David Hood


Source: SEOSignalsLab

Pick His Brain!

I’d like to introduce one of our members, David Hood, for our next ‘Pick His Brain’ session and I want to thank him for the participation.

David has been running an SEO agency since 2012 and has been helping others since 2014.

His equity partner recently sold an agency for 2 million dollars and knows all about what it takes to build, scale, and sell.

If you have any questions related to niche SEO agency building growth, please feel free to pick his brain.

Here are the rules.

1) I’ll let the thread go on until he asks me to stop. Theoretically, this thread can continue until the FaceBook stock value goes to zero.

2) Please, no snarky remarks. I will not tolerate any intentional negativity. We are here to learn from each other’s successes and strategies.

3) Please do not PM him and bother him. If you have a private question, ask for his permission on this thread when appropriate.

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Table of Contents

What’s your go to business development method? And how you scale that?

Studying others who have been successful, Testing on my own test properties, and Brainstorming.

While documenting it all in OneNote so I can continue to build on it over time.

How to acquire cold clients, which promotion method is best for acquiring clientelle, Which local clientelle have the largest budgets?

Lots of different methods to go about doing this.

I’ve been successful attracting them by ranking my website for SEO related terms like “Dallas SEO”

Picking up the phone and dialing for dollars is a great way as well or even better, building a sales team to do it for you.

Tons of local niches with big budgets.

Think about what companies are spending money on marketing already, what businesses have a high value per sale.

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When do you recomend to start hiring va’s or full or part time help?

When your process documentation (SOP’s are a subcategory of process documentation IMO) & profits are ready.

VA’s can be hired pretty soon because they can come cheap, but definitely focus on building your systems/process documentation/SOP’s as thoroughly as possible.

It will make it easier, faster, and less expensive to find a good one.

For your agency, do you specialize on some niches? What is the best way to get leads and to scale per your experience?

Love these questions…

In the past, no, I made most of my money with my Dallas SEO Geek brand getting business (some outside of Dallas) to find me ranking and contact me.

This year, I’ve started 2 Niche SEO Agencies that I’m much more excited to build.

I did this because my agency as it was was not sellable…yeah, it has made me a great living, but I couldn’t ever exit it…and there’s a ceiling at about $40k/m-$50k/m.

Best way to scale, IMO, is with a call center while focusing on 1 niche and 1 service.

Getting leads…hmm…not sure what the best way is…if you setup the sales system well.

Then you can churn through leads super rapidly…just about any lead harvesting system that allows you to focus on a single niche will do.

For sale systems, beside organic, do you use cold calls or email lists?

Yes cold calls, testing email starting in Q1 2020.

To elaborate, I like local niches and not national niches because I’ve worked very hard to develop my Maps SEO processes.

I’ve got a couple hundred lead gen GMB’s that I’ve been testing a wide range of techniques on in 2019.

What are your favorite local SEO gigs / services / strategies?

Outreach Link Building Services by Cascade Links owned by Gary Wilson & Michael Landau-Spiers (no affiliation).

I like their process most of all the outreach services.

Don’t use many other gigs…mostly train what I would call my own “Gig SEO Technicians” to get tasks from my “Lead SEO Technicians”

Do you have VA’s handling all of your main tasks like citations, on page, etc?

Yeah, I don’t do much of the detailed work for my clients these days.

I do the planning and organization and overseeing…

I would define them more as “SEO Technicians” than VA’s

How has the podcast been beneficial or additive to your other business lines? Also, was your decision to do a 2-host partnership strategic or more practical, related to schedule demands etc.?

The Cubicle Liberation podcast is more of a long term play for my info biz…

Helps get customers and affiliates for my info products.

But, it is very much a slow burn type of thing.

Also, it is fun and I’ve learned some stuff and figured out some stuff by working closely with Joshua Fletcher.

Hmm…it started off as “I want to do a podcast”

Then, “who do I want to have on my podcast?”

Fletch was 1st come to mind…

He seemed so excited, I thought we could create something great together…and here we are a year later!

Is there any specific B2B SEO strategy for global software products / solutions.

Hmm…can’t say I have experience with that niche specifically…

Maybe 1 client from a long time ago and it went, simple, keyword research –> On Page –> Off Page…

Nothing unique that I could tell, but I won’t claim to be an expert on this topic.

What’s the process to sell an SEO agency?

