Traditional SEO Payment System

When using a traditional SEO payment system, a large sum of money is usually charged to the client at the start of the project. The problem with this form of payment system is the work the SEO does from this point on is not guaranteed to show any results for the client. Essentially the SEO specialist is forcing the client to assume all of the risk for the project because the SEO will get paid regardless of any results.

A new variation of this form of schedule has come out where the SEO may split the sum up into stages. An example of this is when half of the sum will be paid to the SEO company at the start of the project and the other half will be paid only when the clients desired rankings are achieved. This does reduce the amount of risk to the client, but why should the client assume any risk at all?


Performance Based SEO Payment System

Performance based SEO differs immensely from a traditional SEO payment system. The search engine specialist will begin work on the project before any money has even changed hands and they will continue to work on the project until the client sees rankings for their keywords. This transfers all of the risk the client once had under the traditional payment system and puts it all on the search engine specialist.

Under the performance system there is usually a contract that is signed for the length of 12 months. The reason for such a long contract is that it may take some time for keywords to rank. For some of the more competitive keywords, it could take half of the contract length to achieve.

The only way to truly show how this system works is to walk through an example and give some hard numbers. Let's say that you have 3 key phrases that you want to target:

          1. widgets
          2. gadgets
          3. smidgets

These three keywords have different levels of difficulty. The levels of difficulty are determined by looking at the number of results in the search engine and by looking at the competition in the current top 10. Obviously a keyword with fewer results and less competition for the keyword results in a cheaper price for that specific keyword. Let us take a look at our 3 keywords below and look at how a pricing structure for these keywords may look.

          Keyword         Difficulty          Price
          Widgets              Easy         Inexpensive
          Gadgets          Modedrate     Mid-Range
          Smidgets          Difficult         Expensive

By looking at this list of keywords and price ranges, the widgets keyword is easier to achieve a higher ranking than say the smidgets keyword would be. Thus, the smidgets keyword results in a much higher price.

Now that we understand the pricing structure, let's run through an example on what your rankings may look like and what you would pay.

          Keyword          Rank               Price Paid
          Widgets               5               Upper End Price
          Gadgets               9              Mid-Rang Price
          Smidgets             19             Lower-End Price

First, let's look at the widgets keyword. The rank for this keyword is high. This would justify having to pay the upper-end price for this keyword. Keep in mind however that this keyword was cheap to begin with. Therefore, this keyword will be at the high end price of the cheaper amount.

Now let's take a look at the gadgets keyword. This keyword has a little lower of a rank and thus the price that one would have to pay for this keyword's rank is likely not going to be at its max amount. The keyword is still ranked rather well and will generate lots of traffic yet. If we take a look at the pricing table, the keyword is at a mid-ranged price. This means that the keyword will be a little lower than the max that could be charged for this mid-ranged keyword.

Last, we have the smidgets keyword. This keyword has a little lower of a rank and will have a low end cost of the higher priced keyword. If this keyword drops much lower, it is likely that you would not be charged for this keyword for that month.

You may be wondering why this is such a big deal. A traditional SEO pricing structure would charge you a large flat fee at the beginning of the project to cover them for the work they are about to do. However, they can never say for sure that you will rank for these keywords. You can't even be sure that they are even spending the time they should be on your project. Why should you, the customer, have to pay for something that may not even work? Under a performance based SEO system, you are guaranteed that they are working on your project.

There are a variety of benifits of going with a performance based SEO company over a traditional SEO company. Some benefits are listed below.

     1. A performance based SEO company requires no initial investment into the project to get it started.

     2. Under a performance system you only pay if you see results for your keywords. This will give you more peace of mind since you know work is being done on your project. If no work is being done on your project, you will likely not see results and thus have no bill for that month.

     3. Work needs to be continuous under a performance based system. If the SEO company stops working on the project the rankings will likely drop as will their income from that project.