Last week I was contacted via referral by a business owner wanting SEO performed on his site. It was apparent within the first 12 seconds of the phone call that he had had his fill of SEO promises and possibilities. He said his site was just redesigned with some SEO design practices but his site wasn’t ranking page 1 for any strategic keywords aside from his company name. He also said he had been talking to other SEO Specialists who wanted to charge him “an arm and a leg” to rank on keyword phrases he thought he already should be able to rank for.

I told him I would take a look at his site.

Sure enough, his site was filled with typical beginner SEO mistakes:  unfilled title and alt tags, chronic duplicate meta data, no keyword-rich anchor text…

So I asked him, “Do you know what your rankings are now?”
“Not really.”

“Do you know what your rankings were before?”
“Not really.”

I asked the following question, already pretty certain of the answer:

“Do you know what kind of traffic your website is getting?”

You could probably guess the answer.

Skipping to the end of the page, the prospective client didn’t have any web analytics on the site, the site wasn’t in the search engine webmasters, and the person in his company who was monitoring his IT wasn’t sure how to get to the server logs.

So I did something some SEO Consultants will hate me for: I walked the IT guy through the steps to adding Google Analytics to the site and verifying ownership of the site in Google Webmaster Tools, looked over his work, told him what he missed, and helped him finished the process.

And then I didn’t charge the client (you can commence with the yelling now).

The reason I didn’t charge for the hour of consultation was because I can’t show the client the effects of my work if he has no SEO baseline with which to compare. Not only that, but the client would not be able to see how far along his site has come unless he knows from where it came.

And now because the client has the beginnings of an SEO Baseline, he can better appreciate the necessity of my labor.

You will see the SEO Baseline as “metric of progress;” clients will see it as a return on their investment.

Now, because the client has a better grasp on what we’re working towards and why we’re working towards it, I can call him my “client” because I got the gig.

And for those upset I didn’t charge for analytics and webmaster implementations, relax. I haven’t trained the client how to use Google Analytics yet.

What is The Combo Platter in SEO pricing?

The Combo Platter is really just a combination of two or more different pricing models in one SEO contract or agreement. For instance, a professional SEO is contracted to do SEO for a client with a new website and to design and create content for a new blog. This contract may have a flat, project price for the SEO package, an hourly consulting price for blog design and content work, and a retainer agreement for upkeep and ongoing maintenance of SEO work on the website as well. Sure, this is just one possible combination but the point is, most SEO agreements utilize more than one of the most common SEO pricing models.

What does Combo Platter pricing mean to SEOs?

SEOs, this means you can match each individual project or element of a project to the pricing model that best suits it—no need to pick just one. What you want to do is make sure that each item in an SEO agreement is priced in a way that is equitable to both you and your client. An hourly price may be the best way to price new site copy, and profit-sharing might be how both you and your client want to price your basic SEO package—so use both.

Be flexible, choose pricing models that are appropriate for a particular project or task and be consistent—use what works. Clients will come to understand and rely on your pricing systems and constant changing from project to project can erode confidence in you and your work.

What does Combo Platter pricing mean to SEO clients?

Clients, it means you will rarely, if ever, see an SEO agreement that gives one blanket pricing model for all of the varied services that fall under the “SEO” umbrella. Don’t go searching for a pay-for-performance SEO, or limit yourself to SEOs that strictly work on retainer—your unlikely to find these people. Why? Because different elements of SEO require different amounts of time, effort, and research and have different metrics to measure success. For that reason, your SEO agreements are likely to require multiple pricing models so that you get an appropriate and measurable ROI and so that the SEO is compensated equitably as well.

Understand how each pricing model works, know what works for you and your budget, and remember that a professional SEO will know which pricing models serve best for their different services. Feel free to ask why they use the SEO pricing models they do and why they avoid certain pricing methods. Explain your budget and pricing preferences and remember that using a combination of pricing models will allow you a greater benefit and a more tailored SEO price—and, it’s likely to save you a lot of money over a strict single-pricing model SEO agreement.

Do you want to pay an hourly for monthly SEO maintenance? It would vary by month and who can predict how long it will take until work is well underway. Or, how would you calculate a pay-for-performance pricing method when it comes to writing new website copy? Not all pricing models work for all SEO projects and trying to fit all SEO work under one umbrella pricing structure could lead to client overpayment, inadequate compensation for the SEO professional or confused and imprecise calculations of pricing.