Primary plan:

Contact the people at the top of bigger agencies and tell them what you have to offer.

This is much easier than you would think.

A lot of them have shit for SEO processes.

A lot of them have shit for Sales processes.

A lot of them have a high revenue (with low profit margin) and so they can raise money for a big pay day for you.

When doing cold outreach, what are some things you might typically say to get past the person who answers the phone?

Treat the gate keeper like a decision maker.

Ask them for help.

Ask them if they’re “open to discussing…”

If you were to front load some SEO tasks owing to a requirement to rank faster than your normal pace, which ones would you front load?

I know this is not the answer you want to hear, but…

I would not let a client put me in the position of trying to “rank super fast” and therefore, do things out of order and/or inefficiently.

While it is possible to rank quickly, there are many weird things that can happen.

1) whats your view on cold emailing to get SEO clients? 2) when you started your agency, how were you generating leads? 3) How much should you charge as a beginner in SEO? 4) what’s your view on SEO for car dealerships? Is it best for generating leads?

1) I haven’t thoroughly tested this, so I have no opinion on it.

It is on my agenda to start testing in Q1 2020

2) When I got started?

Networking and direct mail.

What did I do that really made me a lot of money earliest in my business?

Ranking for “Dallas SEO” related searches.

What do I think works the best for building and scaling an agency as fast as possible?

Cold calling team and system.

3) So hard to say…so many factors.

I suggest offering 3 pricing options to customers to see where their budget lies.

4) I’ve never worked with car dealerships, but I know they spend a lot of $$ on SEO.

My business partner, Mical Johnson has done SEO for dealerships.

You mentioned opening 2 new niche focused agencies and focusing on one singular service. What is the singular service you will be focusing on for those?

SEO all the way baby!

I’ve studied the different forms of digital marketing services and SEO is the most profitable for the agency and for the customer when it works.

It is also something that, when it comes to local niches, can be done at a very low cost to you…again, very profitable.

For fulfillment, is it better to in house or outsource?

“Fulfillment, is it better to in house or outsource?”

Not sure where you draw the boundaries for these 2…

I’ve got several long term contractors that have worked for me for years and I consider that to be in house even though they are not technically full time employees of my company.

There’s no one good answer for this question.

Eventually you’ll need some in house, full time employees to be able to sell your company…

But, early on contractors are great for low risk team building.

Any tips to increase client retentions?

Increase client retention by…

– monthly reporting

-preparing their expectations before the deal closes

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-trying to provide excellent results

-always do what you say you’re going to do, no matter how small

-putting client on credit card auto pay

What are healthy profit margins to have for an agency?

Net profit margin 50%+ is what I shoot for.

Gross profit margin @ 70%+ average.

More broad agencies get much lower margins.

I talked to an all (niche) and all (digital marketing services) agency owner and he only got 15% profit margins on SEO projects…INSANE

His agency had been growing for about 8-10 years and he had a huge team, so…

In your opinion, can a one-man operation, beat or compete with a local digital marketing agency that has 30 to 50 staff members? And how would you recommend doing so, if it’s possible? Would the answer be hiring a few local people myself and/or outsource? As we all know to hire locally can be risking and expensive. Employees can be very destructive and you have to pay unemployment insurance on them where I live and pay health benefits to be a good employer.

“Can a one-man operation, beat or compete with a local digital marketing agency that has 30 to 50 staff members?”

Yes, most certainly!

I’ve been doing it for many years now.

Narrow your focus. Don’t try to be all things to all people.

Position yourself properly.

Stay streamlined.

It is good to build a team, but you can go a long way with contractors before needing to hire a full time local person.

How do you evaluate the worth of an SEO agency? Same as selling a project with revenue factor 20?

OMG, such an excellent question that isn’t as simple as your instincts would tell you.

Its not just about your revenue or even your profits…

Your systems, customers, processes, profit margin, documentation, branding, etc all come into play.

A lot of agencies sell for very low multiples and there’s a horrible earn-out to get the full sale price…

But, when you structure your agency well, you can get close to your 20 x profits number.

My recommendation for this is to go against your instincts to be all things to all people and narrow your focus to service 1 niche with 1 service (SEO).

This dramatically reduces your costs and the hidden costs with servicing a much wider range of situations…

Therefore, you can scale much faster and still remain profitable.

So much more I could talk about this…

When you say 20x profits are you talking about 20x annual ebitda? That seems extremely high?

