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

Is the dog on the right a short term "transactional buyer" or a long term "relationship buyer"? (click to enlarge photo)  Please forgive the "dog" analogy here, but I couldn't resist using this Long Beach, N.Y. photo taken in front of my old apartment building, right on the beach (a great 4 years of my life - 23 years old to 27!).

This Cre8asiteforums.com post talks about the theme of "customer differentiation" as it relates to SEO services selling.  My opinion is that the dog on the right is NOT seeking a long term relationship.  Value driven and ethical SEO sellers and buyers SHOULD BOTH be looking for long term relationships! 

Why?  Because, I agree with Stoney deGeyter's 2/6/06 article "New Algorithm Measures Require New Means For Optimization" when he says: "Today’s SEO is vastly different than that of yesterday."  He later says: "Experienced SEOs are finding that many sites can take six months or more just to see any kind of ranking improvement. This makes it increasingly difficult to differentiate from those who can improve your rankings and those who only say they can."  Rankings do help with performance, but there are other things like "user friendly navigation", etc. that help with the more important "conversion rate" (visits to actions to sales). 

As Ben Shapiro says in "Is Performance-Based Pricing the Right Price for You?", "The parties are forced to deal with one another's limitations, objectives, and trade-offs.  The very process of discussing, in precise detail and with great discipline, these issues develops "wide-band width" communication between buyer and seller. Each has the opportunity to precisely present its objectives, and to explain its own issues."  This initial and ongoing communication results in a potential build up of TRUST and CREDIBILITY, that goes beyond the first six month's "honeymoon period", and can translate into a long term, "win-win" situation when the "match" is right.

I almost closed out this series of blog posts until I saw this Cre8asiteforums.com Thread on "Protection from Unscrupulous Prospects, Avoid getting ripped off by 'customers'".  It would not be "fair and balanced" of me to omit this SEO topic from this series, so here goes.

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

Wouldn't you want to do a "Reference Check" on this Vought F4U-5N "Corsair" (Performance-Fighter) WWII aircraft (at MCAS, Miramar, Ca. = "Top Gun")  before you flew in it? (click to enlarge photo)  The same thing goes for choosing a SEO Agency Consultant firm as a long term partner.

This "Best Practice in Agency Search & Selection" Report by Salk & Reynolds Management Consultants (Prepared for the Institute of Communications and Advertising - "ICA") was directed at traditional ad agencies.  I feel it can easily be adapted to SEO firms-agencies and their prospective clients.  Therefore, I will take the liberty of inserting the appropriate keywords in "parentheses" in place of what is in the report.

To start, it says: "No (SEO) agency search is complete without reference checking.  It maintains honesty in the process.  It will identify issues and problems and also confirm, or deny, the subjective opinions and interpretations of the (SEO buyer)."  It then goes on to say: "Which (SEO clients or former clients) should you choose?  Consider asking the (prospective SEO firm-agency) for a list of client companies that are similar to your own - think particularly of size, complexity and similarity of service model or (online search user) relationship.  You may want to broaden this reference list with (clients) chosen at random from the (prospective SEO agency's total list) of clients, or check with a recently departed (former client) if one seems particularly appropriate.  This latter needs to be treated with care as there is usually two sides to every story.  In any case, the (prospective SEO agency) needs to be advised in advance as to which (clients or former clients) will be asked to provide references, so that they can be notified by the (prospective SEO agency) to expect your call."

It goes on to give more great advice such as:

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

If you feel you have to "spread your wings", and start an "exit" while you appear to be "walking on water" like this colorful duck is doing (click to enlarge photo) at Lake Mead Marina near Las Vegas, Nevada, then you need an "exit clause" in your SEO "Pay For Some Kind of Performance (Actions)" service contract.

This should be done upfront, when the initial contract begins, and should be needed only in case the contract is terminated before the full term of the contract.  Otherwise, everything else should be covered, and either party should be free to "go their way" with no obligations other than an explanation (preferably in writing).  It also should be fair to both parties, based upon the circumstances (the real reasons for early "termination of relationship"), and the timing of the "exit" by either party (how much work and results were accomplished by then).

