Selling SEO Services on a Performance Basis

Mar 14th

SEO Question: Some prospective customers have offered to pay me on a performance basis. Should I consider providing search engine marketing services for these types of clients?

Answer: There are many ways to structure these sorts of deals, but generally I would probably avoid most of the offers because a lack of willingness to pay until results are achieved is often an indication of a lack of trust.

Trust and Toxic Customers:

If a customer does not trust you enough to pay you until after you show results they may not trust you to access their site or implement your suggested changes. This lack of willingness to consider optimization elements away from search is the single common problem associated with most toxic customers.

It is easier to push your own good idea than to push a bad idea owned by a person who is rigid and hard to work with.

Selling All Traffic as PPC:

If they will not give you access to the site you can still give suggestions that you hope they will implement, and you can still build links. Selling traffic as PPC minimizes the upfront commitment on both sides, and allows the SEO to still get paid even if their site can't convert. These deals can be structured in many flexible ways:

  • set minimum and / or maximum spend caps

  • set contract term length and opt out clauses
  • set price as being flat rate per click, or allow both partners to adjust rates when it makes sense
  • do not charge for brand related searches
  • specify what traffic sources are valid (ie: pay for Google searches and traffic from other engines, but do not pay heavily for a Digg homepage story)

As an SEO, selling traffic on a PPC basis protects you from conversion errors on their site, and may make them more likely to listen to your conversion advice. A good SEO should be able to sell traffic for less than comparable PPC traffic.

If you set your price point high enough you can start off by selling them relevant PPC traffic and then easing off the PPC spend as your organic optimization gains traction. Some SEO companies may set up third party sites to drive traffic, which protect them if a client decides to cut their budget.

I believe Barry Lloyd was one of the first to sell SEO services on a per click basis, but I believe he has since moved on to selling PPC management software.

Pay Per Ranking:

Some clients think they need a few certain trophy phrases even if that is not the case. Some deals with a single trophy phrase or wide related keyword nets can also be sold on a pay per ranking deal, with so much being paid for ranking in different engines for different keyword phrases. Make sure both parties have the same idea as to what the goals are and how long a page must rank to receive payment, and when the payments are due.

Affiliate Websites:

If a merchant reveals an appealing vertical, but does not want to pay enough to make it worth your time, consider setting up an affiliate website marketing related offers. This allows you to chose whatever affiliate programs pay the most, while ensuring you get paid recurring revenues even while you are not actively promoting your site.

Sites Worth Partnering on a Pay for Performance Basis:

  • Related Sites: If you already have a related site that can drive significant traffic a partnership makes sense, but probably as an affiliate rather than an SEO. But if you help them on their site it should be easy to provide value if you already know their site well.

  • Large Brands: If you see structural errors that are holding back large brands AND they are willing to act on your advice they may see significant upside so will the SEO, but most large brands will be adverse to these type of deals.
  • Small niche players: (perhaps even local niche sites) that take limited time to work on are also nice to work with, but be careful not to do too many projects like these or they can weigh you down during shake ups. Algorithmic shake ups are periods of opportunity if you have free time to roam, but may be periods of hurt if you have too many clients.

Sites Not Worth Partnering On:

  • New Sites in Competitive Fields: If you have to go through all the work to build up a new site you are probably better off building up your own site than building up someone else's site from scratch. The one time these types of deals make sense is if you really believe in the upside potential of an idea and can get an early equity stake.

  • Thin Content Sites: If their site is already doing exceptionally well, but has serious issues and is just waiting to get nuked then they may blame you for the fault that was just waiting to happen. Stick clear of thin content sites and sites that are designed more for bots than for humans.
Published: March 14, 2007

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Comments

March 16, 2007 - 5:36am

Hi

I think what most people here are referring to is SE marketing, SEM

to "optimize" (SEO) is to make a site SE friendly with correct code, and SE usability. and rank high

or at least that is the definition in every dictionary available on the planet

I know that Targeting is an arm of marketing, however, there are very few marketing firms that even rank on any search engine, what they do is different, and if straight marketing where the final answer, most seo's would be out of work, and there not,

Conversion should go up naturally with seo work, most seo's actually try and combine the two for the benefit of the site. But if you have to optimize a site that is pink and orange with bright green stripes, and they wobble,
chances are most people will click away.

it will still rank, job done, but getting them to convert,,,,
takes in marketing, not SEO.

just my 2 bobs worth,

In answer to, should you use PPP. Pay per performance. , YES, if there is a market asking for a product and "your" getting Asked for it,, OFFER IT,.,

thats coustomer service,

Kindest regards
phillip

A Reader
March 28, 2007 - 6:09am

Good post. I guess the key here is defining the benefits of the deal, just as in any other case. Mostly, performance clients are cheap buyers, but sometimes a great idea just needs a little push.

Deke
March 15, 2007 - 2:29am

Hey Aaron... I think that question is a good question that you answered wisely.

I would be interested in hearing your thoughts on whether or not a website that sells ad banners should disclose their site's statistics to potential customers.

For instance, I have a big website that we sell lots of banner ad space on. We don't get the most visitors in our online space, but our conversion and CTR's are extremely high because of how we have structured our designs so the banner ads will succeed.

