Universally, it’s always easier to base SEO pricing on the “I’ll pay you X when you put me on rank Y” model. But in reality, it’s totally unfair to solely base SEO costs on a performance-driven model. It’s unfair not just in case of SEO but in all of internet marketing activities to ascertain the costs purely on the performance.
So, Are You Ignoring the Brand, Long-tail Keywords or Team Contributions?
Pay-for-rankings, also known as performance-based SEO, is an innovative new way to price SEO services that is rapidly gaining customers. Everyday a new web hosting site pops-up with a ‘pay only after when you achieve rankings’ slogan. They are inconsiderate of the stuff like brand, ROI, keyword worthiness, site placement and overall team contribution to SEO.
SEO is Intangible and It’s Very Difficult for Client to See It Any Other Way.
There’s no doubt that the client’s risk is significantly reduced with a pay for performance model. SEO service is not a very tangible product that it’s hard to predict results and even harder to base a pricing model around those results. Most of the time client do not understand any other language but rankings when it comes to SEO. But believe me, as a company you don’t want to be struck with an agency on such kind of relationship.
During the service relationship, if it doesn’t work out for whatever reason between you two, the agency would still keep getting a slice of your every sale. It gets difficult to resolve it completely if this clause isn’t accounted for in the negotiations itself. In a performance- based contract it’s usually that every penny you earn a share of it will go to the agency. In case of breakdown how will the incentivization be terminated if it’s entirely on performance basis At worse, you’ll be struck with the agency for many years on.
Client isn’t Good With Tracking, That Means a Lot of Chasing After Him!
Client isn’t always well-versed with tracking conversions, that means at the end of every month there will be a lot of persuasion over money from your end to track and every single source of a lead/ sale. To the worse extent, if client’s an experienced one and is fudging around with numbers to escape paying the performance fee. It’s always safe to address in the negotiation stage- how both parties are going to track and monitor the performance triggers.
Discrepancy at either of the end is going to cost you, as an agency. You must be very confident in your skills and forecasting ability in order to enter into a performance-only type of agreement. You must allocate enough labour and marketing amount in the beginning of the campaign as it can take 3-6 months before a site gets any traction from the search engines. This means you are shelling out cash (in the form of labour, time spent and direct costs) to get results, with no promise that the results will reap conversions.
Ruling on a Single Keyword is Equally Wrong.
Trying to rank for that ONE Keyword is fun. Making customer rule a single keyword or set of keywords. But it’s a terrible under-utilization of your capabilities as an agency, If you are paying attention to search visibility first and keywords second, you’ll get better results, such as:
- Moving up in the rankings for lots of long tail keywords longer, less-competitive phrases.
- These longer phrases, combined, will almost always generate more traffic, sooner, than any single keyword no matter how competitive it might be.
- Those longer phrases will also bring you visitors with better, more focused intent. So, quality of leads with better chances of conversions double-up!
Also, rankings have become very difficult to measure. With the rise of personalized search results, two people can see two different rankings for the same term, on the same day, in the same city. So, objectifying a rank could not be giving an absolute picture.
In it, you as a client, are at a greater loss. Paying agency for rankings just encourages them to be nasty. If you’re going to pay them whooping $100,000 after 90 days for the #1 position for pistons, then all they have to do is keep you there for 90 days. This can be done unethically by investing some $40,000 in brokered links and some parasite hosting using a few other dirty tricks. and there! You get your rankings at #1!And bam, the moment your cheque clears with the agency, they take down the links and parasite pages to save some money. And you plunge out in the rankings. What follows is a back-and-forth heating mails sessions!
Finally, paying for rankings encourages poor marketing practices. It tilts your entire strategy away from great unexplored storytelling and smart site development tactics, towards how many times can I repeat pistons on this page.
So, Which Model is a Sure-shot One
Some of the best models that can work for both sides, are as follows:
- Retainer-based: Not much popular with clients, but provides the most flexibility to your agency. You pay a flat fee each month. They work hard and report back every week/month. Repeat this. If they don’t stand on your expectations, you fire them later on.
- Flat fee-based: Pay someone a flat fee for a super-deep one-time review and recommendations for your site. Then you either make the changes on your own or pay someone else to make those changes. This limits long term results a bit, since there’s no steady effort. But it also limits your risk. If you’re an in-house SEO, it’s a great option.
- Percentage of revenue or pay per lead: This can work really well. It’s another performance approach but it’s tied directly to the company, not rankings.
- Hybrid pricing models: Direct compensation coupled with a performance based arm is starting to gain some attention in SEO. Since so much work goes into the initial campaign, SEO agencies should be directly compensated for that amount of work. Then the SEO Company can craft a performance based piece for the ongoing campaign.
Be it you are a client or an SEO agency or even a SEO- mogul/ freelancer:
“It’s not about paying for a ranking, or traffic. It’s about THAT result, and a relationship born out of it.”
P.S.: Beware of Those Fraudulent Web- Hosting Agencies!
Many unscrupulous companies that revolves only around generating fraudulent clicks, calls, form submissions, or whatever in order to get their performance based fee. The agency will never admit to doing this so, it’s on the client’s shoulders to monitor and track the conversions (or whatever the performance trigger is). Stay clear of those unlisted companies with false/ distorted numbers!