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.