For clients, planning budget and payment with multiple pricing models for your SEO can get a little complicated. You’re measure hourly work for one thing, a standard monthly retainer, and possibly a profit-sharing payment for other elements of your SEO agreement. Be precise, keep thorough records of your payments and ask questions when you have them. The extra work is well worth the payoff—clear cut, equitable pricing.

SEOs, for you’re the downside is the same—a little more paperwork to keep track of. But, with each project priced appropriately, you’ll see that your compensation will equate to the time and effort put into a particular task—no more discouraging unpaid late nights and long hours that erode relationships with clients and produce less-that-stellar work.

What to remember if you use The Combo Platter …

• Both SEO and client need to remember to use the appropriate pricing models for a project or element of a project. Pricing models like pay-for-performance and profit-sharing, for instance, work well where there are good metrics and methods of measuring success, and tasks such as copy writing may be better suited for an hourly rate or project price.
• Openly discuss pricing with your SEO, ask why they have chosen to use certain pricing models and not others. It can be helpful in coming up with the best pricing arrangement for you and may help you find options that are better suited for your budget.
• Finally, keep doing your pricing research. Pricing models and terminology are constantly changing in SEO and you’ll benefit from keeping up-to-date on what options are available and the benefits and detriments of each.

And, that’s it for our series on pricing—but it’s by no means all there is on SEO pricing. Whether you’re an SEO professional, client or prospective client, keep reading and researching SEO pricing so that when the time comes, you get the most for your money with SEO.

As we wind down on the SEO pricing series, we’re covering monthly retainer pricing—our last popular, stand-alone SEO pricing model (check back next week for the Combo Platter, our last topic of the pricing series).

What is a monthly retainer?

Most people associate the term “retainer” with legal fees. You pay a set dollar amount as a retainer (down payment of sorts) with additional charges being billed to you after your fees have exceeded your retainer. In SEO, using a monthly retainer fee typically works a little differently. A monthly retainer in SEO is a set monthly charge for predefined SEO upkeep and maintenance work. The fee covers certain defined monthly tasks or is paid monthly for the continued oversight and maintenance of larger projects without specifically defined tasks. Work done above and beyond the predetermined maintenance would incur an additional charge, possibly on an hourly consulting basis.

Monthly retainers in SEO are typically used to foster long-term relationships with clients and help protect their SEO investment. SEO professionals know well that when a large, and costly, SEO project is complete, months of hard work can be outdated and growth can cease within months without proper SEO maintenance. Pricing this maintenance work on a project basis would take lots of time, renegotiating projects and price each month, evaluating time needed and a final price time after time—this would discourage any client and wear out busy SEOs. Hourly pricing is so unpredictable it would discourage clients from doing much needed maintenance. With a monthly retainer you can avoid these pitfalls and make ongoing maintenance a simple arrangement—for a monthly fee, the upkeep and maintenance is taken care of without any uncertainty as to price or any negotiating of projects.

What does a monthly retainer mean to SEOs?

First, let’s start with what a monthly retainer isn’t: it’s not a good pricing model for a new SEO project. The workload in a new SEO project is too great with too many unexpected projects and unforeseen issues—an SEO would be severely underpaid with a monthly retainer. And, when the upfront work is complete and you move to a maintenance phase there’s a decrease in workload that wouldn’t merit the same retainer fee as a new project. In short, it’s just too hard and both you and the client will be unhappy at some point during the relationship.

What is a monthly retainer then? Monthly retainer pricing is a pricing model ideal for long-term relationships with clients. You work hard and clients make thoughtful investments in SEO, but without proper maintenance your work and the client’s investment can be moot in a matter of months. So, monthly retainers make the necessary SEO upkeep a simple arrangement that can be easily budgeted. The workload involved in SEO maintenance remains relatively constant, which allows you to arrive at an equitable monthly price to cover all the necessary work. You maintain a relationship with clients and their investment is protected for long-term performance—everyone’s happy.

What does a monthly retainer mean to SEO clients?

