One of the great things about paid search marketing is that you only pay for the clicks you receive and some in the industry promote SEO as a performance based service as well with the hopes of selling you search  engine optimzation services that you only pay for when it produces results.

How Does Performance Based SEO Pricing Work?

Most firms will charge typically 15-20% of the revenue that is produced from their work and look to commit you to 1-3 years via contract. Now the revenue part is not really that far off as any search marketing firm is going to charge you 10-20% to manage your PPC Account but the extended commitment is where you can feel trapped.  Most agencies will say that they need the longer than usual contract because optimizing a site generally takes around 3 months of full time work, and then part time work to get keep you ranking. Getting a site to the top results in Google, Bing, or Yahoo, usually takes around 6 months. Oh, yeah they want this to be profitable for them too. Basically, if they are going to commit to doing all that work for free at the beginning, you have to be willing to stay with them for long enough to make it worthwhile for them.

I guess somewhat valid in theory but the realty is that within six months you should see some movement in your SEO and if you have not by then I would think you will not see much then. If you go down this route make sure you have an out around this time in your contract.

What If You Want To Reduce The Contract Time From A Performance Based SEO Company?

This is where you are going to get nailed as by doing this you really are putting yourself in a typical agreement that you would for any true search engine marketing firm. The catch is that you are going to pay top dollar for this “retainer”. Somewhere in the  ballpark of $5,000-$10,000 a month for every month you try to shorten the contract. The question you have to ask yourself is “does this really make sense for me to pay an over-inflated price for these services”?

What Will Be The Performance Based SEO Company’s Response?

At this point you are going to get some answers similar to these:

• “We” are the experts in a industry of snake oil salesmen and so called “experts”.
• “How much additional revenue will my company bring in if I rank 1st for a certain keyword” is actually a very difficult question to answer before getting that ranking and requires a ton of insight into conversion rates, clickthrough rates, search volume, etc.
• Fee based SEO still requires you to have the capital to pay for a placement before you have received the financial benefit from the search engine ranking.
• Paying for unclear results doesn’t make much business sense.

So Why Not Go With A Performance Based SEO Company?

• I have been in this industry for over 15 years and these types of performance models have been around for the majority of my time.  They have never worked then or now.
• Money! Yes,I said money! But how can that be as I am  not paying for anything until it works? Well, yes you are and it is called opportunity time. The time you are wasting with a firm like this is going to put you real SEO that much further away.
• More opportunity to get your site banned – assuming that after a few months, lets say six or so, your firm is going to cross over to the dark side to get the results they need to start making some revenue to cover costs that they have not gotten since the start of the contract.  Things like buying links, producing thin (non-authoritative content) or server based “spoofing” or “redirecting” will get your site banned. They can walk away (or be fired) but you can not and you will have a near zero chance of getting your site back in the good graces of the search engine gods.