Billing for results not by the day. Thought?

[DaddySmurf]

Hi,

We are searching for a new SEO provider for www.compoundsecurity.co.uk and I notice that some SEO providers are now billing against results rather than days spent doing the work.

Considering the high prices and lack of work done for those fees by current provider, this is of interest to me.

Does anyone have experience of working this way and or have any advice please?

Thank you

[SErOb]

What are "results"?

Are you willing to turn over your entire site to the "SEO provider"?  If not, it's truly difficult to pay for results.

It's a two-way street; your SEO firm can only be effective if you're doing your part.   The days of paying a company to "go out and do some SEO" are long gone.

[EGOL]

If someone asked me to work on the basis of results I would decline.   Why?  Because I don't have any control over new companies entering your business niche.  That is market risk that belongs to the business owner, not a service provider.

Even if you offered me a percentage of sales I would not take the deal because sales are determined by factors that you control such as retail price level, shipping charged, quality of staff serving the customer and more.

SEOs have a base line value on their time that is determined by how much they can earn by doing other things.  If you want the time you gotta pay the price.

Perhaps SEOs who are new to the market or those who will do "anything required" to get your site ranked and collect the fee will be interested.  But they might not be able to hold those results once Google figures out that they have spammed.

[IrvCo_Interactive]

I do have some experience in this area. If you operate a highly measurable marketing program, some web marketing agencies will agree to a "pay per performance" model of compensation, but you will have to work with them for it to be clearly defined, and they will still want a flat rate compensation for their hours spent. At the end of the day, agencies want to get paid period. And they should be. You may end up paying more for their services going this route, so if saving money is your concern I wouldn't recommend it. If ensuring that your agency can deliver and that they have some "skin in the game" to keep them honest, then this could be a great direction.

A typical setup I've seen is the agency will give you their hours at "cost" or a very low rate as a baseline to cover their expenses and time, then if you have very good past historical performance reporting setup, and they are comfortable that they can do what they say they can, you can define a payout based on "results" such as website conversions from organic search sources. So comparing year-over-year, say you got 100 conversions in October 2012 from organic search, you could say for every conversion we get in October 2013 above 100 you get 25% of the revenue, or something like that.

Also keep in mind, the industry is somewhat in free fall right now in my opinion due to the increase of "not provided" keyword data. In the past, you would do a contract like I outlined above specifying that you would not count branded keywords. The last thing you want is to run a magazine ad which increases searches for your brand 2000% and have to pay the agency for the influx of organic search conversions that you would have gotten anyway! With all the organic search data lumped into one bucket now, I don't see how that will work anymore personally.

[Dan-Lawrence]

Some seo's have been offering this type of billing, on results only, for quite a long time now.

I can see the attraction, although i would never offer it myself, especially since the consequence of a good contemporary seo program extend far beyond ranking results.  For example an SEO's efforts sorting out all the social media profiles for the SEO benefit and advice or work on the ongoing social profile management would likely result in more reach, engagement and hence traffic and hopefully sales and increased brand awareness and reputation etc etc.  Hence client would likely be receiving high value results from social immediately but not paying anything for it. So i wouldnt be happy working like that.

I would ask what defines a result that justifies billing ?

Is it simply a ranking result for keywords they choose (in which case be very wary since they may not convert) OR keywords you choose based on research OR is it conversions from organic search result to your website OR is it an actual sale tracked back to organic search (& arguably social too if they are doing a holistic 'Inbound' package).

If its the latter and the CPA (Cost Per Acquisition) they propose/you negotiate leaves you with a profit then worth considering.

Interested to hear what other think ??

[EGOL]

Are you willing to turn over your entire site to the "SEO provider"?

That is a good idea.  If I am going to do SEO on the basis of performance I will start my own website and sell the leads or dump the shopping cart to the highest bidder.  Then I get paid for everything that I kill and can move the business to Company B if Company A does not perform.  I would also then have complete view of the activity on the site and the transactions that occur there.

Just like being an affiliate or having a drop shipper - which I currently do.

[DanielFreedman]

I agree with EGOL. I would decline a "pay for performance" model because too much is out of my control: client cooperation, algo updates, new competitors.

Performance and accountability are important. Who could argue with that?

But just because previous providers  haven't delivered, it doesn't necessarily follow that shifting to a pay for performance model is the way to go. This often degenerates into the futile pursuit of phoney metrics, eg. ranking for non-competitive terms, social media shares, etc...

You need to find a provider you trust with a track record of delivering results. Limiting yourself to those who will accept pay for performance compensation may limit your search -- and your bottom line results.

[EGOL]

** just because previous providers  haven't delivered,...**

I know a few people would say the problem is a lack of vetting.

[KeriMorgret]

This subject often comes up in Q&A, both by people wanting to hire using this method, or sell their services with this method. All of your arguments here would make for a good YouMoz post if someone was interested in giving it a comprehensive treatment.

[DanielFreedman]

Keri:

You are such an instigator! Sounds like you are angling for a joint blog post from me and EGOL.

In your evll and nefarious way.

NYAH-HAH-HAH.

<<evil grin="">></evil>