by Stoney deGeyter

Every now and then I get calls from prospective clients asking for some kind of pay-for-performance arrangement for SEO. Usually these are one-man start-up operations with “a great idea” and very little money. Sometimes it’s a more established company just scared of entering into a long-term contract that will produce unknown results. Either way, the desire for such an arrangement is certainly a valid one, but not always one that can be implemented as easily as it sounds.

While I don’t think the pay-for-performance pricing model is entirely unworkable, I think the cons far outweigh the pros. Logistically the tracking needed to ensure fair and just compensation for performance adds additional layers to the total process, depending on the metric used for “performance,” quite possibly making the entire solution unwieldy for productive SEO.


How do you make this work?

Pay Per Ranking

Probably the worst metric that can be used for performance is rankings. The model usually goes something like this:

Google positions #1 SERP:
$x when position achieved + $x to maintain this position / month
Google positions Top 3:
$x when position achieved + $x to maintain this position / month
Google positions Top 10:
$x when position achieved + $x to maintain this position / month

This model is easily adjustable to pay for top 3, top 5 or top 10 positions with different values being assigned to each position as well as each search engine.

The downside of this is that it doesn’t lend well to going after long-tail keywords. Surely a client will only want to pay top dollar for rankings on keywords that bring in the most traffic and sales. Long-tail keywords, which individually produce little traffic can collectively provide well over 50% of the total traffic stream for a site.

Pay for Traffic

Another mechanism used for tracking performance is to pay for traffic. With a measurable baseline, any increases in traffic can be measured with a dollar amount attached to percentages of increase. This gives the SEO free reign to go after both long and short tail keywords. However, this also allows the SEO to look for ways to drive large sums of unqualified traffic, which increases traffic stats, but will often provide little benefit for the client.

Pay Based on Revenue

This is probably the most fair pricing model, but also the most tricky to implement. It requires a fair amount of trust on the part of the SEO, believing that the client will fully disclose sales and revenue. But once those tracking mechanisms are in place it then becomes a matter of paying based on total sales, increase in sales, total profit or increase in profit, depending on the agreement. If based on profit, the SEO will have to take it on faith that the profit is as the company says it is, or ensure that they get access to the company books.

This model can be extremely lucrative for both the SEO and the client if implemented properly. However, this also brings us to the most significant downside of all pay-for-performance pricing models, and that is one of control.


Who’s in charge here?

Every time I’ve gotten into a pay for performance model I got burned. Each time I got burned it was due to having a lack of control over the site. Either we did not have direct access to the site in order to implement the strategies we knew would work, or the work we did implement was overwritten by the client. The most recent (and last) time that I ever agreed to go pay-for-performance was when a designer friend of mine asked me to get into a project he was working on for a client. I would get a cut of his revenue share for implementing the entire SEO strategy.

We spend many hours, weeks and months performing research, implementing SEO strategies, fixing problems and slowly getting the site to a place where the search engines would find it valuable. Then one day the owner of the site decided he wanted to switch to an entirely different back end system which threw all of our work out the window. He was convinced that this would generate more business for him, but it essentially made all of our time and hours a wasted effort.

While we never recouped our investment, but I did learn a valuable lesson of control. Even if I were somehow convinced again that a pay-for-performance pricing model was a good investment, I would not perform any SEO services unless I was given 100% control over the client’s website. This, of course, is something very few clients are willing to hand over. And I certainly wouldn’t blame them for that.

A good analogy for pay-for-performance SEO is that of a dietitian asking to be paid based on the amount of weight lost by a client they are consulting. The dietitian may set the plan, medications, workout schedule and menu for their client. But if the client sneaks Big Macs and Ice cream on the side, lounges on the couch instead of getting on the treadmill, or adds a few extra high-carb foods into their meals, then the weight lost will be minimal if at all. In this scenario the dietitian would be considered a failure by the client and therefore would not get paid.

This analogy may sound silly but it works very will with SEO. The SEO does the research, creates the strategy, and may even implement his work throughout the site. And the next day the client can wipe out all the effort the SEO put into it with a single decision.

Just as the dietitian is ultimately not responsible for what the client does with their body when once they leave the dietitian’s office, the SEO cannot be held responsible for what the client does or doesn’t do with the website if the plans outlined by the SEO are not being followed.

But when considering a pay-for-performance model based on profit and sales, it goes much deeper than just control over the website. The SEO may be able to implement strong optimization strategies that do a great job of getting qualified traffic to the site and entices people to either pick up the phone and call, fill out a contact-us form, or purchase a product. But that’s not the end of the story.

The process here on out is completely outside of the SEO’s control. They are not involved in customer service or how the business owner or employees interact with potential customers on the phone. Nor can the SEO act as a sales person for the company. Even still, the SEO is not responsible for the quality of products which are sold or ensuring great customer service. All of these things can affect the client’s bottom line, and therefore how much profit is achieved and shared with the SEO.

Does the SEO being paid for performance then have the right to tell the site owner how to run their business? Can they dictate the design of the site, forcing the client to make whatever changes that are deemed necessary, regardless of cost? Do they have permission to toss out all the content, train the sales staff or educate the team on customer service all the way down to how to respond to emails? Can the SEO veto product selection and have a say on quality, pricing and profit margins?

Most business owners would find this ludicrous. They would no more be willing to give up such control of their business than an SEO would, er, want to get paid based on how well the client runs their business.

While some SEOs have figured out how to make the pay-for-performance pricing model work for them, I remain skeptical. I enjoy helping others succeed in business, but I have my own business to run and have no interest in running someone else’s. If I wanted to do that, I’d just go and start it myself and be your competitor!

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Continue Reading: Is the Pay-for-Performance SEO Model Still Viable?

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