Failing to convert my first prospect in my local SEO business

It started with my wife talking to a friend of hers, who owns and operates a local massage business. In their small talks my wife mentioned my side hustle, a local SEO business start-up, which happened to be able to build websites for clients. My wife’s friend was pretty interested to find out more, as their previous website has been suspended due to not paying the hosting fee, and the previous domain name has been registered by a business in another state.

Putting in my offer

Originally I was a little hesitant to give it a try, as I have been swamped/overwhelmed in my day job recently, and I still need more time for my own website which is still in development. Later when the friend approached my wife again, asking me to build a website for their business, I changed my mind and decided to give it a try as she seemed to be quite serious.

After looking into the websites she sent me, as well as analyzing the site structure she used in her previous site, I put in my offer:

• I priced really low, all the way to about 60% of the quote they got from another person;
• I took the time and explained to them the one-time cost and the ongoing costs, with all the details in the email;
• I offered the flexibility of hosting in my plan or hosting in their own plan, whichever they prefer;
• I offered to build the site in a sub-domain for demonstration, and they can look into it before committing on hiring me. (I did not request an up-front payment so there is no risk on them!)

My offer was turned down

They went dark on my after I turned in my offer. They talked to my wife a few days later and told my wife the quote was still above their expectation. I knew the quote was a little above their expectation before I turned in the offer, and I was actually ready to negotiate and sweeten the deal a little bit by things like making a simple logo for them, included in the quoted price.

But, I am not willing to keep negotiating with people turning down the deal just by looking at the price, without getting into the details of the offering. Based on my quote, my hourly rate after tax is actually lower than my day job rate already, and I’m not going to cut down even further. I do not need a client just for the sake of getting a client. Doing that just don’t make any sense, business-wise.

They made a comment (about me) - not knowing how to do business

Yes, I’m new in my business adventure. However, as far as what I’ve learned about business, a business that competes in price ONLY is doomed to fail! Too bad that many of the small business owners compete solely in a lower price, which in return jeopardize the profitability of their business. And as a result, their business suffer due to not having enough profit to sustain the long-term growth.

One of the sites they sent me as examples, was developed and managed by a big marketing company, which ranked the site in the top spot of the targeted keyword, and the site appeared at the top spot in the snack pack. Unfortunately, my prospects just don’t see the value or potential of their website, which not only can be the online business presence, but also a sales magnet that can bring in more profit to them.

They probably hired the cheapest person to build their site before, who didn’t even tell them the basic maintenance of the site such as paying for the annual domain name and monthly hosting fee. And their site just got suspended after some time, and deserted eventually. You get what you pay for, right?

What I’ve learned from the negotiation?

Defining the target client base, in other words, defining the sub-niche within the local SEO niche.

• Businesses like the one described in this post, may be under-served in terms of local SEO /marketing, but I don’t consider them as the ideal target client, at least not yet.
• If all they care about is price, and price only, it would be too difficult for me to educate them and make them understand the value proposition of my offering, I’m not in the Business 101 education niche, right?
• With very limited time and marketing resources, it will be better if I can focus my effort on the targeted audience, which may yield a higher ROI.
• I probably need to go back to the offline market research route, research some data about local business, and create a profile for my target audience.
• Networking in the local business events and business chamber may give me some ideas.
• Maybe I can go back to the entrepreneurship class and give a short speech there, that way I can re-connect to the like-minded folks and my instructor.

Education is the key!

• Obviously, the more I educate my target audience, the easier they will be able to understand my value proposition, and the more likely they will become my clients.
• Education can create the foundation of a long-term business relationship, which in return benefits both my potential clients and my own business. I don’t want to build a website with low quality and leave the site there, just to make the quick money.
• Education should be tied into the sales funnel, whether online or offline, to sustain the future growth of my business.

If I got another chance to negotiate with my wife’s friend, would I lower the price?

• Absolutely not! This is the baseline of doing business, and I am not going to budge.

Thank you all for stopping by and reading my post. Please feel free to leave your comments and share your ideas and experiences.

Hugh