Would you offer your seo services for commission only? As a small business owner would you request someone to market your site based only on how many sales you make? The question of commission based seo services arose in a thread on the Small Business Forum where the original poster was hoping to get just that. He wanted to get in the top 10 in Google or Yahoo offering 10% of sales generated from search engine optimization in return. Would you take the deal?
Why Working For Commission Is A Bad Deal For SEOs
I wouldn’t and said as much in the thread. My rationale is that too much of the sales process would be out of my control. An SEO could drive plenty of traffic to a site that won’t convert or has a poor business model. The request is essentially asking the SEO to take on the risk of another business. In this specific case the thread starter’s business is easily duplicated. Why work for 10% of the sales when you could duplicate the site and work for 100%?
Even if you are willing to take on some of the risk would 10% be enough? It depends on how much the 100% is I suppose, but is seo only 10% of the success? Again it depends, but I would suggest that for a two month old business a successful seo campaign is worth a lot more.
In my last This Week In SEO post I linked to an article by Stoney deGeyter asking where does the responsibility of the seo end and that of the client begin? A successful seo campaign needs both SEO and client to do their part. While it’s not automatically the case my general sense is clients asking for commission based seo are looking to avoid their share of the responsibility.
However, from the perspective of the small business owner is the request unreasonable? Small business owners typically have limited funds and full scale seo can get expensive depending on the current condition of the site and how competitive the industry. As a small business owner myself I’m aware of the many things you may want to purchase for your business, but simple can’t afford. To some, commission pricing might seem like a fair offer since the SEO’s fee would appear to be based on their skill. Most SEOs are aware of how much more than seo is necessary to make a sale, but should we expect clients to know?
My experience tells me that most small business owners making this request are shopping for price over value. As I suggested to the thread starter my guess is the SEO responding to his offer is going to be less than the SEO he wants. There’s a reason whysome SEOs can charge the prices they charge and others will take any offer they get.
A few months ago Rand posted thoughts on different types of pricing models for seo including some performance based models. On the subject of profit sharing models Rand warns:
one big problem is that you’ll need to ensure that the business operations, outside of the website, are running on all cylinders, which really doesn’t fit well with the job of SEO.
Not an easy task and it has to be looked at as an additional cost for the SEO to keep tabs on the business operations of the client. If you’re going to ensure the business operations are working how much of a leap is it to run that business yourself.
Two months later at SES San Jose Lisa Barone’s note taking on the SEM Pricing Models session has Rand saying about performance based pricing:
A lot of the time, you’re getting yourself into a bad situation. You’re trying to do the counting for your client.
While commission based pricing might seem like a good idea to some on the surface, in most cases it places too much responsibility on the SEO to justify the return. I have no doubt it can work under some circumstances, but for the majority it’s only going to marry bad clients and bad SEOs.
When Commission Based SEO Makes Sense
Having said all the above there are times I would consider some kind of profit sharing seo. A client of mine has long since grown into a good friend and I would gladly help with his site for free (shhh, don’t tell him) so working for commission is an easy leap. In this case I have a great deal of respect and trust in my friend and a great desire to see his business succeed.
The SEO in me also knows he deals in a high end product/service and the commission from a single sale could pay my rent and bills for a month and we’d still likely agree to a monthly stipend in addition to the commission.
Another time it might make sense is if the site in question has a huge upside and you’re willing to take on the risk. Had Kevin Rose come calling in Digg’s early days and I was smart enough to see the potential of the site I would have certainly taken on the risk for a stake in the company. Easy to say in hindsight of course. The sad reality is that for the majority of small businesses it’s not worth the risk based on the business alone.
What Is Fair Compensation?
If you’re an SEO would you be willing to take the offer of the thread starter? The deal was for 10% of all logos sold through organic seo and the logo price was $124. To me the logos looked cookie cutter and I suspect they’re either being created through an affiliate offer or some logo creation software. The site itself has been online about two months and most of the links coming in were from low value directory like pages with all the links pointed directly to the home page of the site.
