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Building a $60,000/month SEO Service

1. Hello! Who are you and what is your business?

My name is Adam Bate and my business is called SEO Brothers. I grew up in rural Nova Scotia, Canada and currently live in Halifax, Nova Scotia with my wife and four children. Previously, I had run a local hosting and web design business about a decade and a half ago and that’s where I really got into SEO – ranking in the Canadian market for terms like web hosting and Canadian web hosting and offering services to our clients. Back then, things were a little more of a free-for-all in the SEO space but it was still a gateway into it. Entrepreneurship was always my path, I just knew I had to find a different approach.

After selling that I got into the health and wellness space a bit in affiliate marketing before spending 3 years at a growing digital agency managing their SEO department. During this time, my brother graduated from University with a Finance degree and I somehow managed to convince him that SEO was the industry he needed to explore and I helped him start a business while continuing to work full-time. It wasn’t long before we spotted a lot of gaps and inefficiencies in this business and how people were packaging and offering SEO – which is ultimately where SEO Brothers got its start.

SEO Brothers has been through its own fair share of evolutions since starting. We got our start by fortunately landing a partnership with a local digital agency that were interested in outsourcing SEO – and we just happened to rank well for local terms. Little did we know that the conversations and work with that partner over the next year or two would slowly create the backbone of our business. We had no intention of only being a white-label provider at this time, we were just happy to have a consistent source of business with a great local partner.

As I mentioned, we’ve evolved. We know productizing our service was what was going to allow us to scale. But it wasn’t a straight line by any means. Once we decided to position ourselves exclusively as a white-label solution, we played with a couple different models. We had a flat-rate low-end SEO support model that was very similar to the Design Pickle of SEO. This was a great service and it was perfect for some partners but not nearly enough for most. Where we landed was based on a ton of feedback from partners and an evolution into really helping our partners grow.

SEO Brothers helps freelancers, web, and digital agencies, start, grow, and scale their organic search offering. We do this by providing the processes and people to help them leverage our processed and productized approach to SEO so they can package and sell solutions on day one. We have 5 pricing tiers currently ranging from $375 per month to $2400 per month and include support for ad-hoc SEO requests such as audits and keyword research to full project support for SEO for web design projects or strategic ongoing campaigns. The only difference in pricing tiers is the number of active projects we work on – ranging from 1 to 12.

In terms of numbers, this is our second full year of full-time focus from both my brother and I and despite a massive pivot this year, we’ve grown 100% in 2019. We’re currently sitting at roughly $60k MRR with ourselves and a remote team of 14 staff who are based all over the world from US and Canada to Eastern Europe and the Philippines. Our margins are pretty good, currently floating around 30% profit margin.

2. How do you attract and retain your customers?

The first partner landed on our lap due to being in the right spot at the right time. From this, once we knew we had a good offering in the white-label market, we grew initially with cold email outreach. This is what acquired partners 2 through 20 I would say.

In 2019 we added infrequent content marketing and podcast and conference sponsorships. These were more experiments to see what works and what has decent ROI. Both efforts were sporadic but both provided positive ROI and good customer acquisition and we will definitely continue and fine tune these processes into 2020.

In 2020 we’d love to get deeper into content marketing – building upon our original video series by adding a podcast aimed at helping agencies in some way, getting more into long-form content, and exploring what paid client acquisition might look like in paid search or social.

We have had pretty good customer retention passed the initial 30 days – where many partners are just kicking the tires to see if we’re a good fit. So our big focus will make sure we have better messaging and pre-sale education so that only better fit partners are making the decision to buy. We know we’re not the best fit for everyone but ideally we’re a great fit for more partners that originally signup. It doesn’t help that we’ve pivoted and referral sources are thinking we might do something differently than we do now.

Big lesson on customer retention is just to personalize your service. Productizing your service is a great way to grow and scale and remove yourself from the business, but don’t try to productize your customer service too much – if you want to build longer term relationships you’re going to need a personal or human element. For us, that means that every new partner gets forced into a weekly status call with their dedicated project coordinator within the first 8 weeks of service. On these calls we review current work in progress, deliverables, or just chat and get to know their business and what’s in the pipeline.

3. What were your challenges and obstacles of growing your business?

We have definitely pivoted more than most businesses. I have a bit of Entrepreneurship ADHD so I like to chase shiny objects but it was more than just that – it was listening to our customers and trying to come up with better service and pricing models that made sense. I don’t regret it at all even though it may have slowed growth and perhaps confused some existing clients -because the product-market fit we have now is so much better than our versions before and we are 100% committed and focused on our model as a result of this.

We’re still trying to fine-tune some of our processes (we use Trainual) around production and service which I would say is a big challenge balancing this with growth and hiring new staff. I think hiring and HR is always going to be a challenge until we really nail our employee on-boarding and training much better – which is an active priority and one we are doing very well at solving.

