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An SEO proposal is a crucial tool for growing agencies to showcase their suitability for potential clients and secure new business. It serves as a sales pitch, outlining what the agency can offer and why clients should choose them. With many prospective clients considering multiple agencies, a well-crafted proposal can help an agency stand out by setting clear expectations about deliverables and timelines. The video features insights from leading agencies and promises a free template for creating an effective SEO proposal. It emphasizes the importance of clearly communicating capabilities to gain client trust and engagement.