For clients, a monthly retainer is a very simple concept. You protect your SEO investment by making sure that investment continues to payoff long-term. And, you do this for a predetermined monthly fee—much easier to budget for than unpredictable charges you’ll need to pay when your SEO work starts to become dated.

The upside…

Monthly retainer pricing is a great incentive to continue the relationship between SEOs and clients. And, when proper maintenance and upkeep is done on an SEO project, you protect the investment and protect and build upon online growth. And, monthly retainers are a predictable, easily budgeted cost and a client will see the value in protecting their investment.

The downside…

This is not a do-it-all pricing model. Monthly retainers are best suited for on ongoing monthly maintenance system. New projects are difficult to price and execute under a monthly retainer agreement—time requirements fluctuate so much at the start of an SEO project and price is hard to set because of this. Monthly retainers for ongoing maintenance are also a cost that many marketing departments and companies don’t budget for even when starting out on an SEO project so SEOs will need to discuss this option at the outset of a project or risk putting a client off with the mention of an ongoing fee to maintain work they have paid for.

What to remember if you work for a monthly retainer…

• This is pricing for SEO maintenance, not for a new project. No one comes out happy if monthly retainer pricing is the exclusive pricing model for their SEO.
• Define what work is covered by your monthly retainer agreement AND the pricing model you will use for approved work beyond the scope of the retainer agreement.
• And, SEOs be proactive. Just because you are working on a retainer doesn’t mean that you just do your basic maintenance and move on. Explore options to expand on SEO growth, incorporate social media or improve upon the existing website. Convey recommendations to your client regularly and even pass along estimated pricing for implementing recommendations. It’s easy to become complacent when your SEO continues to improve and grow—let clients know that is much more they can do to grow their web presence.

Make sure to check back next week for the final topic of the pricing model series. We’ll bring it all together, literally, to talk about utilizing multiple pricing models to make a pricing system that works for you and your clients.

Can you add to our SEO pricing conversation? Feel free to leave your questions and comments!

The internet offers businesses the chance to get off the ground with very little overhead—just a website, a product/service, and a dream. And, with manufacturers and distributors feeling the crunch, many are offering lower prices, discounts and other incentives in order to move inventory when sales are slowing. If you can meet a demand, you can succeed in starting a business even now. As these new businesses find their niche and need to get the word out online, the SEO professionals of the world need to be there to help them steer their marketing budgets. Wait, what marketing budgets? Exactly.

With a profit-sharing pricing structure, SEOs can capture this new recession-thwarting client. You create a relationship akin to a partnership where both SEO and client are driven to increase profits and both are rewarded for success.

What is Profit-Sharing Pricing?

For SEOs, profit sharing means you make money when your client makes money. Your payment for work completed is a portion of your client’s profits—which for SEO and other online marketing, is limited to a portion to revenue from online efforts rather than gross profit. This pricing model can be a real motivator for SEOs—the better your work performs, the more you get paid. But, don’t expect to retire off of one job. These agreements will typically include specifics such as time limits, caps on compensation and other contingencies so that your SEO doesn’t become a permanent expense.

Although it seems similar, this is not pay-for-performance. With pay-for-performance pricing, SEOs receive payment for their work when a certain search-related goal is achieved. For instance, a lump sum payment is made when traffic to client’s website has increase 40%. With profit-sharing, an SEO’s work focuses on the end result—sales. The SEO professional gets paid when their work results in increased sales for the client. The more profit that results from the newly optimized site, the greater the SEO’s payment. And, these payments can continue over an extended period of time which means long-term, reliable income.

What does profit-sharing pricing mean to SEOs?

First and foremost, this means motivation. With profit-sharing, you and your clients essentially act as partners, both mutually focused on the end results. If you’ve established a mutual reliability and trustworthiness, you can earn based on the quality and performance of your SEO work. Think of this as pay-for-performance in reverse. Pay-for-performance favors the client in the sense that you only get paid when certain measurable goals are met. With profit-sharing, you are rewarded for every level of success achieved—your payment is commensurate with the client’s success.

