Brokerblogger

SEO "Performance-Based Pricing" = "Pay For Performance" (Part XVI))

Relationships suffer when "something" is said or not said (click on cartoon to read easier).  SEO buyer and seller long term relationships can be affected accordingly.  I can not emphasize enough the need for O"HUG Communication (Open, Honest, Upfront, and Good = clear, conspicuous, comprehensive, and comprehended) from both parties.

"Part XV" in my current series left off with a few links to tips on avoiding the "wrong" SEO firm.  If a SEO prospective buyer does not educate himself enough, and does not have enough ethical empathy for the SEO seller, then he can be part or all of the problem in "upsetting" the relationship, especially if he has UNREALISTIC EXPECTATIONS.  The other real challenge for SEO prospects is finding the "right" SEO who keeps up with his work load (as noted in this SEW Forum thread on "Disturbing Trend or SEM Industry Growing Pain?").

Before moving on to more "details" of my "one suggestion", I should point out that there is NO guaranteed way of insuring that an SEO buyer is picking the "right" SEO seller. My "Considerations Of Buyers Of Search Marketing" goes into why even Search Marketing Industry Organizations don't help with this.  Kevin Ryan wrote on 11/30/05: "Search THIS: Stop the Abuse!" which near the end talks of the reasons for the shortcomings of industry organizations and then says: "As a result, calls to action are left unanswered. Refine your terms and conditions to expand liability for your actions. Help protect the interests of third parties (Search Marketing buyers) that bring you revenue by offering guarantees and make-goods. Don't hold your breath."  This, and so many other factors I've previously spoke of all lead to a need for a more sharing of upfront risk between SEO buyer and seller!

SEO "Performanc-Based Pricing" = "Pay For Performance" (Part XV)

Have you ever been clobbered by personal distractions?  The animated image shows, symbolically, what recently happened to me when you "click on it".  So, back now to the task at hand.

First, let me say that coming up with the "details" that are as specific as they can be in a "generalized" way, but still allow for flexibility and adaptability for actual real life situations is not easy.  It will surely solicit criticism which I welcome.  I just ask that the criticism be constructive with suggestions to improve.  Or, if you think I'm totally "blowing wind", then give me your specific reasons why you feel that way.  I feel it best that someone attempt this challenge rather than never have something published on the web.

As I've said before, the "Devil is in the Details" so, I believe that before you can get to the "details" you have to look at the "overview" of each unique situation from the SEO seller's perspective, and the SEO buyer's perspective.  Therefore, my first strong suggestion is for the SEO buyer to NOT try to get discount overall pricing by offering or taking "SEO - Pay For Some Kind of Performance".  Each SEO seller is entitled to charge whatever they want (whether you agree with their pricing or not - if NOT, find another SEO)! 

So, the starting point should be determining what the estimated hourly or package pricing would be, normally, for say a one year contract that includes estimated "maintenance" costs.  MAKE SURE THE OWNERSHIP OF THE SEO's WORK, AND THE SPECIFIC SERVICES INCLUDED ARE DEFINED IN THE SEO's WRITTEN PROPOSAL, AND THAT MATCHES THE FINAL CONTRACT!  As for knowing the "going market rate" prices, my best advice is to look at as many SEO's own web sites as possible that have "package pricing" with exactly what services are included in the package.  Also, get a range of hourly pricing knowledge doing the same.  Keep in mind that your "custom package" may be different depending upon what is needed to be done.  You should be upfront with three or four "finalists" for Request For Proposals, and tell them AHEAD OF TIME what you, in general, have in mind for their compensation BEFORE THEY DO THE PROPOSAL.  My other advice is to look for mid-range pricing as good SEO is NOT CHEAP, NEITHER SHOULD IT BE "AN ARM AND A LEG". 

Don't forget, SEO is getting more competitive, and a SEW Forum Moderator (Marcia) said this on 10/13/05: "I've personally seen two people who turned out to be DYNAMITE SEOs within six months from the time they were first clueless and asking newbie questions in forums. IMHO either of them has many old-timers beat by a mile."  Of course, the challenge is recognizing that good "freshmen" talent, if you're not in the business.

SEO "Performance-Based Pricing" = "Pay For Performance" (Part XIV)

My "SEO - Pay For Some Kind of Performance" suggestion has to do with some kind of "conversion" on the SEO buyer's web site.  While PPC concerns online traffic, I believe that too much of that traffic is NOT "Traffic of Good Intent".  Besides the problem of "Click Fraud", I've noticed in my own online searching (see also "The Search Engine Relevancy Challenge") that many of the resultant listings (paid or organic) on the first SERP are not relevant to what I'm searching for at that time.  Until the search engines can figure out how to "read my mind" by knowing the "intent" of my personal search at that time, "relevancy" will remain the "Holy Grail".

