When you insert a dollar into a slot machine in Las Vegas, you could get back a very nice return on your investment (ROI). But, if you put a dollar into a vending machine, and get an unsatisfactory product, you have no guarantee to get your money back. Click on image to see the dollar disappear.
First, let me restate that I am in favor of all ethical, professional SEO's who provide you with proof of productive results (click-throughs that are "actions-traffic of good intent" or online sales) getting compensated fairly and well. In my opinion, just getting increased "clicks" or "hits", or "rankings" alone is not a good indicator of ROI or the quality of the SEO Consultant firm. Offline sales, on the other hand, should NOT be a factor in compensating an SEO, as he has no control over what happens offline after the initial online contact. That's called "Pay For Performance" (offline & online sales), and I believe that the SEO seller should not be held accountable for what does or doesn't happen offline, but the SEO buyer should be! But, I will write more about that in another post. For now, I want to address an SEO buyer compensating an SEO seller for their "knowledge" through hourly rates or "pricing packages". This is what I promised in my last post.
Jill Whalen did an article entitled "SEO/SEM Pricing Models" in July of 2005 that advised a new SEO that "The most important thing to understand is that there may not be any one pricing model that will be right for every client that you work with." I agree! She goes on to enumerate three kinds of SEO-SEM pricing that she uses, but leaves out the hourly rate and "Pay For Some Kind of Performance" model. The first is "One-Time Fee Pricing" which I call "pricing packages". Here is an example of one SEO's ("too brief" in my opinion) pricing package rate sheet (KEEP IN MIND THAT I AM NOT RECOMMENDING ANY SEO-SEM CONSULTANT FIRM IN ANY OF MY BLOG POSTS, AS I HAVE NEVER DONE BUSINESS WITH ANY OF THEM!). Jill then goes into a "Six-month Contract" and "1-year Contract" with probable options to renew on a "maintenance" basis, I'm sure.
I really like Jill's warning to prospective SEO buyers, who fall for a "twisted" guarantee, in that article: "if you stop paying one of these slick companies because you didn't get what you thought you were getting, THEY will sue YOU for breaking the contract! Some of the largest SEO companies in the world operate this way, so buyer beware!" "CAVEAT EMPTOR" always applies! Even if the pricing package enumerates more detail like this one, can the SEO buyer be sure that all will be done completely? Also, what does "New Potential Customers Guaranteed" really mean, if it is not clearly spelled out in writing? However, I do like the increased amount of "SEO specific responsibilities" enumerated, UP FRONT.
Now, for the hourly rate SEO compensation plans. This is how many Lawyers charge their clients, if they are not working on a contingency fee basis. One example of this is a Rhode Island SEO firm who says: "What is the question customers always need answered upfront, yet are rarely provided by our competitors without you searching, emailing or telephoning first... the PRICE!" I like that, because it is very true! However, with monthly-yearly contracts or "Pay For Some Kind of Performance", it is impossible to do until more details are discovered and agreed upon by both parties. Plus, an hourly rate doesn't tell you how much the TOTAL COST will be for your project! This SEO's hourly rates start at only $46.00, but I know that some other SEO's hourly rates start at hundreds of dollars per hour.
This last point sounds like I'm trying to create "FUD" in SEO buyers (NOT TRUE!), but between "Buyer Beware", and Danny Sullivan openly and honestly saying: "The biggest problem in my view remains the SEM industry's reputation. We have a bad one.", I came across this "The Gunderson effect of billable mania: Trends in overbilling and the effect of new wages" from 2001. Now please don't think that I am implying that ANY of the SEO firms who bill hourly are doing this, but how does an SEO client know for sure? The "Gunderson affect" says on page three: "This section examines whether these new higher salaries and the resulting increase in billable hours expectations have increased the pressure to overstate hours worked on matters billed to clients."
Talented SEO support staff for SEO firms, in-house SEO department's, and traditional advertising agencies is not only harder to find today (and it might get worse before it gets better), but they are being paid better (and they should be) these days. So, the potential for this to happen needs to be realistically evaluated by prospective SEO buyers paying by the hour, unless they make sure, somehow, that they constantly know what the SEO seller is doing. SEO sellers billing hourly need to have some way of proving " billable time spent" by themselves and their support staff, in my opinion (which is hard to do). Personally, I want to believe that most SEO sellers actually go the "other way", and work more hours than what they bill for. I have read in many forums where SEO's and SEM's have stated they do this to help ensure customer satisfaction, along with a better chance at a long term relationship. But, how is an SEO buyer to know for sure either way?
Animated image courtesy of www.artie.com.
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