Profit-sharing also has the added benefit of budget-friendliness in today’s economy. Clients will pay you based on their income—which means they can be assured they will have the cash on hand to pay. Companies taking advantage of start-up opportunities and growth potential now can reap the rewards of SEO without risking their budgets with a hefty investment with no evidence of pay-off. It also means that clients can afford your quality work—use this as a selling point. There is no need to use the less-than-savory $39.95 guys who promise twenty to rank you number one in Google in days. Deep down we all know those guys are a bust, but when budgets are tight (or don’t exist), the “something rather than nothing” mentality takes over. With profit-sharing, you can help clients avoid the bargain basement SEO trap.

What does profit-sharing pricing mean to SEO clients?

For the right SEO client, profit-sharing can be the difference between SEO and no SEO. Whether you’re a startup or looking to grow your online business during this recession, profit-sharing pricing for SEO can allow you to reap the rewards of SEO without a large upfront investment. With an SEO you trust, you can share the risk and share the reward.

Just remember that there is a premium to pay for this shared risk. If you could afford to make the upfront investment for quality SEO, you may end up paying much less than you would pay over time with profit-sharing. Structure agreements carefully and remember to budget marketing and all other expenses accordingly. Plan for success with your SEO and account for the profit-sharing distributions to your SEO when creating other budgets and projections.

The upside…

The upsides to profit-sharing are quite simple. For SEOs, you get paid based on results and your benefit increases as results improve and profit grows. Clients, you know that you and your SEO are focused on the same goal—profit. Working together can be much easier when there is a feeling of partnership and a vested interest in the outcome of the SEO work. And, this can be an affordable pricing model even for startups and companies new to e-commerce.

The downside…

This one is pretty easy, too. First, you have to have very specific tracking capabilities to track some online transactions through to offline profits—specifically lead based sites with long sales cycles. It’s not impossible, just make sure there are analytics and tracking methods that exists and that both client and SEO are confident in their accuracy. As with any agreement, a profit-sharing agreement requires attention to detail. Include dollar amount caps for SEOs share of profits and include minimum payments so that SEOs will see a reliable base-level return even in slow times.

What to remember if you use profit-sharing…

• SEOs, remember to make sure that your clients have accurate methods of tracking online leads and transactions to offline sales. Your payment is based on profit derived from the web so you need to be confident in the analytics. Lead-based businesses can be tricky, so double check the tracking methods and think about using alternative profit-sharing measurements such as a percentage of increase in online sales for a current online business, or a percentage of increase in overall sales for a client just starting out online.
• Clients, as always, trust your SEO professional. If they don’t use profit-sharing pricing, it’s a decision that is based on experience. Feel free to open up the discussion of pricing models but don’t write off an experienced SEO because they don’t offer a pricing model that you think is right for your business. Ask about the benefits of their preferred pricing models and how they might work for your budget and situation.

Check back next week for our discussion on monthly retainer pricing for SEO. And, as always, if you have comments, questions, or input, please feel free to leave a comment!

The argument made by Coke, and supported by other heavy hitting advertisers like Anheuser-Busch and Procter & Gamble, is that effort doesn’t necessarily equate to value. Even companies with marketing budgets in the billions want to see maximum return for each dollar spent, and they don’t want to pay for anything short of success. Is the economy forcing the marketing and advertising industry into a new era of accountability?

Let’s look at how Coke is breaking from their old advertising compensation methods:

“BEFORE: Agencies and Coke negotiate in advance how much profit the former will see on a given project.

AFTER: Agency is guaranteed only recouped costs, with any profit coming only if certain targets are met.

BEFORE: Agency decides what Coke should pay for a project based on the time it expects to expend on it.

AFTER: Coke tells agencies how valuable a project is based on strategic importance, whether other agencies could deliver the same outcome, and other factors.”

(AdAge, 4/27/2009)

The idea seems simple and straightforward, but what are the downsides? Well, advertisers aren’t as likely to take risks if they might not paid. And this could be particularly damaging for SEOs and online marketers—an industry that is still in a growth phase where taking risks is part of the landscape. Do you spend your time putting together a social media presence when you’re not sure if your hours of effort can achieve a preset goal? Will the perceived value of new online platforms match with the effort required to take advantage of their advertising and marketing opportunities? Client responsibility is a large part of SEO success, how do you account for this element in a pay-for-performance situation?

