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Let’s face it; for the uneducated or inexperienced buyer of SEO services, the market is a minefield.

Conflicting messages, confusing language and a saturated market, where anybody from web designers to PR agencies ‘provide’ SEO, combine to make the journey of researching and recruiting SEO expertise a pretty treacherous one.

One thing that certainly doesn’t help the buyer of SEO services is the massive disparity in what you can pay for a service that, on the face of it, looks the same, along with the myriad of weird and wonderful remuneration models on offer from freelancers, consultants and agencies.

With that in mind, I’m going to take a look at a number of SEO payment models that, for me, don’t come under nearly enough scrutiny and why, in my view, they just don’t work in the context of today’s search landscape.

Fixed fee, quoted up-front

If you run a number of ‘SEO’ related searches on Google, you are likely to see adverts quoting fixed fees or packages. Frankly, bronze, silver and gold packages make my skin crawl. They commoditise a service which should be anything but.

To use an analogy, quoting for SEO upfront, based on a fixed fee model, is the equivalent of a builder proposing a fixed price for an extension without having set foot on the property.

Yet this is how a huge number of SEOs price up and sell their offering…upfront, with little or no understanding of the buyer’s business, sector, products, competitive landscape, internal resource or offline marketing activity.

But perhaps the most important factor in quoting for SEO, which is so often overlooked, is an understanding of the buyer’s financial objectives.

In my view, there should be a correlation between these financial objectives and the SEO budget required to meet them. For example, if you are a business turning over half a million pounds per annum but you want to grow that to £5m within three years, there are three main variables you can influence in order to get there:

  • Acquiring new customers.
  • The frequency of which those new and existing customers buy from you.
  • How much they spend on each transaction.

To acquire the customers in the first place, you are going to need to generate a certain volume of traffic. It is not an overly difficult calculation to work out how much traffic based on current (and projected) conversion rates and average order values.

With that traffic figure in mind, a good SEO will work with you to identify potential keyword targets to drive that volume, the level of competitiveness for those terms and the strategy and tactics that will need to be adopted to improve your search engine (and wider digital) presence for those terms.

I’ve kept things intentionally simple but you can see how some pretty basic math can be applied to make a more explicit link between commercial objectives, the SEO strategy to meet those objectives and, in turn, the budget required.

This is a world away from buying fixed fee, ‘off the shelf’ SEO packages that take no account of the needs, and more specifically the commercial objectives, of a business.

Pay-on-performance (based on rankings)

Run some more ‘SEO’ searches on Google and you’ll also see a raft of adverts with messages, such as:

  • ‘guaranteed rankings’
  • ‘no placement, no fee’
  • ‘paid only on rankings’

On the face of it, this seems like a great proposition from a buyer’s perspective and I have no issue with pay-on-performance models, per se.

However, I do question the validity of rankings being used as the foundation for that model.

This is for two reasons:

Take another look at those search results in Google. The majority of ads talk about rankings as if they are the end goal, the Holy Grail. Rubbish. Rankings are just a means to an end.

They mean very little if the rankings are for irrelevant keywords in the first place or if your website fails to convert the traffic that those rankings deliver. Yet, rankings remain the dominant message when searching for ‘SEO’ in Google, which, by default, has conditioned far too many buyers to view rankings as the end goal when, quite simply, they are not.

But what makes these models really quite useless is the fact that due to various factors, for example whether a searcher is logged in to their Google account, their location, search history or the device they are using to search, results will be personalised to the individual in some way.

Therefore, how can you base a commercial model on a metric that so readily fluctuates and differs between searchers? In turn, who determines, with absolute clarity, the position a particular keyword has achieved, of which the entire remuneration model is based.

Pay-on-performance models of this kind are out of touch with today’s search engine algorithms and more importantly fail to focus on the metrics that really matter, such as traffic, conversion rates, sales and repeat business.

Pay-on-performance (based on sales)

First things first, I’m not dismissing sales or revenue based pay-on-performance models out of hand. We work with a number of our clients in this way.

Instead, I’ll keep this one brief by simply making the point that these models are credible only if the tools, technologies and processes are in place to accurately attribute sales back to the SEO campaign.

In retail for example, a multitude of channels might be used by a prospect to research, compare, consider and finally make their purchase. The journey might take place over a number of days, weeks or even months. Search is therefore just one of a number of touch points that can contribute towards a sale.

Therefore, a critical component of a sales based, pay-on-performance model is a tool that can track this kind of complex user-journey, along with properly executed attribution modelling. This ensures that the role SEO has played in generating sales is fairly rewarded (or, on the other hand, not rewarded).

