Do you provide an initial audit service to determine whether / how SEO can help?

Let’s say you’ve got a prospective client. They reach out by email, and you decide it'd be good to know a little about the website before you get on a call and start throwing out pricing or sending a proposal.

After 15 minutes or so, you determine that the website has a target concept that is pretty difficult to break into for Page 1 in SERPs. (The keyword phrase that represents the concept best is a 40 or so difficulty in Moz, with monthly search volume between 50 and 100.) Organic clickthrough rate is not great, about 65%; a few competitors are running some ads.

Think of something like “Chicago wedding catering”. This is a bad example because its stats don't quite match what I've described, but it's a good example because it's a similar type of business, somewhat location specific, with plenty of area competitors.

That quick research tells you that the top 10 SERPS are dominated by resource sites like The Knot, blog posts, local news articles, and "10 Best Chicago wedding caterers" articles from low-to-mid-level traffic sites. There’s only one actual catering company in top 10 SERPS. A few more sneak into the next 10 results.

The prospect's physical location is in the outskirts of Chicago, so local search is also a challenge. The site only warrants 5 or so evergreen pages, though there's room for a blog, some resources, and maybe some creative tools, like a catering calculator.

It's possible that on-page optimization plus some keyword-targeted resources can help the prospect break through. However, it's just as likely that there won't be movement in the SERPS for months, not until there's a lot of link-building and content creation that's likely beyond their budget. I think the only way you'd be able to guess this is by doing a deeper dive into the keywords and link situation and identifying some hidden opportunities.

So, how do you handle this? A few options I see:

1. You price out a flat-rate audit. In the audit, you look at the site, competitors, likely keywords, and maybe the link competition. Then, you propose a strategy and give a price on that. It could be that your strategy will require a much larger budget for success, so you break it into phases -- but this could backfire because not every company will want to pay more after their initial investment.

2. You offer a price for "audit + implementation" by assuming that your strategy will just include a certain number of evergreen pages and a certain number of keyword-targeted resources to start. You set expectations that this is just the first step. Evaluate results and then plan Phase 2.

Basically, how do you avoid setting the wrong expectations for prospective clients who may need much more time, effort, and budget for effective SEO? How do you determine ahead of time whether someone will fall into that category, short of doing some level of research?