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Why You Should Never, Ever, Hire ‘Pay On Results’ SEOs

Steve Morgan

by Steve Morgan on 10th July 2013

Money stackPaying on results sounds like a win-win scenario but as Steve Morgan reveals there are factors to consider that mean you could end up paying with more than just your money. 

Recently I met with a prospect who had really been let down by his previous SEO company. Four months into a 24-month contract, he asked them to show proof of their work because he hadn’t seen any improvement in his rankings and organic search traffic whatsoever.

But what did the SEO company say?

“No.”

They claimed intellectual property, i.e. that if they showed him their work, he could go off and do it himself… which is stupid, because they had already locked him into a ludicrously long contract. Regardless, many would argue that they may not have even lifted a finger and simply pocketed the money each and every month (in fact I even checked his website’s inbound link profile and could barely find any evidence of their work). Fortunately for him, he managed to worm his way out of the 24-month contract, paying for only 6 months’ worth of supposed ‘work’ instead.

Understandably, having been bitten by a bunch of scammers who sound like the type of people who give our industry a bad name, he was considering a different approach this time around: ‘pay on results’ SEO. As the name suggests, this is when a client pays a company to improve their rankings and only pays when pre-agreed results are met – usually a #1 ranking for particular keywords.

Even though he was also meeting with me, and I don’t offer such an approach, he seemed really keen on the idea, so much so that he was asking me about it. And I mean, why wouldn’t he be keen on it? He only pays if/when he gets a result? Sounds brilliant and risk-free, right?

No. Not so much.

Put simply, if you only pay the SEO company once a result has been met, then they may simply do whatever it takes in order to get that result. Whatever it takes. That could mean black-hat, spammy tactics that will get you up to the top of Google as soon as possible, but could do damage to your domain in the long run – e.g. if the black-hat work is noticed by Google and you’re subsequently penalised for it. Of course, by then, you might have already paid them, and they can say: “well we did get you the result you wanted,” but I very much doubt they’re going to rectify what they’ve done after you’ve paid them. So while it might be risk-free when it comes to your cash, there may be bigger risks at stake, such as your website’s long-term performance in search engines.

Now maybe I’m being a little harsh. Maybe there are ‘pay on results’ SEOs who do not conduct any dodgy tactics. But if you are considering this approach then tread very, very carefully.

Contract

So what should you do instead?

Well, if you’re working with an SEO who’s talking about improving your SEO over the long term and talking about ROI (return on investment) then that’s a good start. If they’re talking about how a particular result might generate you a certain level of ROI, then at least you can see if it fits in with your budget that way. Also, if they’re talking about conducting SEO over a longer period of time, chances are that they will be dealing with lower risk strategies that will improve your website and your brand – not damage it.

What are your thoughts and opinions? In fact, if any ‘pay on results’ SEOs or their clients are reading this, what are your thoughts? Do you agree or disagree? Maybe I’ve got the wrong end of the stick, and you’d like to argue the other side. Whatever the case, please do leave a comment below.

The views expressed in this post are those of the author so may not represent those of the Koozai team.

Image Sources

Pound Note via BigStock
Man Tearing Contract via BigStock

Steve Morgan

Steve Morgan

Steve Morgan is a freelance SEO consultant based in Cardiff, South Wales, trading as Morgan Online Marketing. He also runs a blog called SEOno, covering SEO, PPC, social media and music.

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22 Comments

  • Stephen Kenwright 10th July 2013

    Great post Steve, I agree with you when it comes to ranking results. The first company I worked for acquired a client from a much bigger agency after they’d been somewhat neglected…

    They had a contract with their old agency that meant fees were doubled for the time they ranked in the top 3 for their main keywords, which meant that the site had been blasted with spun articles on a massive scale, and avoided ranking drops due to the sheer quantity of links coming in. When Google toughened up last year the site had no good links whatsoever, and dropped pretty soon after they moved agencies. There’s no way it will rank again without considerable investment, and now he feels like he’s been burned twice.

    Other measurable results can work though I think, e.g., sustained traffic increases to a certain level.

    Reply to this comment

    • Steve 10th July 2013

      Hi Stephen, thanks for commenting. Sad to hear another story of someone who’s been burned. That’s the problem with this approach – people think they’re getting a good deal, but there’s ultimately bigger risks at stake…

      Reply to this comment

    • Sakis 11th July 2013

      I agree, great post, @stephen – I had this scenario with a client whilst at an agency. Even though this sounded like a completely risk free strategy for the client, this was agreed prior to the Penguin aftermath and it became a complete drain on agency resources and the client became very unhappy to bring the website in-line with algo changes and ultimately, get results and make the agency a profit.

      Bad idea for clients, they will either be stung by scammers or despised by their supplier, it’s a lose lose situation IMHO!