Would you be willing to take on the risk for a $12 commission on each logo sold.
If you’re a small business owner does the request sound fair? Do you think it’s reasonable to ask an SEO to set fees based on performance, perhaps with an additional small monthly retainer? Do you see seo pricing as above your means and see a performance based model as the only way you could afford seo services?
There can be a disconnect between what an SEO needs to charge and what a client is capable of paying. Can commission based seo services be a bridge? Or are some connections not meant to be made.
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That is a very interesting question. Although we do not sell seo services, some prospects ask if we would be willing to offer our conversion services on commission basis. I always tell them that this is something we would consider. However, we would only do that after three months. That way, we can get a better assessment of how much money we can expect. My question is always whether the site is getting enough targeted traffic or if they need to hire an seo company before they come to us.
So, would it make a difference if the commission was 30% and the product provided higher quality and price?
Khalid I think accepting the commissions after a few months makes more sense. Over that time you’ve gotten to know the client and should have built more of a trusting relationship. You’d also have a better understanding of their business and how that business is run.
It might make a difference if the offer was 30%. Not in the case of the person who started the thread, but it would be another factor to consider. For me it’s more about my confidence in the person or persons behind the site.
Have you accepted a work for commission deal with any of your clients?
Neil you can certainly extend the discussion to equity. My feeling would mostly be the same. I’d still need to feel strong enough in the business to want to take the risk. It definitely depends on the product and business model as well as in your confidence in the people behind the business.
10% of nothing is still nothing. So is 30% or even half the company.
Another thought is where are you in your own business. If you’ve established yourself and your business is earning revenue above a certain level you might be willing to take more risk. If you’re a small business yourself you might not be in a position to take on the risk of another company in addition to your own.
Can I extend this discussion and ask peoples opinion on taking a share in equity rather than a commission per sale.
If the business is internet only, would you come on board as a director or for a percentage of share/stock and provide your services for free in exchange for profit shares.
I probably would but it would definetly depend upon the product and the business model in place.
I did consider taking work based on commission in the past but it never really worked out. We are actually in discussions with one client right now about this so we will see where this goes. Of course if we do take commission instead of fixed cost, then we do except to make more since we are taking on some risk.
On the topic of equity, I do have some friends who offered me some equity in their startup for some marketing work. I am seriously considering that. Last time they back in 1995 I turned them down. That company was sold to Ebay. Add that to lessons I learned the hard way 🙁
I guess there are times when you should take the deal.
I think it depends on the company in question. If you’re not getting paid you have to look at things as you would any investment. If the payoff if great enough you might want to take the risk. but I think for the average client the risk outweighs the return.
Most professional SEOs would never take commissions. The reasons for this are as follows:
– They already make enough being paid difectly for their work.
– The commissions offered are too low.
– Since the SEO would not have any “control” over the other aspects of the business, they would have to rely on the site owner to make the best of any traffic/leads that were generated.
– SEOs know that in most cases, they don’t need the site owner and can enter the marketplace with an affiliate site of their own.
Asking a SEO to work on commission is generally not fair to the SEO. You are asking them to invest perhaps thousands of dollars into your site, and yet you are going to pay them back at a rate of 10% of potential sales? Why would anyone go for a deal like that with so much risk? The only way it would be worth considering is if the business seemed really good and the returns would continue for a long, long time. In that case the site owner would be paying many times what the value of the service would be worth.
We are actually trying to work with a company as a partner. We provide the consulting and SEO work and in return we will be receiving 50% of any profits from the site, and a small percentage of any sales price, should the site be sold. We are still trying to figure out if this deal makes sense. But the only way that it can work is if the site owner accepts us as an equal partner and recognizes the full value of our investment in his site. And also allows us to take part in the decisions that are made for the business.
In my not so humble opinion, any commissions should be based on traffic within defined parameters. Say a website is getting 100 hits a day from Google and I boost them to 1000 hits per day. I would take a commission based on the increase in traffic from my SEO work.