What does this push for value-based compensation mean for online marketing and advertising? First, the line between traditional and online advertising is becoming blurred—advertising is advertising these days so this push for pay-for-performance certainly applies to online marketers, not just traditional ad agencies. SEOs need to prepare for a new push for pay-for-performance pricing models, learn the ins and outs of how to properly execute these agreements and the pluses and pitfalls of these types of agreements. This call to action is to the greater advertising industry but online marketers are the best equipped to implement pay-for-performance pricing models now—be ready to meet this demand head on.

Second, traditional advertising may have some legitimate arguments to dissuade companies from using pay-for-performance and other value-based pricing models but online advertising doesn’t. Specifically, SEO and PPC offer precise results and advanced analytics that allow you to pinpoint the exact number of unique views for a particular webpage or online ad—print advertising and television can’t come close to that. Get your analytics in order now. SEOs, make sure you study up on short and long terms trends, industry averages and other factors affecting your clients’ results. Reading up will help you work with clients to set reasonable, attainable goals so that both you and your client will benefit.

Get ready, the pricing model for today’s economy is not just an option anymore. The world’s largest advertisers are calling for a shift to pay-for-performance and many are likely to follow. SEO and online marketing offer the analytics and quantifiable results necessary to make this change happen fast so now is the time to prepare yourself and your business to make the shift.

Project-based consulting pricing is a very commonly used pricing structure for SEOs that, if applied to doing the dishes in my family, would allow me to price the chore based on my time and effort input while the person footing the bill avoids paying me more because I’m slowly dragging through the project. I give a flat fee for dishwashing; they can compare to my competitors and take it or leave it. A real win-win situation if things are done right.

What is Project-Based Consulting Pricing?

The name really does give away the punch line; project-based pricing is an all-inclusive price structure that gives one flat fee for a specifically defined project. It’s commonly used by SEOs because it’s a simple and well-defined way of dealing if the agreement is structured correctly.

This flat fee is based on a reasonable estimate of the amount of time needed for a project, personnel needed, expenses and other costs of the project. Unlike with hourly consulting pricing where an SEO may include an estimate of hours in the agreement, Project based pricing is a flat fee that cannot change if the defined project requires more time and resources than originally anticipated. That’s why project-based pricing models require well-written and detailed agreements so there’s an equitable outcome for SEO and client.

What does project-based pricing mean to SEOs?

In today’s economy, certainty of ROI in any marketing investment is a really convincing sales tactic. With project pricing, you may not be hinging payment on results, as with pay-for-performance pricing, but you are committing to completing a set project for a flat fee—no surprises. This means that this pricing model is a lot less adaptable than an hourly pricing structure so be sure to use this when you believe there is a clearly defined project with a low likelihood of surprise issues or problems. And, be sure to carefully draft these agreements to define the parameters of the project very clearly so that you’re not stuck doing more work than you accounted for in your pricing. A simple statement of “I will optimize your website, www.clientsite.com, for $10,000” is sure to get you into a lot of trouble. Define what goes into a project: a certain number of hours of keyword research, a word count on copy and content to be written for the website, etc.

Also, remember the dishes example and base your time and cost estimates on reasonable time and cost. Even if you’re the type of SEO that likes to spend hour upon hour writing and rewriting text until, researching until the wee hours and generally going beyond the call of duty, you can’t expect that your client will always want to pay for the “extra mile,” and your competitors won’t charge for that extra effort either.

What does project-based pricing mean to SEO clients?

Clients, you know exactly what you are getting and for what price. Paying for results may be out of your price range if your SEO performs well (as you, of course, wanted) but project pricing is a nice middle ground between hourly and pay-for-performance. You get the certainty in price and you know the work to be completed. You also will want to make sure you concentrate on the details of your project-based pricing agreement. Make sure each element of the work you expect to be completed is included and defined. Don’t accept “website copy” as complete, that could mean any number of things from writing entirely new site copy down to simply reviewing existing copy and making suggestions for change. A simple way to make sure your project-based pricing agreement is clear and unambiguous is to test it on a third party—if it’s clear to them, it’s probably got enough detail to avoid any conflicts.

What you’re missing is the flexibility to adapt the project on the fly. If you and your SEO see that other work should be or needs to be done as you move forward, you’ll need to create a separate agreement and pay an additional flat or hourly fee. You can plan for this and include a set hourly fee for additional, unforeseen items in your project-based pricing agreement. This is a very common item to include and your SEO will likely include this in a standard project-based pricing agreement. If not, just ask…the idea of additional business from you should be well received.