Yes, I meant to say 20x because your profit margin is higher and you are able to grow revenues faster…

But yeah, it’s obviously a rough estimate…

Yet the multiple grows as time goes on running with a good biz structure.

2-3 years down the line it could be much higher than 20x what you would have made with a less streamlined biz model…

Let me elaborate. When I say “20x,” I think a better way of putting it is “exponential” or “order(s) of magnitude”

The delta is not constant and actually may look worse for my model in the 1st 3-6 months.

Which is better?

$10k a month for 5 years with not much growth potential and spinning your wheels (this happens to a lot of people)


Building a company that you can sell for $5 mil and, even if you don’t sell, pulls ~$1 mil/yr in net profit with you not having to deal directly with selling or servicing clients.

What’s the multiple in difference between these 2?

So, as you know, the multiple depends on a lot of factors…

The way I am structuring my agencies now, I believe the multiple will be at least 5x EBITDA and as high as 10x-15x.

I believe we will be able to get this because we will have a high profit margin, a ton of documentation, heavily worked on business systems, and branding separate from me personally.

1. What revenue range is a good target for being acquired? 2. How do you find a buyer when you reach that target?

1) Less about revenue and more about profit and systems and documentation and agency structure.

I think once you are making $1 mil/yr off the top in profit, you can easily sell.

2) Making your business selllable is the hard part by far.

Selling is easy…if your agency is sellable and lots of agencies are either worth very little or not sellable at all…

Because it is structured poorly.

There are tons of bigger agencies that grow via acquisition…

When you structure your business properly, you’re a juicy target for them!

Do you have a mapped out ideal structure for an agency that we could peek at?

Most definitely…

There is 1 big, hard to make decision (item 1 below), and 2 major focuses (items 2 & 3)

1) Narrow focus to 1 niche and 1 service.

For example, Plumber (niche) SEO (service).

Your instincts likely tell you that you’ve giving up money in order to do this…

While that may be true if you look at specific situations in a vacuum, the reality is that your brain is horrible at accounting for the hidden costs of taking on “bad revenue”…

Opportunity cost is a hidden cost.

So are the extra connective tissue system costs of servicing multiple niches and/or providing multiple services.

When an agency narrows its focus, it becomes MUCH more profitable…

And therefore, the agency is able to scale faster and become sellable much faster.

2) Create a functioning outbound sales system that, eventually, doesn’t require you to work in it (see item 3).

This is much easier when you follow (1)

Cold calling, ads, cold email, direct mail…all of these can work.

And you can mix them together.

3) Aggressively build your business documentation and train your team to do this as well.

I call this “process documentation” or “proc doc” in my business.

Proc doc includes, SOP’s, brainstorming, call notes, actions in the past, present, and future, etc…

The proc doc for both the sales and the service side should be a HUGE focus for everyone in your business.

Over time, this becomes a super valuable part of your business.

If you’re still with reading, I suspect Steven won’t mind if I give out my free 7 Figure SEO Agency Exit Roadmap because it goes into a lot more detail on a few of the points given above:

Yes, it is an email optin with a 6 part auto responder series and I am in the middle of a promo right now until next Thu…

But, if you don’t like my emails, you can always grab the PDF and then unsubscribe…

If you do like my emails, then, by all means, stay!

1. What are a couple maps SEO tactics that most SEOs miss? 2. Did Epstein kill himself? 3. What are some ways you’ve found to maximize profits in SEO? I’m constantly surprised at how much money is coming in and how little is left?

1) Tons of stuff you can do with On Page to help maps listing rank better…

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Basically, almost unlimited possibilities here for…making your GMB more relevant to a wider geographical area.

2) I think it is very likely.

Surprised Jared didn’t do the same.

3) In my previous response to you, items 1 & 3 are crucial.

How are you building site authority for your lead gen sites etc? PBNs?

Guest posts, pbn’s, directories

What is you On-page and Off-page SEO Strategies?

On Page: Focus on domain, title, URL, H1-H3, & do a lot of maps stuff if relevant

Off Page: Mostly guest posting, some PBN’s

What’s the best way for a business owner to brief a SEO agency/individual to achieve business goals? Eg. “Your job is to double site traffic every quarter”, and leave them to it. Not sure What’s the best way since the business owner isn’t a SEO expert, so giving them specific instructions eg. “I want you to do keyword research and brief content freelancers” might not be the best.

