Elpac Electronics. He approached me after my speech and told me that the company he worked for was looking for an SEO person. He introduced me to the marketing manager of the company, and the company hired me as a contractor for $3,500 a month.
After a few months of me working with Elpac, their rankings shot up to number one on Google for terms like “power supplies”. 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.
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That’s when I started an SEO agency… And here’s how I built it to seven 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 to you, 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 your clients even when you don’t think it makes sense to. 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 became our 4th most popular channel.
You can’t rely on referrals
I used to rely on the word of mouth as my main revenue source. It’s easy to build a six-figure SEO agency, assuming you can provide the service. It’s really hard to create a seven-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 three 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 1,500 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 four times more revenue than industry events. You just have to make sure you are speaking at conferences that charge at least $1,000 per ticket as that means you are usually talking to an audience that can afford your services. When you speak, you have to talk about specific tactics people can leverage, show examples of companies using those tactics, and wrap it up with data that shows your methods were successful.
- Help out bloggers – the last method I used to gain new customers was to reach out to Technorati 100 companies 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 did free SEO for these companies in exchange for a badge on their sites that said “SEO by…” That badge would link back to my site and drive leads. If I got lucky, they would also do a blog post on the results they received from me, 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 means, sooner or later they are going to leave you. SEO is a business with a high churn rate… it’s very rare that someone will stick with you as a client for three 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 your company. Let them know that they should be transparent and frank.
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 to fix the identified issues. If you do this with your customers 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.
I’ve also noticed that the more you communicate with the client, the longer they will stay with you. 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 one because I got burnt 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 for whom I could provide the results… 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 to the companies. I would take their current rankings and use the multiplier from this table. So, if they ranked #6 for a keyword that drove them 1,000 visitors a month and I thought I could take them to #1, I would estimate that I could drive them 10,400 visitors, which is 9,400 extra visitors than they currently have.
I would then take their current conversion rate, let’s say 2%, and their average value per sale, let’s say $100 dollars, and show them that 9,400 extra visitors could give 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 potential clients how much more money you can make them versus how much you are charging, you can help make their decision to go with you pretty easy. The only thing they have to worry about is whether you can actually provide the results. To combat this, you would use testimonials and case studies to show what you have done in the past.
Ideally, you want to use detailed case studies showing 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 shows your 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 these customers themselves were nowhere near that size. When we showed our potential clients all of the small and medium businesses we worked with versus only showing them large brands we worked with, our conversion rate of locking them in as a customer decreased by almost half.
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 money on us… Heck, we were even willing to lose money or do the work for free.
Give away the farm
When you are building your agency, you need to focus on getting clients that pay you six 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 six 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’d rather pay you to fix their problems.
If you show your prospects in advance what you will fix for them versus only offering a list of services in a proposal, they will be more likely to hire you. This will allow you not only increase your deal closing rate but also charge them a lot more.
Make sure you don’t negotiate on your prices because I bet other SEO agencies won’t go into this much depth to lock in a potential client. Yes, you may be more expensive, but at least the company will know what they getting with you versus what they will get with competing SEO agencies.
Leverage business development
In the short run, you will lose money on business development. In the long run, however, you’ll be able to make it up. The quickest way for you to increase your revenue is to become the outsourced arm of bigger agencies.
As an SEO company, look for ad agencies to partner with as there are a number of ad agencies that are way bigger than SEO agencies. Feel free to cold call them and offer free help with their own websites. 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 six figures a year because they should have no problem getting big contracts for you. They’ll probably try to white label your service, which you should be okay with as they will be driving you revenue and eliminating a lot of the hassle by dealing with your clients on your behalf.
Never stop giving
The last, but not least, piece of advice I want to give you is to never stop giving. One of the major ways I grew the SEO agency is by helping people for free. When I first started, people helped me for free, so I would try to pay it forward by doing the same thing.
Even to this date, I try to respond to every email I get and respond to every comment 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 my first venture.
You will earn a lot of karma points, and you’ll notice that people will start saying great things about you to other businesses or people, which eventually will get you more business. But the key is to not expect anything in return when helping people.
Using all of the methods I covered above, I was able to build a business that did well into the seven figures a year in revenue and millions of dollars in profit.
The one thing to keep in mind is that my agency actually provided results. From getting companies to rank in the top three 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 an SEO agency, you won’t be in business for long.