The upside…

Simplicity. One project, one price; an easy thing for a client to take to their CFO and defined income that an SEO can count on. In this economy, SEOs can attract new clients with a budget friendly project offer and create lasting relationships that can bring additional revenue from project expansions and regular project maintenance.

The downside…

Lack of flexibility and demand for detail. These agreements come with pre-set parameters so it can be a little complicated to change directions or add necessary items as you move along in the project. And, both client and SEO need to pay attention to the details of the agreement to assure that everyone gets what they are paying for and gets paid for what they’re doing.

What to remember if you use hourly consulting…

• Pay attention to detail. Clients and SEOs need to draft these agreements carefully, explaining the parameters of the project in some detail. Otherwise, SEOs can end up underpaid or clients overcharged. Test your agreement on a third party—if they can understand the terms, what work will be done for the set fee, then your agreement will probably stand the test of any confusion or questions that can arise later on.
• Set limits on time for performance. Because the price is based on work, not time devoted, make sure you include a deadline for work to be completed. Otherwise, you could end up with a project that should take weeks dragging on for months. Remember the dishes: if you hired me to do your dishes, I may offer a lower price but I could drag the task on for hours, even days, if you don’t include a deadline.
• SEOs, set prices based on reasonable estimates. Account for time spent on the SEO basics and any additional items included in the project. But, just because you like to spend hours tweaking work that could be done well in minutes doesn’t mean it’s reasonable to factor that extra time into your price. Your competitors won’t, so don’t risk losing business.
• Clients, beware of too-good-to-be-true prices, they usually are. Look at the details, what you’re getting, compare to competitors and do your research. Many times, these teaser prices use some concocted industry language that looks like you’re getting a lot but delivers very little. A good professional SEO will talk to you about your SEO needs and come up with a custom project based on your needs and business and base their pricing on that information—rarely will you see pre-set project packages with an advertised fee. Remember that so much of the work depends on the size of and scope of your web presence and that varies too much for pre-packaged deals.

So, whether project-based pricing is right for your SEO project or not, I hope this pricing series is giving you an idea of the options available for pricing in SEO and the benefits and downfalls of each. Now that we’ve covered pay-for-performance, hourly consulting and project-based pricing, we’re moving on to profit sharing—an option with similarities to pay-for-performance but with even more security for the client. Make sure to check out next weeks profit sharing pricing model discussion to see if this could work for you.

As always, if you have comments, questions or input, please feel free to leave a comment!

Just like your quick trip to the store or search for a pen, not every SEO project is exactly what it seems to be in the planning phases. Unforeseen problems, additional work, changes and necessary testing and tweaking can make your simple project a little more complicated if you want to get things done right. Hourly consulting pricing for your SEO project can give SEOs the freedom to use their expertise to complete all the work necessary without complicating things with separate estimates, proposals and pricing for unforeseen work and small details. Clients, you will know when you get started that your pricing includes all of these little surprises; you’ll save time and resources, and devote less time and fewer resources to managing your SEO project.

What is hourly consulting pricing?

It’s just what it sounds like—a price per hour of work. These prices vary greatly based on a professional’s experience and type of work and can range anywhere from a low of $50.00 an hour to a high end of $500.00 or more. In my experience, a typical, well-qualified professional SEO firm or independent consultant will charge somewhere between $300.00 and $400.00 per hour.

Hourly consulting pricing seems simple, but it does require a little more work than simply naming a price. Clients need a little more certainty in pricing than just a project and an hourly price. In the planning phases, the SEO and client must agree not only on a price per hour, but also the specific items that need to be completed, an estimate of the hours required to finish those items, and a procedure for approval for additional hours over the estimate or a set number. Especially in this economy where every dollar needs to work harder, it’s important to clearly set maximum hours and respect arrangements for approving additional hours over your specified limit.

What does hourly consulting mean to SEOs?

This type of pricing offers flexibility and freedom to work when and how it’s best for you. Many SEOs feel that this allows them to take on more clients because it forces them to manage time well and assures that they are being paid for time they spend on a project—no more long nights handling unforeseen issues that you’re not being compensated for. And, hourly pricing does force you to truly evaluate what your time is worth—maybe you were undercharging on project basis because you never took stock of all the time spent on minor problems or additional requests from clients.