      Reply to this comment

  • Ed 10th July 2013

    Nice article. I’ve often contemplated this model as an option. To be fair, I hadn’t thought about the downsides and it’s a very good point. The fact that people do this is pretty grim. Is always going to happen though. I’m starting to get a feel that more and more SEO ‘experts’ are materialising without much experience and certainly no qualifications. Reminds me of the IT training ‘bandits’ from the early noughties. It all then comes back to paying more by going to an agency and getting the reassurance of a contract and ‘face’ of the business or trying your luck with a freelance. Tough call. Word of mouth perhaps the best route down that particular avenue.

    Reply to this comment

    • Steve 10th July 2013

      Yes, that’s a good point as well. I have a blog post coming soon on my own blog that’ll be addressing the whole word of mouth situation with SEO. I think it says so much more about an SEO if they are referred on by someone following a testimonial than if they’re simply found because they rank well in Google themselves…

      Reply to this comment

  • Mike Essex

    Mike Essex 10th July 2013

    Great post Steve, and thanks for writing for us.

    Interestingly with PPC a lot of agencies operate on a percentage of spend model. So they would take X% of whatever you spend on PPC that month. I’ve always found this a little odd, as if you save the client money they pay you less so there’s less incentive to deliver good results.

    We use a flat fee model so don’t have the above conflict, but I find it interesting that it’s such a common place model. It’s almost the opposite of “Pay on results”.

    Reply to this comment

    • Steve 10th July 2013

      Thanks Mike, thanks for having me!

      Yes! I’ve heard that too. I was even chatting about it with a friend and fellow SEO recently. I disagree with it as well, and I don’t think I’d be comfortable charging based on percentage of spend… It’d be good to know if other people do it/have done it and what their experiences are.

      Reply to this comment

    • Arianne Donoghue 11th July 2013

      I agree with you Mike – back when I was agency-side, I tried very hard to move our billing model for the PPC team away from percentage of spend – as it does mean you are less likely to do what is best for the client and instead best for the agency. Not that the two always are mutually exclusive, but they clash a lot!
      I think for PPC, the way forward should be a flat fee combined with a performance element, that incentivises the agency to deliver stellar results above and beyond the daily rate.
      For SEO it is undoubtedly more complex as it is more of a long game with more risk. Personally, I think flat fee (representative of the resource/time) which is the main cost in SEO is most appropriate, but won’t be in every circumstance.
      Ultimately fees will just have to continue to evolve as the industry does, so it’s a shame to see some using billing models that are over ten years old!

      Reply to this comment

  • Matthew Ortner 11th July 2013

    Hi Steve,

    Thanks for deep insight and it’s very true that pay-on-results or short-term SEO is not the right solutions for any business. As those seos can just bang your websites with bunch of Spammy links and will take you website in ranked for sort time. But ones you caught by Google algorithm it would be real hard to deal with that.

    Reply to this comment

    • Steve 11th July 2013

      Thanks Matthew. Absolutely. Like I said in the post, I’m not saying that all ‘pay on results’ SEO is bad, but I imagine you’d have to be careful…

      Reply to this comment

  • Doug Roberts 11th July 2013

    My take on this is that it all depends on how you define “results” and measure your KPIs.

    There’s a world of difference between “Pay on results” vs. “pay on the results that actually matter to your business.”

    How many people have ended up paying for a #1 ranking that delivers no traffic, all because the SEO is looking for an easy win.

    So you focus on organic traffic, but even then if the traffic is going to benefit your business it has to be relevant. Watch out for low value keywords with poor commercial intent.

    Do you want to pay every time a customer comes through your door but leaves with nothing?

    So you’ve got to take into account visitor engagement in some way and usually the best way to do this is to look at the increase in sales (or other goals) generated by an increase in organic traffic volume or better qualified organic traffic.

    As you mentioned in the article, you have to understand the difference between a quick win and a long term benefit (and any potential risks).

    While “pay on results” may seem like an easy way to minimise risk, your better off having an open, transparent dialogue with your SEO and making sure everyone shares realistic expectations.

    Reply to this comment

    • Steve 11th July 2013

      Hi Doug, that’s absolutely it – you have to be careful that you don’t do ‘pay on results’ SEO on a keyword that a) doesn’t drive any traffic and b) is easy for the SEO to get ranking because that really is a losing situation for the client: paying for the results that don’t actually deliver anything.

      Reply to this comment

  • Calum 11th July 2013

    Excellent post. I’m always surprised when clients don’t get to see any evidence of SEO work. There’s ways of showing your work without revealing every drop of secret sauce used. I’m now convinced that dodgy SEOs will still do a roaring trade until clients start to take them to task.

    Reply to this comment

    • Steve 11th July 2013

      Aye, I certainly don’t agree with it, and I think it’s ridiculous that they thought the client would go off and do it themselves if they told him what they were doing… I’m not sure I believe that at all.

      Reply to this comment

  • Russell McAthy 11th July 2013

    Nice article Steve.

    I think there is a disconnect between paying for results (which is a must for most businesses) and paying to achieve a non viable metric.