One of our biggest mistakes was probably paying ourselves (my brother and I) too much in the beginning before we had a team in place. It’s tough because I’m not sure I would change anything if I had to do it over again but I know for a fact it delayed our growth significantly because of it. We’ve gotten much better a moving to more of a profit-first model where we just have better understanding and knowledge of our margins and operating budgets so we know how much time / resource each subscription is allowed to receive based on their tier.

4. What has been helpful to help you to grow your business?

There were definitely some things beyond our control like landing that first partner – which to be honest, was a result of ranking well in a local market so I shouldn’t say we didn’t do anything for it – but without that first relationship I’m not sure SEO Brothers would exist and if it did it would either look differently or be a year or two behind where it is now. Losing a large Direct to business client in the beginning also forced our hand to really double down on the white-label and productized models so that was a blessing in disguise.

In terms of growth, not being afraid to send an email or pick up a phone has been a big one. We have used a lot of different tools for things like cold email outreach, project management, internal and external communication so I wouldn’t necessarily one tool made or broke us, but there are some amazing software solutions out there to help you collapse time and make your life easier.

The biggest thing for us in growing was in our pivoting – we aren’t afraid to move quickly. We fail very fast and we adopt practices very fast. It’s not uncommon for me to spend a month of R&D that never sees the light of day because it gets axed before it has the chance – because it turned out that’s a better decision than mulling it over for the next 6 months and being stagnant. Or to spend a week on something that gets rolled out across the whole team immediately based on feedback from a handful of partners. Listening to our customers was huge for us as well. We tried to be a simple request system which completely ignored the request we got from partners over and over and over again – which was for support in packaging and selling solutions. So we pivoted.

In terms of external factors, relationships are huge for us. We sponsored a podcast and a conference this year and it was a great experience. Not only did it allow us to acquire new customers but it gave us the chance to chat with hundreds of potential partners that had questions and we just had a wealth of great insight from the community. I couldn’t recommend this enough.

On a personal level, health and fitness is a big thing. I always start the day with a good workout – it lets me show up for work and for my family. I also respect my work – I show up and do the work – and this is the mindset that we expect from our team as well. We are a very relaxed work environment and remote team – everyone can set their own hours as long as they show up for the meetings and get their work done.

5. What is your advice for those that are starting productized services?

Couple pieces of advice here:

  1. Don’t productized your custom service – especially for higher ticket items.

I’m all for automation and having an excellent client on-boarding experience, but if you want to improve your lifetime value of a client and the relationship with them, you need to add some level of human interaction that will pay itself back 10x.

  1. Pricing matters. Pay attention to the numbers.

Sometimes when I chat with people that are about to price a productized service it’s literally like they are picking a number out of the air. Most productized services are based less on value-based pricing then they are on hard numbers. I always recommend starting with what you want your profit margins to be – what do you want to take as an owner’s salary + profit and start there. You don’t need to get as deep as moving to a profit-first model like (like Mike MIchalowicz’s book) but at least have it in mind. So if you want to pay yourself + the company 50% of top line revenue you need to work some numbers to understand your pricing.

For us, we float around 30-40% which means for every subscription we know how much $$ is left for operations, tool cost, admin support, etc. and we need to make strategic decisions based on that. Sometimes it means you need to raise your price. Maybe it means you need to find a cheaper source of talent.

Regardless of whether or not you’re trying to build this to sell or just to have a great income, you need to pay attention to the numbers.

6. What are your plans for the future?

We haven’t nailed down our forecasting and revenue goals for 2020 yet (since we’re close to the new year) but we’ll likely shoot for at least a 2-3x growth in MRR in 2020 now that we are better positioned for scaling and are working through better internal training and on-boarding processes.

Outside revenue, there are a couple initiatives for the not so distant future we have on our radar. One is a better training platform for both potential partners and current partners that will allow them to be better educated on packing and selling SEO. We’re also looking specifically at an SEO for Web Designer course that we’ll likely release for free as a way to help the community provide a better foundational level of support during their web design projects.

The other big thing for us to explore within the next year is software. We have dabbled in a hacked together ticketing system to support partners when we were more request-based. That didn’t work for us as it wasn’t a core focus and our model changed. We also explored options – including ManyRequests – that are on the market but we have a pretty unique case with recurring SEO campaigns combined with one-time projects and requests that we felt it best to eventually build something for ourselves as a unique use case. Software is going to be a huge piece of our success in the next two years and is something we will invest significantly in within the next year in order to allow our partners to more easily manage projects, handle billing, request proposals for clients, etc. that we are managing via email right now and could be improved significantly.

7. Where can we learn more about you?

I love chatting productized services and service business in general. Feel free to email me at adam@seobrothers.co – I’m happy to connect. In terms of social media I’m @adambate on Twitter and Instagram – which are likely a mix of stagnant accounts and my kids. I’m a bit more active on LinkedIn here: https://www.linkedin.com/in/adambate/

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