That said, I want to communicate my opinion of how any seller of services should look at "entering into" and "exiting from" any relationship (contractual or otherwise).  My opinion is that I've always wanted my services to financially benefit my employer, independent contractor licensor, or client MORE than I do from the relationship.  Even if it is A LOT MORE, that's OK, as I always have the option of not giving the benefit of my services for the agreed upon remuneration to begin with.  I can also confidently ask for more compensation once my proof of performance is there, if I feel I'm underpaid.  That "giving attitude" has paid off, big time, in the long run for me my entire life.  Because, what I have given, has come back to me many times over in direct or indirect ways.  Yes, in a few instances, my, almost life long, straight commission, performance-based pay resulted in me "loosing the battle" (like when my client didn't pay the bill, or backed out of the deal somehow), but overall, I "won the war".

The buyer of services has an obligation to be cooperative, and communicative, and to not try to take unfair advantage of the seller in any way (especially when it comes to paying the agreed upon compensation for services well executed).

So, let's get to some things (not all) that can be in an "exit clause" for my "one suggestion" relating to SEO "Performance-based Pricing" remuneration.

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

This tour guide at Stingray City, Grand Cayman, is using "wet analytics" to see how friendly this stingray can be (click to enlarge photo).  "Performance" of any kind needs to be analyzed and rewarded (squid was previously fed by hand to this stingray).

With any kind of Internet "Performance-based Pricing" compensation model, good Web Analytics Software is crucial in analyzing and rewarding.  In fact, it is so crucial that I will provide links to some good information I've found about it - (Please remember that I can not recommend any SEO firm or sophisticated web analytics software without personal experience with them).  I've only used the upgraded version of SiteMeter, which is great for my blogging purposes, but not good, in my opinion, for "SEO Performance-based Pricing" tracking-remuneration).

So, to segway into this topic from my last post: "Part XIX", I need to point out that if my "formula to relate payment price for each exact kind of action to performance outcomes" would always work out to a "one size fits all", "Price per Action" for all SEO services, it would make everything a lot easier to figure out pricing and ROI. 

That said, Jim Hedger's 1/6/06 blog post: "Searching For Cost Savings" does provide some insight into how low SEO pricing can be (depending on many variables) compared to some other forms of marketing: "U.S. Bancorp's Piper Jaffray has estimated the average cost to acquire a new customer is:  Search Engine Optimization - $8.50 per new customer." & "Piper Jaffray also reported on the costs associated with lead generation:  Search Engine Optimization - $0.29/lead." 

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

"Time Flies" like this seaplane did right past my excursion boat in Vancouver, BC harbor (click to enlarge photo).  My personal distractions still abound, so while I can, let's get back to finishing my "one suggestion" to help the Search Marketing Industry grow.

I'm trying to help both SEO and the Search Engine Advertising part of SEM, or as it's called,  "Paid Placement", but not "Paid Inclusion", as it has the potential for at least the appearance of favoritism in the ranking of listings in SERP's.  However, SEO needs more help as noted in Stoney deGeyter's "SEO Accounts for Only 11% of SEM Spending" (Please note - I do not recommend any specific SEO firm only because I have not directly worked with them.  Only clients and former clients should recommend specific SEO-SEM firms, in my opinion.)

Now to continue where I left off in Part XVIII of this series.

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

Great "distractions" like the ones in this photo (12/26/05 near La Jolla, Ca. - click to enlarge photo) can be entertaining.  Others follow this quote by Bruce Sterling:  "One of the points about distractions is that everything that they do is destabilizing."  So, let me get "re-stabilized" now, even if it's temporary.

I ended Part XVII of this series with "..finding that "right match" is worth the effort."  For SEO "Pay For Some Kind of Performance", it is especially true to have the "right" seller for the "right" buyer, and vice versa!   