Therefore, a "click" is more like an "impression" to me, because until the searcher takes some kind of action, the good "intent" of wanting to research or buy something online or offline has NOT been proved.  Even an "online action" taken by the searcher does not prove "beyond a shawdow of a doubt" that the intent is good unless it is an online sale, but it is better than only a "click", and stands a better chance of the searcher being somewhere in the "buying cycle".

I've already explained in my post entitled "iProspect's 'Outsourced SEO & ROI Study'" why I firmly believe that SEO Consultants should not have their remuneration based on offline sales.  However, SEO buyers should be held accountable for offline sales for their company's sake, and the sake of the long term health of the SEO buyer-seller relationship.  SEO sellers should be able to offer advice to their clients in "tweaking" the web site to try to help with faster offline sales through more precise, upfront, online buyer education.  They may even suggest using the new technology of "Ad-iD" where possible.  Online sales, however, is another story.

SEO "Performance-Based Pricing" = "Pay For Performance" (Part XIII)

I've used this "devil" before (click on image to see him "beckoning").  Now, I am using him to make the point that the "The Devil is in the Details!" with many situations in this world, including "SEO - Pay For Some Kind of Performance".

I've linked, once before, to this post by "Shoko" in the Search Engine Watch Forum thread called "What's The Best Way To Price SEO?.  While I'm not recommending, or "not recommending", any SEO since I've never contracted with one, Shoko went into more details about his perception and opinions concerning what he calls SEO "pricing on Cost Per Performance" than what I've seen previously in forums, articles, and blogs.  I'm not about to judge the particular SEO by what he says from his SEO's standpoint, I only want to "balance out" the perspective from a more autonomous, intermediary's standpoint.  He is certainly entitled to his opinions, many of which are very valid, in my opinion.  So, here goes.

SEO "Performance-Based Pricing" = "Pay For Performance" (Part XII)

In 1988, Michael Douglas performed in "Wall Street" where he said: "The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit..."  This text is from "Greatest Film Misquotes (part 2) which demonstrates how people (including myself) can sometimes mislead other people by misquoting and  misusing a keyword like "GREED".  Most people just misquote: "Greed is Good", period.

If "SEO - Pay For Some Kind of Performance" is going to be a "win-win" scenario, both buyer and seller must resist  the negative, adjective keywords associated with the definition of "greed" ("excessive", "reprehensible", and "insatiable").  I say "buyer" also, because buyers can want too low a price, or may say to the SEO seller: "Just get me top rankings, no matter how you do it!)

I try my best not to judge other people (only their actions, when appropriate), so in pointing out this entire SEW Forum thread on "What's The Best Way To Price SEO?" my main goal, right now, is to show how it is possible for "offenses" to be taken (I wish people, in general, would not take offense so easily!) by both buyers and sellers of SEO when "generalizations" have to be used, and the keyword "greed" is used "for lack of a better word".  Here's what I mean.

DFW SEM Assoc. 1/16/06 Meeting

There was a big "WELCOME SIGN" (click to see it move) last night at the Grand Hotel in Dallas, Tx.  The DFW SEM Association had their monthly meeting for January.

I've always stressed that in order for the Search Marketing Industry to grow, it must deal with the challenging issues of "education" and "credibility".  So, the reason I've tagged this post under "General Broker Philosophy" is because of the  "'critiques' to Webmasters and site owners" that were graciously done for some of the guests. Another reason is that one guest there admitted to having contracted out to a SEO Consultant (not one that belongs to the DFW SEM Assoc.), and said he got no results for about a couple of thousand dollars he invested.  This "client word of mouth bad experience" reinforces the need to address possibly both the "credibility" and "educational" challenges (without knowing all the details it is hard to know exactly what did happen).

SEO "Performance-Based Pricing" = "Pay For Performance" (Part XI)

While recovering from my virus, I saw Sumner Redstone on TV's Sundance Channel saying "The only good deal is when both sides win."  He should know what works best in growing businesses for the long term!

I also found this 12/29/05 to 1/12/06 Search Engine Watch Forum topic on "What's The Best Way To Price SEO?. It is a perfect segway from the end of "Part X" of my current series of blog posts where I said "I'm hoping that this kind of proof will, at least, partially break down the fear, uncertainty, and doubt about this concept (SEO - Pay For Some Kind of Performance), and create an atmosphere of 'open-mindedness'." 