In short, the buyer must ensure they are not paying the agency for sales that would have been generated with or without the input of the SEO (sales driven via brand terms, for example) or sales that were actually driven by another marketing activity.

Consider this before committing to a sales based payment model for SEO services.

Anything less than £200 per month

For the purposes of this article I wrestled for a while on where the minimum fee level for SEO should sit (knowing it would no doubt cause some healthy debate).

Frankly, it doesn’t matter so much. I am simply trying to illustrate the point that now, more than ever, you really need to question what you are getting for your money when buying SEO services, especially in light of Google’s Panda and Penguin updates (the search giant’s most aggressive and well-publicised attempts at cleaning up their search results).

As such, many of the ‘stack ‘em high, sell ‘em cheap’ SEO solutions (which may have worked in the past) are under greater scrutiny today than at any other time in the ten years I’ve been in search.

Churning out keyword stuffed articles, mass submitting to thousands of directories or buying links, are all techniques which put you at greater risk if you are caught adopting them. They are also the techniques that tend to be pushed hardest at the lower end of the market where fake solutions and ‘snake oil’ SEO thrives.

Today’s search engine listings contain rich media content, such as images and video, and are influenced by factors such as locality, personal preferences and recommendations from your social connections. As such, SEO is not the stand alone discipline it arguably once was.

Instead, SEO strategies need to be underpinned by creative and engaging content, whilst being supported by social media and online PR. In short, SEO requires expertise across a multitude of disciplines to be truly effective, as I talked about last time around.

Does that advert offering SEO services for £149.99 sound as it it’s going to buy you what you really need to win in your competitive space? I strongly doubt it.

This is not to say that those SEOs charging just a few hundred pounds are out to rip you off. Neither am I saying that the more you spend, the less likely you are to have your fingers burnt. Life is not quite that simple.

A little research before beginning your search for an SEO provider will go a long way. There are enough great resources out there offering sound advice on SEO strategy, what to look for and what to avoid, including Econsultancy (of course!), Clickz, Search Engine Watch and Search Engine Land, to name just a few.

A final bit of advice on this; avoid any email you receive with the words ‘SEO’, ‘rankings’, or ‘guarantee’ in the subject line. 99% of it will be spam or offering the kind of SEO solution you want to avoid. I know because I receive between 10 and 20 of these emails a day!

Conclusion

Since my first day in search, I have lived by the mantra ‘users first, search engine second’. In other words, anything you do to try and improve the visibility of your site in search results should also benefit the target audience.

Taking this theme further, I believe it is ‘experience’ that, in time, will separate the winners from the losers. Those businesses who deliver a superlative experience at every stage of the buying journey from awareness to advocacy will prosper. Those that don’t will fail. The role search plays in delivering that experience should not be underestimated.

With this in mind, I believe there is one question that a buyer of SEO services should ask themselves when considering an SEO proposition:

‘How will this approach or activity deliver a memorable & superior experience for my customers?’

Start with that question and you’ll be far less likely to buy SEO services that fail to meet your expectations.

Image courtesy of Jeremy Weate

Ben Potter

Published 3 October, 2012 by Ben Potter

Ben Potter is Commercial Director at Leapfrogg Digital Marketing and a contributor to Econsultancy. You can follow Ben on Twitter and Google+.

17 more posts from this author

Comments (31)

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David Quaid

Absolutely brilliant and spot on in every way

over 3 years ago

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Andrew Jones, Online Marketing Consultant at Maginus

Ben great post and couldn't agree more. Would you agree that this industry needs some form of regulation ?

over 3 years ago

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Amy Fowler

Agree completely that all these pricing structures are long outdated, and that anyone offering them should be avoided like the plague.

However, why do you think they still exist? Because companies want them. There are *so* many misinformed companies that either don't grasp, or don't want to grasp, that this sort of 'SEO' is the sort that they need to avoid.

They'll talk about being stung in the past and think that the solution to this is paying on results, or paying as little as possible so that if they get 'stung' again, the financial damage will be minimised.

They don't actually think about why someone's offering 'SEO' for cheap, or what the 'SEO' 'company' will do to ensure they get (temporary) results and the client pays.

Luckily, more and more companies seem to be wising up to this and are after real firms who do a proper job, and work with various budgets.

