Help needed: Structuring an Auction for a High-Ticket SEO Agency (High COGS challenge)
Hey everyone, Iām working with a new partner and need some brains on how to structure the backend offer. The Business: - Niche: High-end "AI SEO" / AEO (Answer Engine Optimization). They rank businesses on ChatGPT, Gemini, and Googleās AI search. - Price Point: Monthly retainers ranging from $2k to $40k/mo. - Economics: Margins are approx 40%. (e.g., A $2k retainer costs them ~$1,200 to fulfill due to manual outreach, link building, and content costs). - Current Assets: 10 years in business, huge organic inbound traffic, but zero email list/CRM (they never built one). - Distribution Strategy: We plan to partner with an E-com/Growth community owner since the client has no distribution of their own. The Problem (The "Consolation Prize"): The auction model relies on giving a "gift/credit" to all non-winners to bridge them into a mid-ticket backend offer. - Because this is a service agency with high fulfillment costs, we canāt just give a massive credit toward a service that costs us money to deliver. - The client does not have a digital course or low-COGS info product ready to use as a backend offer. The Proposed Workaround (Is this viable?): We are thinking of creating a "Lite" backend offer specifically for the auction runners-up: - The Offer: A "Foundational Organic SEO" package (Traditional SEO, not the high-end AI stuff). - Price: Sell for Ā£1,000 (approx $1,250). - Cost: The client has a secondary team that can fulfill this for Ā£500. - The Math: We give runners-up a Ā£500 credit ā They pay Ā£1,000 ā Cost is Ā£500 ā Profit is Ā£500. My Questions for the Group: 1. Has anyone run an auction for a Done-For-You agency where margins are tight? 2. Is a Ā£500 margin on the backend "consolation" offer enough to justify the effort of the auction? 3. Should we force the client to build a pure info-product (e.g., "DIY AI Audit") to maximize cash flow, or stick to the service offer since thatās their strength? Any feedback on how youād structure this stack would be appreciated!