The "perfect segway" reason is demonstrated by this SEO forum poster who brings up legitimate concerns that need to be addressed by the prospective SEO client.  Evidently, in many cases, the lack of education and empathy on the part of many SEO buyers causes many SEO Consultants to feel like it is an adversarial "us against them" relationship, rather than a "we need to be on the "same side'" more constructive attitude.  Let's look at some of the advice within this SEW Forum topic.

"Anti-Virus" Measures

I have caught a virus, and I am taking "anti-virus" measures.  Is this another way bloggers relate to their computers?

My currents series of blog posts on SEO "Pay For Some Kind of Performance" remuneration is too important to try to do when you can't think straight!  STAY WELL!

I like these two quotes: 

1. Robert Orben - "Quit worrying about your health. It'll go away."                

2. Johnny Carson - "Never continue in a job you don't enjoy. If you're happy in what you're doing, you'll like yourself, you'll have inner peace. And if you have that, along with physical health, you will have had more success than you could possibly have imagined."

Quotes coutesy of The Quotations Page at www.quotationspage.com.

Animated image courtesy of www.artie.com.

SEO "Performance-Based Pricing" = "Pay For Performance" (Part X)

My last post explored the "caveats" of doing SEO "Payment By Results" as analogized with the 100 year old "Institute of Communications and Advertising" advice for traditional ad agencies.

This "FusionBrand" blog did a post last year on "Hottest Branding Trends for 2005" (I hope they do an update).  The very first trend was "Performance-based compensation" for ad agencies.  But, after explaining what it is, and saying there is resistance to it from ad agencies, the reasons for the resistance are what I find interesting.  First point: "what if the client can’t deliver what is promised" = This, I think, either means client cooperation in offline sales completion & tracking follow through, financial follow through, or ad agency suggestion acceptance and implementation. 

My "one suggestion"  for the Search Marketing Industry INVOLVES NO COMPENSATION METRIC FOR OFFLINE SALES.  Most business arrangements have to have financial follow through, and as for reasonable "free range" to implement necessary optimization web site changes, this is a must unless the SEO wants to (all of a sudden) drastically change the branding message or overall corporate direction of the company in making those web site changes.

The second point of resistance is "because of the difficulties in measurement".  This is not an insurmountable problem with tracking only "online actions" that are Key Performance Indicators vs. offline sales or things like "branding intangibles" based on customer attitudes. 

Let's go back to Benson Shapiro's Is Performance-Based Pricing the Right Price for You? for some specific suggestions in working with this form of compensation.

SEO "Performance-Based Pricing" = "Pay For Performance" (Part IX)

If you click on the "virtual reality" image you will see the player looking all over.  This is what SEO buyers and sellers have to do well, if they want to examine the value proposition of all metrics that are used to determine compensation in "Performance-Based Pricing = "Pay For Some Kind of Performance". 

They have to examine in "virtual reality" what each "action" is worth in relationship to their current "closing ratios" for each separate action (like basic clicked on "e-mail link" contacts using the prospect's e-mail service, requests for buying information, questionnaire forms filled out and sent using the SEO buyer's web site to send it , surveys filled out and sent, registration forms, newsletter sign-ups, "downloads" of various kinds,  free or paid subscription sign-ups, different kinds and amounts of online purchases, "live chat" contacts, and even "dedicated to the newly optimized web site" lead tracking, toll free phone & fax number contacts, as tracked by the call detail reports).  But even with these more accountable metrics, caution must be exercised in using this remuneration approach.

These accountable metrics are, however, all Key Performance Indicators or "KPI's" vs. the actual performance of the offline sale, the overall performance of the actual agency, or branding issues like traditional ad agencies have to deal with .  INDICATORS (ACTIONS) KEEP THINGS SIMPLE ("KISS"). THEY CAN BE EASILY TRACKED THROUGH WEB ANALYTICS SOFTWARE OR "CALL DETAIL REPORTS" FOR PHONE, FAX, OR "LIVE CHAT" RECORDS.  MOST EVERY WEB SITE HAS SOME KIND OF "KPI'S".  IF NOT, THEN IT IS ANOTHER SITUATION TO ELIMINATE "PERFORMANCE-BASE PRICING" = "PAY FOR SOME KIND OF PERFORMANCE"! 

Traditional ad agencies, though, are even encouraged by their national association in Canada to try to work out "Payment By Results" relationships with their clients!  Here's what I mean.