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Pay-for-Performance: SEO Pricing That Goes After Results

April 7th, 2009 | | Pricing Models for SEO, SEO Management

First of all, to all those who followed the NCAA Tournament, filled out brackets and forked over your five dollars to the office pool, sorry you lost your money or respect…unless, that is, you had the knowledge and forethought to pick University of North Carolina! For that elite bunch, spend your winnings wisely.

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.”

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