What does hourly consulting mean to SEO clients?

With a properly created hourly consulting arrangement, you don’t have to micro-manage a bunch of different projects involved in an overall SEO project. With hourly pricing, you can hire an SEO professional to handle website copy optimization, work on a blog, do local search optimization and even develop and optimize a blog—all in one agreement, no separate contracts and agreements to manage and monitor. All you need to do is agree on an hourly price, what work needs to be completed and agree on a maximum number of hours to complete the work. And, if somewhere along the way you decide you’d like to add something—maybe some social media work—you know what that will cost you and you don’t have to go through the process of another proposal and contract. The flexibility saves you time and resources and, by setting specifics such as maximum hours and communications requirements for additional hours, you still have the comfort of knowing your maximum investment.

The upside…

Hourly consulting pricing allows a project to grow and evolve easily, without going through the arduous process of new project proposals every time a client wants to expand or modify their SEO project. Hourly pricing works is a great way to handle additional work added to existing projects—whatever pricing structure you use for the original agreement, you can always use hourly to price add-ons and expansions. Hourly is most often used is tandem with other pricing structures to offer that additional flexibility, and you’ll find that both the client and SEO professionals will benefit from the flexibility and simplicity.

The downside…

Hourly pricing does require more than just setting a price, so details such as an estimate of hours required, maximum hours allowed, and approvals for additional hours are vital to any hourly consulting pricing agreement. Also, watch that you don’t scare away clients with an hourly price. If you’ve been using other pricing structures, moving to an hourly pricing structure can come with sticker shock—clients don’t, or can’t, calculate what they are paying per hour when they use a project based price structure or pay-for-performance. You’ll need to explain your hourly rates briefly, let clients know how you’ve arrived at that magic number, to show them that it’s an equitable price. Make sure you ease into this, use hourly pricing for add-ons at first and always give existing clients the option to remain with their traditional pricing structure.

What to remember if you use hourly consulting…

• SEOs, set your hourly consulting rate based on your past experience and work. Look at the projects you’ve done, what they required and what time you put into them. Use this to determine your hourly rate and make sure it fits with your experience and knowledge. You can use different rates for different work. For example, if you have more experience with blog development than copy writing, use different hourly rates for different work—just don’t over-complicate things.
• It’s not all about the price. Work out the details and make sure hourly consulting agreements are clear and include all the necessary details; price per hour, estimated hours for project, maximum hours, approval process for additional hourly charges above the set limits.
• As always, Clients need to be specific about the projects being done and the work going into it. You want to make sure your total hours estimate includes everything you think it does.
• For SEOs, your estimate is just that, an estimate. If you can work efficiently and finish in fewer hours, do it. You’d be amazed at how much credibility you will build with clients when they know you are under-promising and over-delivering. The word of mouth advertising will be great, too.
• Clients, don’t shop for the lowest hourly price. You may think you’re getting a deal but you’ll get what you pay for—less experience and more hours.

Whatever price structure you’re using, make sure you tune in next week when we look at project-based consulting pricing and how that works for SEOs and for Clients. And, if you have experience with any of these pricing structures, or know of others that work for you as a client or SEO, leave a comment and let me know!

If SEO was a like the many office and family NCAA pools, the ones who picked UNC to win would be like SEOs who achieved the results they promised to their clients as a condition of getting paid—you are all going home with money in your pockets because you achieved the desired result. Go you.

What is Pay-for-performance?

Pay-for-performance means literally that your clients will pay if/when a predetermined result is achieved or threshold is reached. Typically, a desired result is agreed upon as well as a time for performance and method of measurement. In terms of SEO, results that are typically used as a condition of payment are achieving a certain search rank for a term or terms, achieving a certain number of site visitors in a day, week or month, or a certain average time on site. Of course, there are many ways to quantify results for clients, therefore there are a whole lot of ways to condition a pay-for-performance situation.

What does pay-for-performance mean to SEOs?