However we've along way to go until everyone knows this and until they do, these pricing structures will exist.

over 3 years ago

Ben Potter

Ben Potter, Commercial Director at LeapfroggSmall Business

Thank you for your comments guys. Andrew, yes I'd love to see some form of regulation. It's a debate that has been raging for years, probably because it such a complex issue.

over 3 years ago

Guy Redmond

Guy Redmond, Digital Marketing Engineer at Nestle

Good article @Ben, but I agree with @Amy, to a point..."we've along way to go until everyone knows this and until they do, these pricing structures will exist"

This is because, we are still seeing new blood entering into (digital) marketing roles and they are still on a learning curve, so may look at the commodity approach to SEO as a box ticking exercise to digital marketing strategy, without knowing how else to approach it.
PLUS the decision makes in some companies do not understand SEO (or marketing tactics) either, so again the commodity approach is an quick win...until they learn.

Sites like econsultancy and smart insights are very useful to marketeers, but often (IMHO) raise further questions (for newbies and sometimes experienced professionals), rather than answer them.
And other sites which rank SEO companies don't help either, just because you in the top 10 doesn't make you the best, especially when the ranking metric is how much they bill, without realising this included the PPC spend the client has to pay!

over 3 years ago

Ben Potter

Ben Potter, Commercial Director at LeapfroggSmall Business

Hi Guy, I totally agree with your points. The reason why agencies exist at the 'snake-oil' end of the market is because a demand exists for their services, albeit misguided demand.

It is ultimately up to the buyer to do their research but sadly many don't. The result is they waste time and money, whilst also building a negative perception of SEO and the industry in general.

I think this is very damaging to the sector as a whole and something I am very passionate about addressing.

over 3 years ago

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Depesh Mandalia, Head of Digital Marketing at Lost My Name

Hi Ben, a lot of sense there, wonder if there is a way econsultancy could pin articles like this when users search for SEO...

Completely agree with ‘users first, search engine second’ - it is however not always easy to focus on and even the best of SEOs can sometimes fall into the trap of neglecting this mantra.

Like any industry there will be those offering genuine service and those out to make easy money. Regardless of your experience as Guy referenced, you need to do the research first before deciding on who to use and accept full responsibility for it going wrong. There are more than enough reputable SEO sites out there to at least ask advice in forums and get decent feedback

over 3 years ago

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Alisa

This is a great article, I am constantly trying to tell people that are confused by SEO and the jargon associated that the promises they were given will be handled with black hat seo tactics.

Thanks! I will definitely send people this direction when trying to understand this issue further.

over 3 years ago

Graham Charlton

Graham Charlton, Editor in Chief at ClickZ Global

@Depesh, if I can find a way to get it there I will...

Funny how the UK's number one SEO companies have to buy PPC ads:

http://i.imgur.com/0Ty4D.png

over 3 years ago

Ben Potter

Ben Potter, Commercial Director at LeapfroggSmall Business

There is a certain sense of irony in that Graham!

over 3 years ago

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James Hunt

Very interesting article...although you didnt mention what model SEO's should use;

Fixed Fee - no
Results Based - no
Lead Gen Based - no
Low Cost - no

doesn't leave too many options.

As an SEO, I typically research the keywords the client wants to improve and put a fixed monthly price forwards that would enable me to commit the right amount of time to generate improvements.

What would you suggest as a better pricing model?

over 3 years ago

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Les Faber

Hi Ben:

I think your observations & comments are 100% accurate. There are some silly pricing models out there for sure.

Sadly, as in any industry, there are those that make empty promises... that, in turn, besmurch more credible members of the same industry.

As in any consultation, having a firm understanding of a potential client's business and associated objectives is key. How can you price optimization of something you have no understanding of? And like lemmings, they continue to flock to those who tell them "what they want to hear". I chuckle when I hear about a web property owner raving about "ranking number 1" for a useless keyword (It's what they wanted to hear I suppose).

Over the years we have found that the best SEO success comes with clients who are serious about search - those who understand that they need to work with you, and make a personal time investment. Those that realize it isn't a matter of flicking a switch (or calling your cousin at Google) in order to get better rankings.

In these days of colliding technologies and platforms, SEO has become an art & a science. How many times do we get a potential client who has taken the easy way, and is now paying dearly thanks to such eclectic creatures as Pandas & Penguins? Too many! Keeps us busy...

I pontificate....

Great research and excellent articulation of what I am sure is rolling around the brains of many a SEO! Thanks for taking the time to pull together your thoughts & opinions.

over 3 years ago

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Alexander Sandström

I agree with the previous comments pointing out that the reason these price models exists is due to demand. Everyone wants to simplify the sourcing process of any service or product they buy. A pricing agreement that is at least on the surface easy to understand is of course attractive.

