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.
"...even if you worked with a customer for a year, and then stopped. Your customer will keep on enjoying the fruits of your work many months later." = How true this is IF the real, valuable results were produced through the SEO efforts, and not due to other things like offline marketing efforts. However, if both parties agreed that the SEO efforts were the source of the incremental increase in KPI's, why would any successful SEO buyer want to go through the entire research and RFP process all over again by not renewing the successful contract? If the client if foolish enough to believe that the SEO affects will last a very long time, he needs to be told that he needs to independently research how ofter the leading search engines are changing their algorithms. Plus quality content that is "search engine friendly" needs to be added regularly along with more incoming links, in most cases.
"so: 1. make sure you have a long term agreement - 3 to 5 years is great. 2 years is not so great. 1 year - DON'T DO IT !" = My opinion is one year or even 6 to 9 months may be OK depending on the nature of the client's business and how competitive it is, how long the web site has been published, the current level of KPI's, and the architecture, quantity and quality of the site's content. Main keyword competitiveness is also a crucial factor.
"2. make sure you have milestones that once you reach them, agreement is renewed automatically for another period, and so on." = "automatically" may be a problem if the "chemistry" and communication go bad. I prefer to have quarterly KPI milestones with formal overall performance evaluations done by the SEO about his client, and vice versa. This Institute of Communications and Advertising PDF by David Rutherford has an "Agency Feedback To The Client" form on page 27 that could be adapted to an SEO's evaluation of client cooperation, etc. On page 23 is an "Agency Performance Evaluation" for "Interactive" that could also be adapted for SEO services exclusively.
"3. if you are not working in a well organized affiliate program (like Casino's have), or if you are doing some of the work on customer's site, and especially if your customer's IT people are responsible on implementing the changes to the site... Make sure there is a "penalty fee" for your customer, so if he didn't finish implementing the tech changes or he didn't do all the content/tags changes needed to his site in a limited time frame - he starts paying you monthly for the work you do." = Definitely, some kind of penalty is necessary and fair. But, what kind, how much and how it's implemented depend, in my opinion, on the seriousness of the lack of timely cooperation as it relates to producing incremental KPI's. That can be a tough one to negotiate fairly, as opinions of the "seriousness" can vary. But, if negotiations fail on that point, maybe Shoko's suggestion is not so bad depending on the amount of the "monthly payment", and at what month in the scope of the entire contract length the situation happens.
Shoko's point number 4 was covered in my "Part XI" of this series, and it is all good advice, in my opinion.
"5. Don't enter a deal, if you don't know what you dealing with.
the general rule is: You Don't Know What you are Dealing With.
on my opinion, you can not enter a PP Performance deal unless you already work with this customer for a substantial time or with another customer in the same business arena:
You don't know your customer business model (accept for what he tells you)
You don't know how much each visit / visitor / registration / download is really worth to him
You don't know his churn rates (if relevant)"
so, suggest working for the first year on monthly fee, and in the end of the year - see if you can renew your agreement on PPP model." = If the SEO is doing a brand new site for the client, then I would agree to anywhere from the first six months to a year depending upon the best estimated value proposition of the business, and the competitiveness of the industry and main keywords. However, I feel it is the responsibility of the SEO seller to research the prospect's business as best he can (just like it's tough to research an SEO's business). At the very least, the SEO should do his best to use his SEO prospect "BS detector" mentioned in "The Ones That Don't Come Back". The clients aren't the only ones who "BS" though. That same forum thread has an SEO-SEM who said: "Don't forget the "BS-Factor" (Smiley Icon). This is a big part of any sales of marketing services and products. You and I may be equally qualified for a job but I may be able to sell it at 10 times the price you quote - and maybe even actually GET the sale just because the client believes "you get what you pay for" ... That's the BS-Factor and it rocks! hehe"
I'm not judging anybody here (SEO buyer or seller), but the "art of Bull-Shitting" has no place in any relationship that makes common sense to be a long term one. I even believe that short term relationships should not have the "BS-Factor" with the way that WORD OF MOUTH travels in this digital age. All this is true without bringing up the most looked up word in the online Merriam-Webster Dictionary for 2005: INTEGRITY (no offense to anyone intended).
"6. make sure payments policy is clear. no charge backs, no holding back of payments because WebTrends didn't work for a couple of weeks this month, so your customer doesn't know how much to pay you, and he wants you to wait until his IT people will have the time to retrieve the lost 2 weeks of data..." = Good points, except the SEO buyer may want to have some sort of "charge back" if his web site gets banned, because the SEO seller KNOWINGLY (see this Search Marketer's wording in "Code of Ethics for SEO"), without upfront discussion, disclosure, and mutual written agreement, did something to badly break the Google Webmaster Guidelines (or any other "designated in writing" search engine's guidelines). "15 Shades of SEO Spam" by Jim Hedger gives more details on this for SEO buyers to be aware of, and GrayWolf's "Corporate Black Hat SEO Terminology" is a great "tongue-in-cheek" alternative definitions guide. But, if you need an outside "SEO Expert Witness" to help determine if the SEO Spam was done knowingly, Tony Wright is someone to check out, as he has expert witness experience.
I also firmly believe that there should be at least TWO DIFFERENT SETS OF WEB ANALYTICS SOFTWARE tracking the online results, just in case there is a problem with one of them. 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. There may also be small differences in the results of two different services even though they are configured as much as possible to be the same.
Shoko's point number 7 is a good one, but I covered how I would qualify it in point number 5 above.
"8. don't do it if you don't have too, unless you are talking about great money like casinos or viagra dealers offer... but that is a whole different SEO game, isn't it ? = Every seller, no matter what he sells, has the right to price his goods and services the way he wants to! However, besides my belief that "SEO - Pay For Some Kind of Performance" compensation would help with both the "education" and "credibility" issues facing SEO's, there is a fast growing trend with large and even smaller traditional advertising agencies (who are quickly acquiring "interactive" departments) to try to sell the SEO's clients a "fully integrated online and offline marketing strategy". Kevin Ryan's "Search THIS: For Whom the Search Bell Tolls says: "Advertisers want smart integration and sound advice. They are tired of misinformation and excuses." I believe that SEO clients that are already involved in a "win-win", "Pay For Some Kind of Performance" arrangement will be less likely to "jump ship".
To top it off, the Search Marketing Industry has gotten much more competitive (as mentioned in this TextLinkBrokers.com 1/9/06 blog post). This is combined with my belief that the customer and client will want even more POWER in determining how they pay their vendors and consultants, more RECIPROCITY in having open, honest, upfront and good collaborative communication, more PRECISION in the type of results they're paying for, and more ROI RELEVANCE in what they pay for. These are the principles of Yankelovich Partner's "Concurrence Marketing" that I believe can, and should, be applied to clients and customers as well as consumers.
Animated image courtesy of www.artie.com.
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