Performance-based SEO simply means, you get paid inline with the results that you achieve. So if you do great, you get paid. If you don’t then you’re fucked. I see a lot of dickheads in this industry offering performance based SEO and it’s nothing more than a cheap trick to get people to sign up.
“Hey, work with us, you don’t need to pay anything until we get you first page in Google”.
Its fucking ridiculous, and I’ll explain why in a minute.
Before we go any further, I want to share with you an email that was sent to me recently from a friend of mine that does what I do – he runs his own SEO business, and he acquired a new lead who was asking about “performance based SEO”.
Here it is.
Just wondering whether you were open to negotiate a little on price. I was wondering whether I could pay $1,800 per month instead of your quoted $2,250 per month for the 1st 3 months and if I was to engage (sign-up) 2 new clients directly as result of the work you had completed on my site I would make a bonus payment of $1,350 (450 x 3) at the end of the 3rd month.
Now, here’s the reply given…
In terms of pricing, we don’t typically offer discounts or sales performance incentives. The reason for that is not because we don’t believe we’ll get results, I know that we will get results granted we have enough time to spend on your campaign given your level of competition.
As for performance based incentives, the main issue I have is that all I can do is send you leads to your business. I don’t have any control over the sales conversation or your close rate. While 2 new customers should be an easy gig, and I think we’ll get that pretty early, it’s still something that is out of our control.
You might think this is crazy, but we’ve had some customers tell us they haven’t received any new customers only to discuss each specific lead generated and have them admit they haven’t been checking their emails or answering calls because they were too busy.
Now if you ask me – his response nailed it.
Why performance based SEO sucks balls (sometimes)
Man, where do I even start?
I guess offering performance based SEO to get more clients might sound like a cool idea, but let me tell you, it can lead to all sorts of problems because you’re essentially taking on all of the risk.
But isn’t that exactly what someone does when they sign up with you?
Not really, and I’ll explain why in a minute.
There’s two ways of looking at performance based SEO.
Let’s have a look at both.
The stupid way.
“Hey look, come onboard with us. You don’t pay us anything until we achieve the desired outcome.”
The first problem is the definition of “desired outcome”.
That could be interpreted in many different ways. Is it rankings? Is it more leads? Is it more revenue? Is it all of those things?
Unless you educate the client about how SEO as a marketing strategy should be done – they’ll obsess over rankings.
I always move the conversation away from rankings, and I bring that conversation back to revenue. When you do that, you can then position yourself more favorably because you have more control. Instead of fucking around chasing rankings and manipulating the search results, you measure the amount of leads that you can drive to a website through organic search.
Guess what? Sometimes you can often achieve that outcome simply by fixing their fucking website, because most business owners have no idea what their conversion rates are. Chances are they’re fucking wasting traffic they’ve already got.
But let’s face it, 99% of people that work in the SEO space define rankings as a “performance indicator”. Infact you’ll see this sort of crap all over the place. “If we don’t get 60% or 50% of your keywords to the first page in Google in the first 3 months then you don’t pay us!”
Bull — shit.
Once you start tracking customer inquiries as a monetary value (conversion), you can start pulling levers, pressing buttons, and crunching numbers and saying to your client “Okay. Bob, this month, you had 25 inquiries, which given a reasonable close rate of 25% should equate to $38,000 dollars. You’ve paid me $2,000, you should have a profit margin of $36,000.”
That’s the conversation you need to have – not “Hey Bob you’re now on the first page of Google for Fluffy bunnies”
When you’re working at that sort of level, clients will just keep throwing cash at you non stop.
A better way (kind of)
Now I say “kind of”, because this is one of those strategies that big wigs in the SEO space like to talk about like Brian Dean, where they’ll publish some big long blog post titled “How I quadrupled my income running an SEO business from home whilst working in my Teenage Mutant Ninja Turtles boxer shorts” or some crap like that.
It could be really easy to tell you this strategy works and you can make a shit load of money doing it – but I’ve often tried it and found its not so great because of the following reasons –
- It sounds good in theory but sucks in the real world
- You have no control over other peoples stupidity
- Business owners can be greedy (and sneaky)
So what is it?
It’s performanced based SEO where your earnings increase inline with your efforts.
In other words, the better you do, the more money both of you make. (you AND your client)
BUT (and here’s the biggest catch)
You have no control over what happens to that traffic and those leads once they land in the client’s lap. So you could be doing the world’s greatest SEO, sending a shit load of leads to your client, and their close rates might be fucking awful. Let’s say you’re sending 500 leads to a client a month, and they’re closing two out of that, or making two sales – that means their close rates suck balls and performance-based SEO is just not going to work.
Again, it’s something that’s well beyond your control. You can’t control how well the business owner is closing sales or converting inquiries at their end. You can read more about that here if you want.
Of course if the business owner knows what he’s doing, he wont have a 15 year old girl on the front desk or answering customer enquiries and they’ll actually be closing deals and converting customers. But that’s hard to know when you first onboard a client.
Just remember to prequalify and avoid time wasters that use language like this “John, if we’re not on first page for these keywords, then we’re not going to pay you.”
So yes or no for performance based SEO?
I don’t know anyone that works in this space that provides guaranteed results, where the outcome is 100% every fucking single time.
That’s just absolute nonsense.
I think performance-based SEO can work if you’re taking a commission or a set share of sales as they increase over time. So if a client signs up for $1,500 a month, and the first month they do $10,000, and they’re three months in, and that moves to $60,000, then after 12 months, they’re doing $800,000, I think that that’s a really good indication of positive results, and you should be paid inline with that.
It’s not something that I’ve done myself, but I think if anything, if you want to talk about performance-based SEO, that’s probably the best way to approach it. If the campaign is doing extremely well, then you should be provided with some form of incentive to work even harder to continue that momentum. I’ve worked on numerous campaigns where the client might be making $900,000 a year, and they’re only paying me $30,000.
That, at times, doesn’t quite seem right. So performance-based SEO, in that regard, when you’re paid inline with the results achieved is something that could potentially work.
Want to work with me?
I help small business owners do their own SEO. I help people start their own SEO businesses. I also help marketing agencies refine their processes and bring SEO inhouse.
Oh and by the way, I make a great toasted ham, cheese and tomato sandwich.
Come over Ill make you one.