Like with anything else this is about knowledge about what it is that your are actually buying. The less informed you are the more attractive these simplistic price models are. Not to say that anyone who buys SEO services according to these models are incompetent. I just mean that in organizations with great awareness of the complexity of Internet marketing and SEO the risk of falling into this trap is smaller.

As an example a potential client I talked to about their Internet marketing strategy had just signed a contract with an SEO agency. They went for an agency that first of all provided a fixed price. But what was worse was that their only selection criteria s price. Meaning they picked the cheapest possible fixed price SEO agency. As pointed out in the article price levels are not always aligned with service quality, so buying cheap is not necessarily an issue in it self. What is obviously an issue is if price is your only selection criteria.

Key take away: buying SEO services requires research and understanding of what you are actually buying, and more importantly how what you are buying will support your business objectives.

over 3 years ago

Andy Headington

Andy Headington, CEO at Adido LimitedSmall Business

Hi Ben,

(long time now see)

Great post. it's an area which gets bought up every now and again - esp the point about regulation and controls. Considering SEO is a multi million pound business you'd have thought that there would have been rules introduced by now.

I had to laugh at point #4 though as BT recently introudced a low, fixed fee SEO package for £74... http://www.websites.bt.com/online-marketing

Actually they have just removed this!! Perhaps they have seen sense. Still £50 a month for PPC optimisation isn't bad eh?

over 3 years ago

Ben Potter

Ben Potter, Commercial Director at LeapfroggSmall Business

Thank you for your further comments. Just responding to one or two of the points raised...

James; I am not dismissing all of the payment models in the way you suggest. We work on a flat fee basis with most of our clients. However, the fee is based on a wide range of factors, not least the commercial objectives of the client. As I make the point above, there needs to be a more direct link between commercial objectives and the budget required to meet them. Instead, I am questioning fees which are quoted upfront without context.

Neither I am dismissing performance based models out of hand, just some of the metrics of which some of these models are based i.e. rankings. With the right metrics (and tools in place to measure them accurately) pay on performance models absolutely have their place.

From my experience, the model that tends to work best is fixed fee with a performance element to it.

Andy; good to hear from you. It certainly doesn't help matters when a major and respected (arguable I suppose!) business such as BT is offering services at those kind of rates. But then they are a commodity king so no great surprise this is the model they have adopted.

There has been very little response from agencies using the payment models I question above. Care to join the debate and give your view?

over 3 years ago

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Jeremy

I agree totally with all your points Ben.

I work as an SEO for an agency that has expanded into offering our SEO services to new clients and have this headache deciding on how to price it.

I find most clients want the Pay Per Performance (based on rankings) but find myself trying to explain that
a) ranking for keywords does not necessary bring sales
b) the keywords they normally want do not have the traffic they think they do
So I try and base it on profitability by using PPC testing before optimising their site for these words. As we can continue the PPC campaign alongside the SEO if it's profitable.

Fortunately we are in a good enough position that we can pick our clients based on a good relationship of trust and be completely transparent with what we do.

over 3 years ago

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Sally Abdy, Director at Packaging DistributorSmall Business

As a modest buyer of SEO this is a very pertinent article and yes we currently use a 'platinum' offering which up until this year has served us well with good growth in organic conversions.

SEO providers need to give me clearly defined targets which are achievable but importantly must be prepared to work with us by understanding our market place and the goals of our Company. SEO is not an exact science, not least because we are all at the mercy of Google.

Your key point for me is '... approach or activity deliver a memorable & superior experience for your customers... and will be useful when sourcing our next SEO team.

over 3 years ago

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Jo

Excellent article.
I work for a digital marketing company myself and find it very frustrating when clients are presented with payment models that promise traffic that isn’t right for their business objectives.

The clever guarantees of ranking per search term, which are dismissed in terms and conditions, always make me smile.

Tailoring the service to get the right results that convert is surely the best model to approach. Ranking for a term today may not be suitable or a converting term in 12 months time, so why guarantee a business will be number one within a time period that may not be relevant or give the business any success!!

A clear frustration that any good digital marketing agency faces every day.

over 3 years ago

Toni Anicic

Toni Anicic, E-commerce Consultant at Inchoo d.o.o.

Ben, I couldn't agree more with your article.

The Gold, Silver, Bronze packages and similar always scream snake-oil to me. As well as per keyword payment and similar.

This is how we do it:

We have a meeting with the client to figure out his needs and estimate roughly how much time per month we'll need to spend on SEO consulting, research and reporting for him in order to generate improvements. Sometimes when it's a smaller project it might be just a few hours per month, sometimes we're talking days of work.

over 3 years ago

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Stacey Cavanagh

Love this post, Ben and really do agree with everything you said (though I would personally increase the minimum fee level, I think!)

