Feature Article (Pub: Oct 07) Should an SEO quote be "performance - based"? by Paul Rudman

I have often been asked by potential clients: "Will your company work on the basis that if what you do doesn't work, we don't pay you?". This request has been a common occurrence recently, and I believe there are two reasons for this:

  1. More people are becoming aware of SEO and the need for it
  2. There are an increasing number of cowboys in the industry taking advantage of the current boom, which in turn is producing more clients who've had a bad experience they aren't looking to repeat.

So the question is, does natural SEO work as a 'paid-performance' model, or should the optimisation company stick to the traditional model of billing a client based on the volume of work necessary to achieve results? Below I've outlined the various issues involved, as there is no clear-cut answer to this.

Argument for Paid-Performance

Any SEO expert worth their salt should be happy to put their reputation on the line
If they didn't believe they could deliver results, then surely this means the expert never believed they could get good results in the first place. Just billing a client for work done could be seen as a betrayal of trust with the client.
Potential profit margins
Profit margins for the SEO expert should be exponentially higher in a paid-performance model than in a time-billed one, as the point of natural SEO is that it is an excellent return on investment model: There is no "cost-per-click" unlike in PPC marketing, and there are many different search engines that can drive traffic, rather than just the one you subscribe to with PPC.
You get what you pay for
If you were asking for a new driveway to be built on your family home, you'd pay the builder £5000 once he'd built your driveway right? You certainly wouldn't pay him if he said he could build you the best driveway in the world, sat around for a few days and either never completed the work or built something of a very poor standard. You should pay for the result and not for the level of effort required to achieve the result.

Argument for Up-front Project Costs

The complexities of defining performance
The paid-performance model can be incredibly complex when ensuring a fair deal: if the model is conversion-based, then you need a sophisticated web statistics package that can track user behaviour; from which search engine the traffic came from and what phrases they typed in (to make sure it is a new phrase and not a phrase you were already getting traffic from), through to completion (i.e. buying a product). You also have to make sure there is no bleed from other forms of contact. For example, if I can buy your product by calling the phone number on the site, but I entered through a search engine, then the SEO misses out but the client doesn't. You also have to ensure the deal has sufficient duration, as natural optimisation is a long-term initiative, and an SEO would not get income for benefits the client would see for the next 1-2 years.
Paying for expertise
An SEO is like every other profession that is built on transfer of a skill or application of knowledge - in trying to make sense of search engine optimisation, a lot of clients have misguided opinions on what the industry is all about. For example, you'd expect a teacher to do a great job in getting your child through their exams, but they wouldn't get pay docked if your child failed to get a good grade. The employee is well-trained, works with the best tools at their disposal and gives 100% commitment to achieve a goal; this is what they get paid for.
Web marketing is a two-way street
My job is search engines, and I'm great at it - but are you great at selling on the web? The SEO has no control over the look and feel of the site, over the prominence and clarity of the call to action buttons and symbols, of the reliability of the site hosting, of the quality and price of the products, or even of the usability of the website. There are so many factors that can turn a potential customer off from making a purchase, so why would we as experts agree to work on a pay-for-conversion basis when all we can do is deliver the traffic in the first place?
No-one controls the search engines
Search engines are fiercely independent, and value the integrity of their search indexes above all else. They want the most relevant results to return top to keep their users happy. An SEO's job is to manipulate the search listings to make their clients rank top, regardless of how important or influential they are. As a result, SEO is a best-guess industry, and always has been. We use our experience, expertise, and on-going research to continually try to outfox the engines, while they continually try to make it difficult for us to achieve our end goals. Should I be expected to work on a pay for performance model when I do not control the search engines? After all, when you pay for a full-page ad in a magazine you don't pay for what you make out of it do you? The most common pay-per-click marketing model is a flat percentage of your monthly spend - that's not performance based is it?
The clients role in optimisation and maintenance

I think there is a growing expectation that an optimisation company can apply many different principles and hey presto, high rankings and lots of traffic has been achieved. This isn't the case: Yes, we can ensure correct technical building; and yes, we can focus the text on the correct words and phrases, but can we make the content interesting and unique? No. Can we provide really useful guides and online tools for users? Again, no. Getting good listings is an inevitable by-product of having interesting and unique content, this comes in the form of genuine interest from other web users, who will link to and shout about something they like or they love. Websites also need feeding and watering like anything else, so should the SEO be making daily or weekly updates on the website? Don't make the mistake in thinking that good search engine rankings is ever something you can 100% offload to someone else - SEO is about applying best practice principles to achieve the best results, it's not about running your website 24 hours a day. The role of the client is huge in achieving good results, and if we can't control client involvement how can we work on a paid for performance model?

In addition, if I don't have full control how can I guarantee results? Many website owners have their own web teams and full control over the content added to the website. When an optimisation experts provides is recommendations to achieve the best results, what happens if 40% of them are not implemented by the client? The work the SEO did is exactly the same as if they were making the changes directly to the website, so they've done all the work, but the results won't be as good if all they recommend is not made live.

So which argument is right?

More and more potential clients are requesting a paid-performance model to minimise their risks, usually based on bad experiences with other SEO companies. We've made a rod for our own back in this sector by tolerating shoddy workmanship and not having a regulatory body. Another issue is that it's hard to assign a dollar or pound value to SEO work. One client may be paying £200,000 per year for their SEO, another client may be paying £100 per month for SEO. Is it any wonder than it's confusing from the outside, and a results-driven model is so much more appealing? After all, you're not going to feel comfortable paying for a service you don't understand that can often feel like someone is pulling out a number for a quote, based on the value of the car you pulled up to the meeting in.

My own personal opinion is the following:

Potential customers:
Do more research yourself, understand the industry and what an SEO company should be doing. Make sure all quotes and work is transparent, so everything is explained and you know what level of work you're getting for your money. Wherever possible, work on a referral from a friend or colleague who's had success with an SEO company and would happily recommend them. Ignorance is no excuse, and in a lot of instances it's the client's lack of understanding which in itself has lead to someone else taking advantage of them.
The beauty of the Internet is also its curse
The Internet allows anyone to say or do pretty much what they want within reason. It is exactly this freedom which has led to a position of lawlessness amongst the service providers whose business is dependent on it. How could the US government regulate a UK SEO company? How could a UK-based client ever report an SEO company in India who ripped them off? I am not making any inference on SEO services being great in one country and poor in another, just providing an example of how geographical and political boundaries are blurred on Internet services. Perhaps one day there will be an organisation or governing body like Corgi for gas engineers, where at the very least, potential clients can visit a site and see companies whose on-going reputation keeps them on that trusted list. It's a starting point anyway.
Paid for performance can work!
The model can work, but beware of the risks and problems in both setting it up and running it. As a client you'll need to give the SEO company a lot more control and responsibility if you work to this model. Bear that in mind, because while enhancing the site for search engines, the ball could be dropped on the user experience. A change for the better in one aspect, could be a change for the worst in another.

However the relationship between the client and the SEO company works, the key is that the optimiser works hard to achieve the best results for the client, regardless of profit margins or any other financial motivations. Always trust your judgement on the integrity of the supplier, as this is usually a good sign that someone takes passion and pride in their work, and is something that transcends industries. So if you understand the person doing your work, you are on far safer ground than trying to second guess their industry and previous track record.


Paul Rudman is the director and head of optimisation at CommerceTuned, he's been involved in developing search strategies and search engine optimisation for 7 years.

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