In the world of SEO, performance-based SEO—or rather, this pricing model—is doing quite well. There's no shortage of SEO firms and clients who prefer this model. It's also a controversial model (okay, but is there any solution that doesn't?) and is often considered the most client-oriented. Is this really the case? Let's take a closer look.Positioning for results – the Verseo perspective
First, an important note: From the very beginning, Verseo offered its clients a "performance-based" or related hybrid billing model (in this case, the majority of the agency's fee depended on the outcome, with the rest being a fixed amount stipulated in the contract). The observations contained in this post are based on our experience working with performance-based contracts and the opinions of clients who chose this billing model and shared their thoughts with their account managers.
Pro-customer model – is it really?
Much will depend on how we define this client-centric approach. If we define it as "low price," then the unit price "per phrase" may turn out to be higher than in the hybrid model (in the case of a subscription agreement, it is possible to calculate the average price for each phrase, but this is a rather theoretical model). If we define it as selecting the most profitable phrases, there is always a risk that these will be profitable phrases for the agency, chosen according to the model: phrases the client cares about + phrases that are easy and quick to position (because the agency is not a charity, and the SEO specialist has to eat, as if to avoid switching to photosynthesis, so it would be nice to make some quick money from this contract). As you can imagine, the former will be in the minority.
What the hell is going on all of a sudden?
The "performance-based" model truly motivates rapid results, as the contract should be cost-effective and generate revenue for both the agency and the SEO specialist. Experienced SEO specialists have seen websites quickly achieve top 10 rankings. However, this wasn't without reason. The most common sources of such success include:
- a large investment in the website, which means: rich content, links from paid sources well-rated by Google, extensive high-quality resources, etc. The high intensity of such activities indicated that we were dealing with an extensive and wide-ranging strategy involving significant resources;
- activities that would fall into the section commonly referred to as Black Hat SEO and often bring the following results: rapid growth – rapid decline;
- a good balance between the level of difficulty of the contract, the quality of the website and the time needed to achieve the effect – an experienced specialist estimates the chances of success and proposes a solution “for the effect”, because he has solid grounds to believe that this effect will be achieved in a satisfactory and cost-effective time.
This last case best illustrates that a performance-based contract can make sense under certain circumstances. However, it should be approached rationally and can be used in justified cases.
SEO – a service like no other
Because we operate in the B2B sector, we know that our clients are entrepreneurs who, in certain situations, will tell their potential clients, "Sir, this is completely unprofitable, it makes no (economic) sense." Because they know that something simply can't be done well, reliably, without sloppy work, cutting corners on materials, in such a short period of time, etc., at a given price.
In the case of SEO it is similar – you can't have an experienced SEO specialist, good resources, copywriting, etc., for just one smile. The performance-based SEO model is justified when payment is deferred for a relatively short period. The service cost should also be taken into account.
SEO natureA service agreement (generally, not just SEO), according to lawyers, is a best effort agreement, not a result agreement. Because the SEO specialist operates in an environment external to the agency—the search engine—they don't set rules, don't modify them, and can't predict changes. They adapt to the conditions of this environment and strive to perform as best as possible within them. The variables an SEO specialist encounters are numerous, and we're not just talking about the over 200 ranking factors that are Google's closely guarded secret. Let's take a typical summery and decidedly "non-SEO" example: a visit to a beauty salon for leg waxing. The beautician operates in an external environment (in this case, the client's legs) and takes actions consistent with their knowledge and experience, which are intended to ensure that the client enjoys smooth skin for as long as possible. A beautician can work with due diligence, but they have no control over the client's hormonal balance, their individual hair growth patterns, post-treatment care (whether they use products that delay hair regrowth), any supplementation needed to strengthen hair and nails, etc. As a result, they cannot issue a certificate guaranteeing that no hair will disturb the smoothness of their legs for 21 days. The client will have no problem paying the agreed-upon amount immediately after the treatment, or only a few weeks later – depending on when hair reappears in the treated area. Of course, the beautician wants the client to be satisfied and return to her salon.
What does bad PR do to performance-based SEO contracts?
The same thing that harms them as other types of SEO contracts: promising unrealistic or even unrealistic results that have no bearing on reality and can only disappoint the client and discourage them from using SEO services. SEO services involve specific costs and workloads. Therefore, there is no point in offering an SEO contract that will never pay off. A separate issue is that sometimes contracts fail to achieve a top 10 ranking despite numerous efforts. Searching for the causes, making further corrections, implementing activities, etc., do not translate into the desired result. Such cases are an inherent part of SEO craftsmanship and a risk inherent in this work.
Summary
The above article covers the following topics:
- Verseo's approach to billing for positioning results
- Justification for using the effect-based positioning model