"Frankly, bronze, silver and gold packages make my skin crawl"

I feel you pain. My own thoughts on such packages were made crystal clear in this parody: http://www.tecmark.co.uk/guaranteed-seo-infospamic

over 3 years ago

Ben Potter

Ben Potter, Commercial Director at LeapfroggSmall Business

Just in response yo uour point Clyde, I have never had a prospect not willing to provide financial details and objectives. If you explain why they are required (i.e. making the link between SEO strategy and commercial goals), generally the prospect will be more than open with their numbers (you might need an NDA though)

over 3 years ago

dan barker

dan barker, E-Business Consultant at Dan Barker

A nice, interesting post, Ben.

I think there are some caveats to the 'user first' stuff:

"Since my first day in search, I have lived by the mantra ‘users first, search engine second’."

Here are just 5 examples:

1. rel author
2. rel prev/next
3. hreflang
4. xml sitemaps
5. even 'basic' stuff like canonicalisation

Those kind of things crop up more regularly, along with other similar meta stuff for Twitter & Facebook meta tags.

While the user may benefit in the end from those, they're definitely all 'search engine first' rather than 'user first'.

dan

over 3 years ago

Ben Potter

Ben Potter, Commercial Director at LeapfroggSmall Business

Hey Dan,

Yes, I see your point in reference to these very specific technical aspects of SEO. In some cases though, Meta tags for example, you should still be looking to optimise for users over search engines(of course, the two are not mutually exclusive).

I suppose I am referring in the main to the more fundamental aspects of SEO that these days make the difference between success and failure, namely link building, content, online PR, social, etc

over 3 years ago

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Amy Fowler

@Graham Charlton - why do you assume that these agencies *have* to buy PPC ads?

Surely if these ads are offering a positive ROI then it's not really a case of having to, but simply a good marketing decision?

Why not have an ad if it's bringing in more money than it's costing you - even if you have lots of other successful ways to bring in money too?

For example, we've never made a cold call - pretty much all our new business comes either through our website or even more so, referrals from current clients. Yet we will be starting a PPC campaign in the near future. Though we far from *need* to use PPC.

over 3 years ago

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David Quaid

@Ben

RE: Regulation

As you rightly point out, this debate is raging for ages!

SEO, can be strategy first and then implementation second. You can't regulate strategy! While advertising is regulated - marketing consultancy isn't - and that's why you'd find it impossible to regulate SEO. It isn't one thing (although its quite often to see discussion around distilling it into what is / isn't).

<style:cynical> What's blackhat? The new Webmaster Guidelines are ridiculously funny - I think it's good that Google can have a laugh. Basically any link other than 'by accident' could be argued is 'unnatural' </cynical>

over 3 years ago

Graham Charlton

Graham Charlton, Editor in Chief at ClickZ Global

@Amy My point was, if they are the number one SEO agencies, as several claim, can they not get there naturally and show their skills?

over 3 years ago

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Lanajoseph@Multilingual SEO

I think the SEO companies mostly provide the information about their payment methods and the customer is the one who gets to chose. Eventually the customer would compare with other competitor prices.

over 3 years ago

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Adam Beaumont

Totally agree with all points made here. I am constantly getting cold calls from 'SEO experts' saying they can get me to the top of google for highly competitive keywords for less than £150 per month.
The worrying thing is, it must work as a tactic for sales otherwise they wouldn't do it.

over 3 years ago

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Jerry Okorie

Spot on!

over 3 years ago

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Back link watch

I think this is a unique article out of them which I have ever read so far I will suggest you to make your work more stylish as you are writing good. This is something i have never ever read.very detailed analysis.

about 3 years ago

John Courtney

John Courtney, CEO and Executive Chairman at Pay on Results SEO, Content Marketing, Social Media, Digital PR, PPC & CRO from Strategy Digital

How things have moved on since this blog was posted. £200 a month?! That might have been a bare minimum when we were talking directories and article marketing but now with content marketing, digital PR, outreach and blogger engagement most SME's need to pay at least £1000 a month and small SME's and start ups maybe half that.

Pay on rankings always was "fools gold" and now with personalised search a complete non-starter.

Pay on results on extra sales, more conversions or increased traffic are still valid models which we operate successfully, and are proud to do as it aligns the client and agency objectives. Where fees are linked to results, it creates the ultimate KPI.

over 1 year ago

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