I would rather not give any information regarding our site's statistics, as the statistics alone will never convey to our customers how good of deal our advertising truly is for the price.

Do you think it is necessary to provide site statistics to potential banner advertisers? Thanks Aaron.

March 15, 2007 - 2:57am

I think you should be able to give at least some statistics if your primary model of business is ad sales. And if your traffic converts well then start mixing in affiliate ads if those will pay you more.

March 15, 2007 - 3:29am

Maybe the biggest thing I took away from Elite Retreat was that I was done with clients altogether. Then within just a week or two, as I was wrapping up work, I had a nightmare experience with a client that confirmed that it was the best decision I had ever made.

As someone who has definitely had a lot of success online, you certainly have the ability to not have to take on clients. Because of that, I'd love to see a post on why you do. Why not just spend your time building your own sites instead of helping them for a one-time fee?

March 15, 2007 - 3:38am

Yeah, you definitely gave a great answer on the pay for performance issue, Aaron. I'm a little confused, though, about not having anything about "Here's your stats now and here's how they've been growing so we'll allow for the continued growth at that rate - but anything beyond that I get paid for." If everything else is fine with the situation and the agreement is all okay, it doesn't seem like it should be all that complicated.

Conversion is where marketing comes in. If all they want is SEO work, on the pay for performance anyway, shouldn't there be more for the SEOer for SEM work in the agreement? The questioner, IMO, should want the company to succeed well, and if their conversion rates stink, then that's also an issue that should be handled, at least within the company. A lot more work goes into increasing the efficiency of visitor paths though sites to help increase conversion rates than goes into optimizing pages, and internal and external linking structure.

The idea of setting up a sort of "traffic flow" network to help guide traffic to the site is a great idea! Those related but new sites could really be used in an interesting way if the company wants to back out once the results are achieved.

On the trust issue, there are a lot of companies who (I've read) have been royally screwed over by some dishonest SEO folks. I can understand why those companies would want to use pay for performance. It's also an idea advocated by Jay Abraham. He's told some rather gruesome stories about dealings with incompetent attorneys. Jay likes to promote that if people really can get results for you, then pay them through the nose (a lot) for those results because that saves you from wasting money on bad advice and work.

Later,
Russell :)

March 15, 2007 - 1:07pm

Russel: You raise some excellent points.

In my experience there's a lot of rotten apples out there in the business trying sell you SEO/SEM silver bullets.

That's why i normally adopt a pay-for-performance strategy when I'm contacted by one of those firms.

I have a saying: Traffic without some sort of conversion is an expense. Any SEO/SEM firm can with ease bring massive amounts of traffic to your site, but if that traffic isn't relevant (ie. converts in some form) then it's hurting your business.

That's why I think a pay-for-performance model is good. It forces the external partner to think about what's good for your bottom line, and gives them an incentive to improve it.

You don't have to use a pure pay-for-performance model. Instead give them a basic fee and a bonus if they reach certain performance goals.

March 15, 2007 - 3:52pm

I won't do pay-for-performance work period. I've tried that on several occasions and got burned.

Here's the thing, at any time the client and throw a wrench in the works. They can change design, link out to spammy neighborhoods, change their code structure, remove optimized pages, or simply refuse to provide good customer service. All of those things (and many others) will easily create performance problems, but none are the fault of the SEO.

Now if a business wants to give up 100% control of its site and marketing then... well, then the SEO might as well be running the business for them and get 100% of the profits.

Kirby
March 15, 2007 - 5:59pm

You left out rev share, which is different than pay for performance.

March 15, 2007 - 8:10pm

Does the increase in traffic lead to a higher, lower or the same cost per order? Which words convert best? How many conversions do you need before SEO has paid off?

Getting more visitors is no goal in itself. A visitor is only valuable if he/she performs one or more key actions on your website.

A serious SEO consultant should be able to provide quality traffic that at least converts as well as current traffic.

Therefore I think it's OK to get paid based on quality metrics rather than quantity metrics.

March 15, 2007 - 9:14pm

I don't agree with "A serious SEO consultant should be able to provide quality traffic that at least converts as well as current traffic."

I think some sites suck (ie: are no good at converting), and in many cases the owner is only really receptive to change when they realize that their site still sucks even with a top ranking.

March 16, 2007 - 1:32am

Aaron,

I think Lars' point was that new traffic should convert as well as existing traffic. IOW, if 10 unique yield 1 conversion then 100 unique should yield ~10 conversions. If it doesn't then perhaps it's not as targeted as it should be.

We've dealt with this in a number of ways. Rather than deferring payment we make guarantees, i.e.:

  • Pick 20 phrases we'll get you page 1 for 15, within time period X, or continue for free until we do
  • Double your traffic or your money back (only works for small sites)
  • Beat the CPC of your Adwords program (easy, easy, easy)
  • Convert at least as well as PPC $ for $

So, in my opinion, there are lots of ways to assure client confidence without deferring payment.

I agree, to a great extent with Stoney - perhaps not 100% of profits, but certainly some equity if I become your, de facto, marketing CMO.

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