For all the SEOs out there, pay-for-performance is a risky price structure unless you are careful to balance easily achievable results and a premium price that compensates for the risk. You have to be very confident that you can deliver according to the terms of your agreement or you go unpaid for hours of time and effort. Be specific in your agreements and make sure that both you and your client understand the terms and conditions.

What does pay-for-performance mean to SEO clients?

SEO clients, this is a good deal for you if you make sure to do your research. First, you need to be specific in your agreement. For instance, when someone promises to get you a number one search result in Google, make sure your agreement specifies how and by what means—or more importantly, what tactics and methods are not to be used. The same goes for any agreed result, specify tactics and strategies that can and cannot be used otherwise you could be paying for work that won’t do you any good, and could possibly hurt you.

The upside…

A great option in a bad economy. This offers clients the security of a guaranteed return on their investment. SEOs will benefit from pay-for-performance because you can work with clients that, otherwise, would not devote budget to SEO because of its uncertainty.

The downside…

For SEOs, you do all the work without the guarantee of payment. Contracts with lots of terms and conditions are complicated and can get messy, and this is especially hard to sort out when you are likely to have clients that don’t completely understand the intricacies of SEO and the online space. For SEO clients, you have to be careful and be specific with your pay-for-performance agreements. You want to make sure that you don’t just get results; you get results with work done according to SEO industry best practices.

What to remember if you use pay-for-performance…

• Be specific with your agreements—lay out timelines, methods and tactics to be used as well as the agreed upon results to be achieved. SEOs, make sure to include an agreement to have your client pay any anticipated expenses for the project (website work, copywriting, etc.) unless you are taking these costs on yourself.
• Get it in writing—there is a lot to these price structures and everyone will feel better if they have it all down in black and white.
• Remember that other factors will affect the results—other marketing tactics and promotions, online reputation and PR. Make sure that there’s a good line of communication and that your agreement accounts for outside influences that affect the feasibility of agreed results.
• Research your client or your SEO professional. This is an agreement that requires a certain level of trust because you want quality SEO work and you want a payment when all your work is done successfully. Find out who you’re working with through the local chamber of commerce, BBB, or through references and prior clients or contract service providers.

SEOs, now that the NCAA Tournament is all over and our evenings and weekends are freeing up a bit, take some time to look at how you work, your skills and experiences, and your potential clients, and see if a pay-for-performance price structure could work for you. For those of you looking to begin an SEO project, even if your pockets aren’t lined with Tar Heels winnings, you could still get started with SEO now and pay for results later.

If you would like to share your experiences with pay-for-performance agreements in SEO or have comments or questions, please drop a note below. And, tune in next week for “Hourly Consulting Pricing in SEO: Flexibility Comes at a Price.”

What’s the best way for you to pay for SEO?

Are you thinking of getting started with SEO now or looking to have outside SEO professionals take over your SEO? You may have already asked yourself this question. In today’s economy the “how” of paying for SEO is sometimes more of a deciding factor than the “how much.” Over the next few weeks, we’re going to break down the basics of the most common pricing structures of SEO, what they mean, and the benefits and detriments. And, we’ll take an honest look at which structure may be right for you if you’re getting started with SEO or looking to hire a professional SEO firm.

Here are the most popular price structures that we’ll cover:

• Pay for Performance /Ranking / Traffic—You pay for results, but you’re accountable for your work.
• Hourly Consulting—You’re paying for time, but what’s getting done?
• Project-Based Consulting—Up-front pricing but what are the long-term results?
• Profit Sharing—You pay when your customers pay, but is the price too high?
• Monthly Retainer—A long term price structure that lacks motivation.
• The Combo Platter—The most common, a create-your-own pricing structure that requires thorough understanding of all your options and what will work best for you now—and in the future.

For each pricing structure, we’ll cover what it means, the basic ups and downs, who it might work for, and what to watch out for—and if you have questions or comments, feel free to post them—I’d love to address as many as I can in additional posts! And, any SEO professionals out there please add to the list of pricing structures if you can so that we can help businesses understand how your pricing structure can work for them.

You know how SEO can work for you, now find out what SEO pricing structure works best for your business. Before you sign on the dotted line, make sure you’re getting not only the right price, but the right pricing structure for your business.

Make sure you check in next week the for the next post of this series, “Pay-for-Performance: SEO Pricing That Goes After Results.”