It is so important, that the SEO buyer might consider paying an agreed upon amount for a detailed, formal, written proposal that provides a lot of general information about the SEO's plan, which, in turn, says something about the consultant and his firm.  Yet, the SEO consultant does not want to give away the exact specifics of his techniques and processes, so don't ask for too many details except in the link building part of the Request For Proposal.  Even there, don't ask for names of their sources, just how they will get inbound links.  Also, don't demand the names of their clients, except with client permission.  Don't expect to get an exact match to your web site situation as each is unique.  Don't ask for specific results of other clients.  Do ask if they have ever been compensated based on "conversion actions", but not offline sales.  Do ask to speak to as many clients and former clients (permission given 1st) as possible.   SEO buyers should also be aware of "Proposal Kit" software (for under $200) that some SEO firms use to produce many "boiler plate" proposals. 

Proposal costs, if any, should be based on the number of hours it takes to produce a custom one, and how much custom research goes into it.  If the SEO firm doesn't want (or "like") to do one for any reason, they may be a good firm and too busy, or feel they divulge too much proprietary info.  Then, it would probably be better to "move on" to another SEO anyway.  There has to be a certain amount of TRUST and COOPERATION on both sides of the buying equation for a true partnership to work.  SEO buyer's, on the other hand, should not expect to get the amount and kind of information that would enable them to start their own "in-house" search marketing division.  Remember, the goal here is an ethical, long term "win-win" result based on Performance-Based reward compensation.

Referrals from SEO's can be good or not, but the best referrals come from objective clients and former clients that don't have a vested interest in giving a biased positive review.  Your job as an SEO buyer (OR SELLER) is to look for the perceived "negatives" (if any, and how serious), as the "positives" are easy to come by. 

I have also come up with some links to information that I like in regards to the selection process from both the buyer and seller perspectives.  The first is "How to Hire an SEO" in which the author says: "Can they handle competitive keywords? They should be honest about this. If your top keyword is very competitive, they may refuse the job altogether or suggest you target alternative terms. If they don’t suggest this or even address the issue of keyword competitiveness, run the other way."  The author also talks about what needs to be included in an SEO contract.  I like her comment: "I am acting as an independent consultant for a client who is in the process of selecting an SEO) and I’m amazed at what’s not included."   She goes on to explain how vague the term "link building" can be.  This other author and article gives even more detail.

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

Sometimes people are so close to "trees", or "concepts", or "beliefs", that they "CAN'T SEE THE FOREST THROUGH THE TREES" (click on photo for a larger view).  While this can happen in any industry or endeavor, it has happened to me with my use of "ITALIC TYPE" in this blog.  Some helpful people in the SEM community, recently, "constructively criticized" my use of it, along with my overuse of "colors" in my blog type.  So, I tend to agree now that it has been brought to my attention, and increased my awareness of the "forest".  I only hope that some members of the SEM community realize the possibility that for certain aspects of their business, as "insiders", they may be so close to the "trees" that it is hard to see the "forest".  The same could be said for SEO buyers with their "accustomed" view of what marketing they think works best in their industry. I'd get too much "off topic" if I went into more detail on this now.  Future posts of mine will explain. 

I've been waiting (to no avail) for some specific input from confidential SEO Consultant sources on the details of their (or other SEO's) version of SEO "Pay For Performance" to do this next post in my "one suggestion" to help the Search Marketing Industry grow (HEALTHILY = improve Industry Reputation) series.  As I've said before, it appears to me (I may be wrong) that most of the people doing it now don't want many other SEO's knowing too many of the "details" of how it is done from a competitive perspective.  I can't blame them, as most of the ones I've read have gone on record saying that they make more money in the long run, and have less turnover of clients with it. 

However, the "Devil is in the Details", so I'm hoping to eventually come up with my own workable "Pay For Some Kind of Performance" ("Pay For Actions") concept that is "fair & balanced" to both SEO buyer and seller, especially if I get "constructive suggestions" to improve my initial concept from SEO sellers and buyers.  This next benefit to the SEO seller and buyer should make good, common, business sense.