Performance Based Pay for SEO
22nd October 2006
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I’ve been hearing more and more about Pay-for-Performance for SEO Consultants. Although, many an SEO Consultant I’ve spoken with, have a problem with the performance based compensation model. The reason is because the client is asking the SEO to take the all risks. Especially for a new website to rank well in a competitive vertical. That can take a lot of time & investment. So, the idea is…why not challenge an SEO Consultant, and not assume any risk/investmest yourself? 1) No upfront or monthly payments. Pay per lead, per sale or % from profit. 2) Small monthly fee. And, Pay per lead, per sale or % from profit. 3) SEO Consultant charges a one-time minimal fee for the initial SEO Optimization then only gets paid when the Top 5 positions are achieved. In this model, the SEO Consultant gets paid when the Keyword(s) rank in the SERP’s in a specific position. For example: Pay an initial ( one-time) fee of $1000. Then, pay the SEO Consultant on Search Engine Rankings for specific keywords. There can be a list of many keywords, and the cumulative pay, might be more than expected. A real win-win situation for both parties. To allieviate the unbalanced risk that the SEO Consultant takes, he can charge a low monthly fee in addition to the performance incentive. Of course these are just examples, and the actual amounts will vary per SEO Consultant. Postscript: Related posts: |
October 22nd, 2006 at
For an e-commerce site you could also do try a percentage of revenue model. I would also suggest a minium payment in this scenario as well
October 23rd, 2006 at
I think it depends on the client.
For example, today I went to a sales call for a small brick and mortar women’s fashion boutique. A mom and pop, with a small e-commerce store. I walked in with the option of taking a % of sales or a flat rate hourly model.
I decided to go with a flat rate hourly model for SEO and SEM training. I can’t forsee this driving the numbers to covermy expenses - on a pay per performance basis. Even if the online business doubles this year, it still wont generate enough for a pay per performance rev model.
October 23rd, 2006 at
I’ve always wondered if the various seo companies could actually deliver on some of the claims they make. Perhaps, a pay-per-performance model will finally give some of them a chance to prove it.
Only then can we, as their potential clients,make a decent decision on whether to go that route or not.
October 24th, 2006 at
[...] Shimon Sandler wrote about a performance based pay for SEOs instead of a standard monthly fee and other fees out there. Take a look at the #3. It suggests that SEOs should charge a small (barely surviving) fee and rely on how well they perform. Based on the ranking reached … monthly SEO fee will increase. [...]
November 28th, 2006 at
As a customer I would prefer model #1. My SEO budget is very low but I am prepared to share 30% of the sales income. But I must say that I didnt had any luck finding SEO to do pay per performance.
Please contact me if you know a company to work like that.
January 15th, 2007 at
Hey Shimon,
Have you used a PFP SEO business model?
I would love give an example.
I’m having trouble measuring my client’s leads, traffic, and sales.
Warmly,
JP
March 26th, 2007 at
My best clients are ones that I work on a performance basis. I have only done this with two clients, though… and both had two common traits:
1) Both we’re currently using PPC to drive traffic, and we’re having SUCCESS
2) Both we’re referred to me from a close website designer friend of mine.
Otherwise I wouldn’t do it.
But the setup is perfect.
For example… one client was spending an average of 55 cents per click. Rather than charging a flat rate, or monthly rate, I madethsi offer:
I take all of the risk… IF I deliver no results - you pay me nothing. If i did deliver, I recieved 45 cents per click.
There are sever pro’s to this for bot hparties. For the client:
- he gets marketing on a performance model - something that is extremely rare.
- he already knows that added traffic equals more revenue and profits.
- he’s getting it cheaper than he already pays for it
- the benefits of Organic traffic over PPC traffic.
For me, it was an obvious one - If I deliver, I’ve built a residual source of income from my labors. Which always makes sense. It was actually part of my presentation. Why should he continue to get the benefits of the ranking/traffic, and I only get paid a one time fee?
This has worked very well for me over the past 3 years. With one client, we’ve just recently switched to a per lead/percentage of gross (whichever is higher). Since I know I can drastically increase the conversion rates of his visitors into actions… this was a logical way to increase my revenue with him - while maintaining the performance basis of our relationship.
Of course… there is a lot of trackability and trust that is needed to make it work. I wouldn’t offer it to Joe Blow who was referred to me from somewhere else…. but for the right client it can be a beautiful setup.
Hope this helps!
Damion