    There will always be a result of the actions any SEO agency undertakes – what is key is to understand what the overall goal of the campaign/project is and to set KPI’s that monitor and show success (or failure – and in the case of this understand WHY)

    I think the goal of your post was to get people to move away from the get to #1-3 and we’ll pay you X. The problem is often with understanding of the work required and not that you undertook the wrong campaign.

    When working with agencies within a multichannel environment we ensure that marketing KPI’s match an overall strategic view on how they want to progress the business. Its often not about sales directly and is more about cost efficiency and quality of sale (sales come from brand terms – which should be different metrics that generics) .

    Here is where the KPI’s set for agencies are invaluable and need to be discussed as part of the business planning not just set without consideration.
    WHAT ABOUT….
    Lets consider a overall SEM CPA, getting the PPC and SEO terms to work together to own a cost per acqusition and support eachother rather than fight to get the same traffic
    OR
    Lets look at testing different meta descriptions to increase CTR – not just about higher positions.
    OR
    Lets discuss the option to focus on a certain group of terms – and analyse the overall value of these pages (value being not just in conversions but also in leads / content consumption / lower bounce)

    Sorry for the sporadic approach to this comment – multi-tasking whilst writing :)

    Reply to this comment

    • Steve 11th July 2013

      Hi Russell, thanks for the comment. I think you’re absolutely right. The purpose of my post was more to suggest there’s still a big risk if you work with people who advertise ‘pay on results’ SEO services (i.e. “you only pay us if you get a #1 ranking for keywords x, y and z”), even if the financial risk is removed. But you’re right – a lot of it comes down to client understanding (or lack of understanding, as it turns out) and what we can do about it.

      Reply to this comment

  • Kevin Gibbons 11th July 2013

    I would disagree with this – personally I think all contracts have an element of risk involved, everyone wants to get results as quickly as possible, of course. But it’s up to the client to do their due diligence when making a selection and the agency to set realistic expectations on how they are going to get results.

    The key word here is risk – that’s what the client and agency need to establish and ensure that the right approach is taken for the client.

    Obviously pay-per-performance contracts are better incentivised to hit targets and I agree some are unethical and don’t offer value. But that’s the agency, not the contract. As an agency, I’d rather gradually hit realistic targets with a sustainable approach that can be built upon month-on-month(-on-month), than the alternative of seeing a huge spike and cashing out quickly. I’m incentivised by keeping clients happy for 2-3 years+, there’s far more money to be made over the long-term anyway. Plus providing the performance deal reflects business value, it allows you to scale budgets in a way that clients are more comfortable with, after all they’re re-investing profits you’ve made them.

    As with any client-agency relationship, it’s about making it win-win, which means mirroring each others goals and approach to execute a strategy. And then picking carefully, both ways.

    Reply to this comment

    • Steve 11th July 2013

      Hi Kevin, thanks for dropping by and leaving a comment – I was hoping that this would inspire debate, so that’s good. :-)

      I agree with your points. It is up to clients to make sure that they are careful about what contract they proceed with, and in the case of my prospect, I would’ve been upset if he were bitten again (a second time) simply because he didn’t understand the risks involved with the less ethical ‘pay on results’ SEO providers.

      I’m by no stretch suggesting that all ‘POR’ SEO is unethical, nor that other alternatives are going to be 100% ethical, but it’s important for prospective clients who are interesting in giving it a go realise the dangers involved (if such dangers exist with the agency/provider they’re looking to hire).

      Maybe my title’s a little too sensationalist… In hindsight, I probably should’ve called it “Be Careful Hiring…” rather than “Never, Ever, Hire”…

      Reply to this comment

  • Kevin Gibbons 11th July 2013

    Thanks for the reply Steve – title was good, it sparked interesting discussion at least!

    Just to clarify, based on experience – retainer+performance models have always reflected much better value to me (both ways). I covered that a bit here: http://econsultancy.com/uk/blog/63021-integrated-vs-specialist-have-agency-models-changed-in-2013

    As Russ says, it needs to reflect business value/metrics – you win and lose together as a team.

    Reply to this comment

  • Lord Matt 14th July 2013

    Two words: Customer Reviews.

    Have other insightful customers seen actual benefits to the SEO companies work? Everything else is window dressing.

    Reply to this comment

  • Allan 15th July 2013

    But clients ask for KPIs :(

    Reply to this comment

  • Jan Jordyn 23rd July 2013

    Personally I do try to take the risk element away from the client by offering a results-based SEO service, so that new clients will come on board. I also make a guarantee that everything I do is “White Hat” – no dodgy stuff!

    I have a “no-minimum contract” policy, because personally, I would resent being tied into a 12-month contract before I discovered whether a company was any good or not.

    A controversial point perhaps, but I have no problem with sharing my SEO activities with my clients – I find that working in a transparent way builds trust. If any client decides they’d rather spend their time doing their own SEO that’s their prerogative – I for one – won’t be losing any sleep over it.

    Reply to this comment

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