According Experian Hitwise Yahoo and Ask are the two gainers for the month of March 2010 with an increase in traffic by 3% and 21 % respectively although Google is at number 1 position with 69.97% searches, but this still not a good news for search engine giant  as it was the fourth straight declining month for Google. Google reached a high of 72.25% share in December, and has seen that number drop slightly each month since then.

statistic for search engines

But still, Google’s market share — as Hitwise sees it — is still more than twice as high as Yahoo, Bing, and Ask combined.

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The problem with conventional SEO billing is that most SEO companies charge thousands even tens of thousands of dollars with ZERO answerability, these so called SEO companies do not take responsible for any result. It is very much like paying a lotto game or buying a lottery. You may win and you may not.

Performance Based SEO is a new payment model in which clients pays after seeing the results, there are some popular variations like :-

1) No upfront or monthly payments. Pay per lead, per sale or % from profit.
2) Small monthly fee. And, Pay per lead, per sale or % from profit.
3) SEO Consultant charges a one-time minimal fee for the initial SEO Optimization then only gets paid when the Top 5 positions are achieved.

I think option #3 will suits both SEO provider as well as his Clients as it creates a performance or payout tier. Now companies can be “rest assured” that the SEO companies will most likely try to get best ranking for their business as soon as possible in time as possible in order to increase their monthly allowance.

The Performance Based SEO model is lucrative for both SEO Company as well as its Clients but it won’t work for every business or Industry or Website. As what SEO Company will do if they have to optimize a website in a very difficult and competitive field? It can take 8+ months even for an established site to come anywhere close to Top 10 results on Google. Then how SEO Company will recover its cost as by the time they get any where near the goal their allowed period will expire and they will have to quit and get’s the label of non performer.

Another issue that came in front of every SEO is to not getting complete control over website; for instance one of our clients is not ready to remove the splash page, but that flash page is creating problem for Google-Bots as that splash page is not allowing bots to crawl the internal pages. There are lots of other factors along with website design issues like complex shopping cart which produces long urls string with various variables and parameters, the content management system, hosting issue, poor content and list goes on which actually affects the Rankings, if SEO Company doesn’t have control over them then they can’t produce the results that every one desired that is Number 1 spot with their favorite keyword. So no smart SEO will accept performance-based pricing model without 100% control.

Another very general issue that I think every SEO company has faced at lest once in their life is that there are lots of clients that are only interested in number one ranking for any particular keyword again take the instance of one of our client from Gemstone Beads Industry wants Top most rank read number 1 for keyword Gemstone and for this he is ready to pay anything. Trying to rank for just One Keyword is fun as well as challenge for any SEO. But how much time it will take to get that ranking and no one has so much patience to wait for 2 – 4 years. But it’s a terrible damage to Clients Company. Instead if SEO tell them the importance long tail keywords to start off the campaign in order to get search visibility first and keywords second, he’ll get better results also, rankings have become very difficult to measure these days. With the rise of personalized search results and localization, two people can see two different rankings for the same term, on the same day, in the same city. Or there is difference in rankings in Newyork city and Dallas.

So, what’s the right move?

According to my expertise and what I’ve seen one of these ways will work:

Retainer-based - Not so popular with clients, but provides the most flexibility to any company. You pay a flat fee each month. SEO’s will work and report back every week/month.  If they are not performing according to your parameters you can fire them anytime.

Percentage of revenue or pay per lead - It’s another performance approach but it’s tied directly to the company growth and not to rankings. But it can be done only with 100% control of the site and marketing.

I’ve also seen that a mix of all these above models, plus performance incentives, generally work well. For example: Pay a retainer, plus a bonus if X happens. Or pay a retainer plus a percentage of sales.

It’s all upon the SEO Company to decide on which model they want to work. But in order to get success in Performance Based SEO, They must have greater control over website and carefully analyze all the parameters so that they can provide whatever they have been asked to provide then only at lest I can proceed on performance based pricing model.

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