I can’t speak for every agency-client relationship…

For my clients, it would be to listen to what me and my team tell you should be the goals before you hire us…

Then, once you hire us, since you’ve decided to pay us, generally try to follow along with the goals we’re laying out.

I would guide you through all the information I would need from you and you, generally, don’t need to interject at all.

If you’re telling them what to do specifically within the project, then who’s the expert?

How would you assess what the goals should be? Is it based on business needs, current metrics, or something else?

The purpose of hiring someone to do your SEO for you is to give your business more opportunities to sell to your target market in such a way that turns your website into a growing, long term, valuable asset to your business.

If your SEO company has grown your opportunities to sell to your target market (via organic traffic), then they are generally doing their job.

What is your process for building effective citations?

Train my Gig SEO Technicians on how to look for sites with relevance and decent metrics…

Train them to document their research, so for each client in the same niche, this work isn’t starting from scratch.

How much % of the time you spend on answerering stupid questions from clients? The annoying ones like when is it finished? When you already told them next week.

Less than 1%. By the end of 2020, I think I can have it at 0%.

Lay the right groundwork and have good messaging and this is reduced.

Also, I’m going to pull myself out of the Project Manager role.

What’s a mindset shift one goes thru when transitioning from 5/6 figures to the 7 figure mark?

Hmm…hard to say..depends on what your issues are…

I’ll think on this:

Abundance over scarcity mindset.

Growth over fixed mindset.

Building over grabbing mindset.

Building my skills, understandings, and assets.

Grabbing is what push button millions or bank robbing would be.

If you are going niche specific, is there a reason you are doing seo vs. rank and rent in one vertical? Do you think seo with contract is more valuable in a transaction?

Well, I’ve earned about $1.67 million with client SEO and $0 with rank and rent…so there you go.

Client SEO has worked better for me than rank and rent…but I haven’t really tried rank and rent…so I can’t say I can speak from anything but guestimates as to whether it scales well.

I have made $124k on lead gen over the last 2-ish years.

How to effectively use PBN?

There could be a whole course on this…hard to answer in a single message….

I’ve been gradually reducing my PBN usage and I see using them less and less in 2020.

Therefore, if you don’t already know how to do this, then perhaps its better to pickup a different SEO skillset.

Other than word of mouth/referrals and paid ads what’s your primary lead gen strategy?

In the past, ranking my website for “SEO” consultant related terms (inbound).

Now and in the future, cold outreach systems via an outbound sales team team (outbound)…

Really inbound + Outbound

1. What (if any) books would you recommend regarding scaling and (more importantly) selling a business. 2. Any other resources you’d recommend including your own (hopefully that doesn’t break the pick his brain rules). 3. Dogs or cats?

1) Built to Sell book is excellent.

2) My Operation SEO Agency Empire program (that Steven recommended yesterday) is excellent and I’m TOTALLY not biased.

Hmm…I like Sales Machine by Eric Brief and Michael Tesalona.

OMG Machines stuff (Michael Long, David Mills, Greg Morrisson, Dan Anton, Stephen Floyd, Joshua Fletcher) — Fusion & Traffic Tsunami…

3) I like both. Pros and cons to each! I had dogs as a kid and now have 2 cats.

In your course sales, how much is the sales volume?

In 2019 I had just a smidge over $100k in info product sales. I expect to beat that significantly this year.

Do you sell and use teachable or some other online platform or you give them a download link?

Kajabi for content delivery…

Sales & optin pages: Thrive Themes

Email: ConvertKit

Shopping Cart: SamCart

Were your sales mostly from your own list, affiliate program or your own advertising? If you could give percentage of each would give great insight.

Hmm…hard to give exact percentages because sometimes people see you in different places at different times and buy with the 2nd or 3rd place.

Which one caused the sale? Maybe no sale without the others…

Some were from previous personal connections and being part of an SEO group for many years adding value in that group…

Some were from paid marketing (probably smallest area)

Some were from organic social (my own FB group I built from scratch starting in Nov 2018)…

Some from SEO & YT…

Does building a site over the shoulder only comes with the OTO or OSAE has as well?

So the over the shoulder niche SEO agency site is only with the FTW (Fly on the Wall) Upgrade.

That said, in the core course, I talk about everything I did to rank and monetize my Dallas SEO Geek brand and all the SEO techniques I use for the over the shoulder series.



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