What is the lifetime value of a customer in Local SEO?


John Vuong

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I have always wondered how long Local SEO customers stay with an agency if they are doing ongoing work for them.

And, which type of client have you found to be the stickiest for your agency? Referral (from existing client), New lead (found you online/event), Disgruntled (not happy with existing agency), Cold (prospected via sales/advertisement)?
 

Phil Rozek

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@John Vuong, depends on a ton of factors, including many particulars of the clients themselves, but the "lifetime value" of a local SEO client can be huge.

If you do a great job, always prioritize your good longtime clients over new may-become-good-someday clients (i.e. don't treat everyone exactly the same), and don't yoke them with a contract, it will work out well for all involved.

As you work with someone for longer, usually the benefits multiply over time, rather than taper off. Those people often refer friends, ask "What else can you do?", write reviews/testimonials, and in many cases are OK with trying out new experiments/ideas. My oldest client has been with me for 8 1/2 years, and the bulk of them have been with me for a couple of years and counting. In general, I've found that if they've been with you for 1 year, they will probably be on-board for much longer. It's well past the "7-month itch."

As for which type of lead/client is "stickiest": new, online leads. By a mile. They have the best understanding of what I do, and what makes it different. Referrals are good, IF they've read at least a few of my posts and gotten my email newsletter for a while. The inherent issue is that that person has chosen only to go on what his/her friend (usually a current or past client) says, so it feels like a leap of faith. That's why you need a newsletter or some other way for word-of-mouth referrals to "get to know you." Even if the referrer is a great client or a friend, you don't just want to take on the referred person blindly.
 

JoshuaMackens

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I have always wondered how long Local SEO customers stay with an agency if they are doing ongoing work for them.
Great question.

The easy (and most accurate) answer is, "However long you continue to do good work for them." There's really no reason for anyone to leave if leads are coming in consistently at a price that works for them.

I've only lost customers when a) they were phased out of my pricing as I grew or b) the few times the SEO wasn't working for whatever reason (which sometimes happens). I've had clients with me since the beginning. I've also had a few drop off too quickly before the SEO started to kick in. I've also had a few leave because they were in hyper competitive markets and I couldn't get them where they needed to be after the 1st year and they wanted to try something else (almost all of them ended up ranking on the 1st page a few months after leaving, typically at the top, sucks :/ ).

Lifetime value for me, at this point, is minimum $100,000. I'm more confident in my abilities than ever before but when I was less confident, it could have been around the $20,000 mark. It just depends on your agency (margin) and how long you've been able to keep clients in the past plus your improvement rate.

As I alluded to earlier, I've got clients that have been with me since the beginning (close to 6-7 years now) and some that I just brought on, but expect them to stay the same amount of time.

Hope that helps.

And, which type of client have you found to be the stickiest for your agency? Referral (from existing client), New lead (found you online/event), Disgruntled (not happy with existing agency), Cold (prospected via sales/advertisement)?
I agree with Phil that someone who is familiar with you, has read your stuff, and is a fan is going to stick longer. That's 100% true.

I also think that they will stick around, no matter what, if you're doing good work. Are they seeing business from SEO? If so, they will stick. Really, client retention in SEO (and honestly, in most things) comes down to your product. Does your product work?
 

John Vuong

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Thanks for responding Phil and Joshua. I totally agree that customers who see true ROI will stay with an SEO consultant/agency for the lifetime/course of business life.

I've had a few instances that companies would hop from one agency to another without giving much time for them to do what is required even after properly screening them. I find that some clients are never going to be satisfied or they think they know more than the agency/consultant they hired.

I've also had a few instances that family members got in the way where their children just finished schooling and they believed what our agency was doing can be replaced by their children. Some things you can control and others you can't.
 

JoshuaMackens

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I've had a few instances that companies would hop from one agency to another without giving much time for them to do what is required even after properly screening them. I find that some clients are never going to be satisfied or they think they know more than the agency/consultant they hired.
That is definitely true. Sometimes no matter what you do, people just won't be happy. You're not alone there.

I've also had a few instances that family members got in the way where their children just finished schooling and they believed what our agency was doing can be replaced by their children. Some things you can control and others you can't.
That's crazy but I can't say I'm surprised.

Sounds like you have a good handle on things!
 
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While we’ve never had a client tell us that we aren’t doing what’s expected of a local SEO campaign, we have lost clients for a number of different reasons. However, the biggest reason seems to be rather than wanting to continue with a third party local SEO company, many of our clients begin to invest in their own marketing departments. Rather than seeing this as a negative, we see this as helping a company grow to the extent of being able to fund their own marketing sector.
 

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