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."
I could not find the research that produced Piper Jaffray's "$0.29/lead" - potential "Pay Per Lead" (action) scenario, but it is a mute point since a SEO firm would need to produce a lot of those low priced "leads-actions" in the first year in order to cover their regular one year pricing. It is possible, though, depending on the product-service sold. However, in order to figure out the benchmarked amounts of actions currently achieved, and to determine the number of "increased actions" for each exact kind of action, we need to get back to learning about Web Analytics Software.
First, this article by Scottie Claiborne: "What's the Score? Basic Web Analytic Terminology" gives some good, basic definitions of the semantics involved. Then this article by Gunjan Bagla: "Analyzing Web Analytics" gives some good "advice on how to determine your needs and find your partners". Please remember, though, that TWO DIFFERENT WEB ANALYTICS PROGRAMS SHOULD BE USED AT THE SAME TIME TO INSURE NO "DOWN TIME" IN CALCULATING THE SEO FIRM'S COMPENSATION.
Having two different programs also helps to compare the "conversion to action" results of both programs to see if there is any difference in both sets of conversion results. If so, you need to figure out why, and provide a solution to that challenge, even if it means getting another web analytics software program involved. This "Best Practices for Accurate Web Analytics" pdf file by WebTrends talks (on page 2) about "Inaccurate Conversion Metrics" in determining the conversion rate of "actions taken" vs. "new or repeat visitors". While my "one suggestion" is not directly concerned with "visitors", but only "actions", you may want to assign a higher "quality value" metric score based on the same, one, online visitor who has repeated actions on your web site. The reason is that your SEO firm should have an incentive to help bring back "repeat prospects", who then stand a better chance of buying something you sell. This could be done at the start of the second year's contract, as it might be hard to do without a history of detailed tracking records at the beginning of the first year. The bottom line is, though, YOU DON'T WANT TO UNDERPAY OR OVERPAY YOUR PARTNERED SEO FIRM! Hopefully, your SEO partner feels the same way!
Recently, I have learned, though, that one good HOSTED web analytics service with a guarantee of little or no downtime may be better, since it is more flexible, reliable, and inexpensive in the short run than two purchased software packages.
Paul Bruemmer's 12/14/05 article: "The Power of Web Analytics" talks about the need to "Establish Your Business Objectives" and "Set Key Performance Indicators (KPI)" which is right in line with "Pay For Actions" SEO compensation goals. However, Shane Atchison's 2/9/06 article "Five Things Every CMO Must Know About Web Analytics, Part 5" in his six part series goes into much more detail of the entire subject as well as "Accuracy Is Absolutely Critical". That series along with Bryan Eisenberg's brand new series "Conversion Funnel Folly, Part 1" should give you plenty of tracking, analyzing, and funneling information to help improve online actions, sales, and ROI.
Lastly, while this "Web Analytics Vendor Listing" web site page has not been updated since 1/24/05, it still has many companies to choose from. I know of people who used #69 (WebTrends), #126 (HitBox), and #19 (ClickTracks), but I never got a review from them on their "pro's and con's". But, I do like Jennifer Laycock's article "ClickTracks Wows Site Owners with Version 6.0", as it demonstrates ClickTracks user-friendly attributes. However, the best advice I can give to determine which one BEST SUITS YOUR SPECIFIC PURPOSES FOR YOUR WEB SITE is to go (for free) on Search Engine Watch Forum's "Web Analytics & Tracking" topic, and post a new thread asking for member's opinions once you tell them your needs and requirements. You can do the same with WebmasterWorld's "Tracking and Logging" topic.
PS - I just noticed this software by Offermatica.com which "delivers sophisticated statistical analytics to help marketers determine which Web site elements help online conversions, and which elements hurt." It sounds like it is worth researching.
We are nearing the end of this series, but I need to discuss few more things like "exit clauses", "non-compete clauses", and go over my ideas on when "banning penalties" are appropriate in contracts before finishing up.
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