Adam,

Absolutely. This post is dead on. Value is everything.

And unlike the plumber story, you have to begin to understand that most people have no idea how long a job actually takes. I am not suggesting you deceive them. Instead, I am suggesting you never bring up the idea of time in the first place. When you sell SEO, especially the way you are pitching it, you are selling a package - a PRODUCT. So, rather than thinking about how much it costs to "make" your product (meaning how long it takes you to complete), instead think about how much it's worth to the customer.

The worst mistake any business can make is using profit margin formulas to figure out pricing. (ie. If my widget costs $10 to makes and I want to make 20 points, I need to charge $12). The reason this is wrong is because the pricing has absolutely no correlation to the actual value/demand of the product. So, you can be pricing the product way too high or too low.
Instead, you need to first ask how much it's worth to your target customer. If it's worth $8, then you better think up another widget. If it's worth $50, then great, you're going to make $40 on every sale.

Case study: iPod. How many cheaper MP3 players are out there? And guess what - they probably cost more to make, considering Apple has economies of scale to work with. So how does Apple get away with charging more AND still being the leader? Because it's about consumer perception of the end product, not the work/cost that goes into it. Most people like the iPod the best for a variety of different reasons, and when they look at the price tag, they aren't asking how many labor hours and hardware costs went into making it, they're asking if they would enjoy using it enough to justify spending ~ $350. And the answer is usually yes.

This list can go on and on and on... Point is... Every entrepreneur has to understand that value to the customer is not how many hours something takes to complete, but instead how much they will benefit from the work you are doing within those hours.
Anthony | 12.06.06 - 11:47 pm | #

Here Here. I am working to solve this same problem with my own company. If anyone has any tips on how to do this in my industry please let me know.

Anthony, Your dead on. Your parents must be proud.
Aaron | Homepage | 12.07.06 - 1:37 am | #

As usual, thanks for the comments. Anthony - your insight is always amazing. Dude, I think I'm going to do a "best of Anthony's comments" blog post sometime
Adam | Homepage | 12.10.06 - 4:48 pm | #