The coronavirus pandemic is taking a heavy toll on all citizens of the world.
When the final tally is returned, it’s unlikely anyone won’t be impacted in some way.
Right now is a time of great uncertainty on many fronts.
Along with worrying about our health and the health of our loved ones, there is also tremendous financial instability.
The economy is on pause in an unprecedented way.
Jobs that were once secure no longer seem so reliable.
Those with the luxury of a full-time job are motivated to go the extra mile to ensure they stay employed.
For full-time consultants or service providers, things can be a little more tenuous.
During a time like this, anyone whose income (personal or business) will go further to retain existing customers and sign new ones.
This especially applies to SEO consultants and agencies in a time when marketing budgets are one of the first to be cut.
Economic uncertainty could prompt consultants and agencies to cut prices to strike deals, but the question remains.
Is downsizing always a good idea?
As a digital growth consultant, I oppose any cuts, even in a tough economy.
Consulting pricing is based on a calculation of value delivered that depends on the potential returns of the business, but general economic winds are not a factor.
SEO value is now the same as a month ago.
Therefore, the refresh sends a signal that this has changed somehow.
Additionally, I believe now is the best time for people to invest in a long-term, strategic SEO effort.
With so many marketing channels such as paid, display, events, and even branding efforts on pause, now is the time to regroup and build an SEO strategy that might have been deprioritized for a faster effort. in the past.
In fact, the value of SEO consulting is higher than ever, as smart leaders know that now is the time to make investments that will allow them to leapfrog competitors who are suspending all efforts during this time.
I didn’t want to leave this to my own opinion, so I popped the question to my network to hear their thoughts.
Peep LajaCEO, CXL, said:
“You might feel the need to lower your prices. It is the recession after all. However, this is short-sighted (it obviously depends on your cash reserves).
If you don’t compete on price to begin with, cutting prices is likely to hurt your brand and your bottom line for good, even when the recession ends.
Studies have shown that in many cases, the more people pay, the more value they attribute to their purchase. Price anchors perceived value. If you reduce prices during tough times, customers may start to question the original value.
The last financial crisis showed that many consumers never wanted to go back to paying “real” prices. Instead, create new low-end offerings. New products/services that cost less, but have no comparison to your existing products. This way, you can avoid discounts, while still giving people the price reductions they might need during tough times. »
Nigel Stevens, CEO, Organic Growth Marketing, gave me a similar perspective for early-stage companies. He said:
“If you’re working with early-stage companies that haven’t achieved product-to-market fit, your only option may be to cut prices — or be out of a job. I focus on businesses that are suited to the post-product market, where the company’s long-term value proposition is unaffected by current events.
If long-term value is unchanged, why should SEO prices (making the most of this valuable prop) change? And if the long-term value proposition is damaged by these events, then SEO is not going to save them! Instead of lowering your prices, think about ways to get creative with terms and compensation models. »
Ethan SmithCEO of Graphite, a specialist growth agency, echoed the idea of value and investment.
“I think it’s always better to price work based on the value created (aka ‘value-based pricing’). This is especially true for consulting.
For SEO consultants, we should ask ourselves if we are creating more, less or the same value as before. With many businesses shifting their resources from paid marketing to organic growth, SEO is arguably more valuable today than it ever has been.
Also, the market would rather suggest an increase in resources for SEO, not a decrease. »
However, I found an outlier that recommended refreshing (with a catch), when I spoke with Will Erlandsonvice president of strategy for Adogy, a public relations firm that works with small businesses all the way up to Fortune 100 companies.
Adogy also does value-based consulting – it’s just that their value is in building relationships first and profits later. He said:
“We approach pricing and discounts as a way to connect and help our customers.
We pride ourselves on lowering prices whenever a customer is going through a tough time. This pandemic is no different and we are adjusting our prices to build long-term goodwill with our customers.
This allows them to spend more of their budget on their employees and customers, which overall helps make the world a better place. »
The theme taken up by these four agencies is that of value, and prices should only be adjusted when the value changes.
What if things changed?
To be clear, if the realities of the economy indicate that an agency or consultant’s prices are currently outside the range of what they should be, prices should be adjusted.
The new price should be presented as the current rate and not as a discount, such as a 25% price reduction for a limited time.
This could be perceived as a drop in the value of the offer.
In addition to reducing the perception of value, an advertised discount opens the door to negotiating additional discounts.
This could then put the agency or consultant in a price war with one of their competitors who may be offering even lower prices.
Going down this path could cause significant problems for the sustainability of the agency or consultant’s practice that could take a long time to dissipate.
Discounting as a way to give back
One of the silver linings of the current global pandemic is how people around the world are coming together to support each other.
Agencies or consultants who want to do their part to support businesses that have been harmed by COVID-19 might be tempted to cut their services.
This is admirable and should not be avoided by those in a position to do so.
When offering this discount, it is again important not to diminish the value offered or open the door to a price war.
One way to avoid this is to include a disclaimer in a pitch that there are discounts available for those who qualify.
This condition would align the price of services with a standard tariff but only allow a price reduction for those who truly deserve a lower price.
Ideally, this could weed out customers who are simply looking for the cheapest deal rather than those looking for the best value.
Qualification criteria can be set as loose or as strict as necessary, it is just important that there is a threshold that must be met.
A clear advantage of this approach is that when the pandemic ends there is no need to revert to higher prices with a staggered approach.
Essentially, the pricing itself never changed, but rather there was a specific scenario that could have entitled a set of customers to a different pricing that thankfully is no longer needed.
Should You Cut SEO Services During This Pandemic?
It really depends.
But it should always be value-based.
If you have determined that something has changed upwards or downwards in the calculation of value, the price must be adjusted.
For those looking to offer their services for free or at a discount to support those in need, Lily Ray has set up a matchmaking service connect consultants with companies.
If you have extra bandwidth, this is a great way to give back.
Finally, for companies that understand that now is the best time to invest in digital marketing, now is the time to hire that consultant or agency you did that engagement dance with.
Or even better, go ahead and hire a full-time employee.
It may be a time of unprecedented uncertainty, but it is also a time when we will look back and realize that there were extraordinary opportunities to move forward.