Making sales is THEIR business. As SEO my job is to boost their rankings and thus their traffic.
I’ve been there where a client thought her only problem was SE rankings. So I boosted her to top 10 on the top 3 SE’s of the time. She was happy because her sales went up along with it, but her CONVERSION rate was the same. Actually it slipped some because she was now getting more worthless traffic since she was on the front page of the SER.
On the other hand I have taken a stake in a company for doing the SEO. It turned out to be the best money I have made until the owners both got thrown in jail for non-company related issues. LOL
Steven how can a potential client find a reputable and capable SEO officer. Most people ENOCIS has found are asking exorbitant fees with no guaranteed results. Agreed the responsibility is NOT only that of the SEO but also the client. ENOCIS has been looking for someone, with a documentable track record to work with us either, on a commission basis or and equity/director and commission combination, where the SEO officer will have a vested economic interest in growth. To my knowledge http://www.enocis.org is a unique and not easily copied project of consolidation of educational opportunities for the underserved peoples of the world.
ENOCIS has been on line for almost two years and Alexa numbers are consistently higher than the same people who are supposed to be our resident expert on SEO.
Any thoughts or ideas on how to identify a credible potential candidate for SEO of this not for profit social education initiative.
I would be happy to discuss the issue of finding a qualified SEO consultant or company if you are interested. I moderate at TechSoup.org (http://www.techsoup.org/fb/) and am aware of some of the issues facing a non-profit organization in marketing their services.
I agree with most of what you’re saying. There are SEOs who work for either commission or equity in the company, though. It depends on the SEO and the company. For me it’s really the issue of control. If someone wants me working for a % of sales then I want to have control over how many sales are made.
There are deals I would take where I would work for equity, but more often than not I don’t think it’s a good idea. I’d have to really believe in the company.
Traffic is one way to price per performance. That might not be the best deal for the client though, since you could fake traffic. Still depending on the SEO and the client they could probably work something out.
I have to ask about the site owners that ended up in jail. Is it something you can share or is it best left unsaid?
I think the best way to find an SEO is the same thing you would do for many other industries. Do a little homework to start. Learn some of the basics of seo so you can ask intelligent questions and identify the obvious scammers. The basic principles of seo are reasonably simple to understand. The details can get confusing and they are time consuming.
Once you have a decent grasp of some basic principles ask around for recommendations. If you know anyone who’s hired an SEO start there. If not read some seo forums and get a feel for the members. The majority will likely offer services. Get to know some of them through their comments and decide on a few to contact.
Ask them questions and begin to establish a relationship with them. I think in many cases your instincts can guide you once you’re asking questions and getting answers.
If for any reason you feel like you can’t trust the SEO then you should probably look for someone else. Understand that no one can guarantee you results. SEO takes time and is an ongoing process. Also understand that the better the SEO the more they’re probably going to charge you or the harder it will be to get them to take you on as a client. You don’t have to spend a lot, but you have to adjust your expectations. There are ways to start slow too so you don’t necessarily have to pay a lot of money upfront.
Other than the top SEOs who have more than enough clients I think most will be willing to work with you within your budget.
OK, Gentlemen all the comments are valid and ENOCIS is prepared to work with the right SEO with reasonable terms and conditions (the SEO with adequate control, earning based upon the increase in traffic movement to the site, increase of ROI and a vested economic interest as a parter or or trustee). Steven we have done the due diligence as recommended but the university still needs to solve the basic question ” Identify and begin working with a viable, credible and experienced SEO officer” Qualified candidates willing to work on this type of relationship should review http://www.enocis.org and contact the university at email@example.com. I might note that so far the university has had higher Alexa ratings than the SEO experts applying and they could not provide verifiable references where the changes could be documented in the Way Back Machine or elsewhere.
A candidate should also have a social interest in mind because ENOCIS is a consolidator of educational opportunity for the underserved peoples of the world. We believe that the there should be no relationship between the opportunity to be educated to a students fullest ability and having the funds to receive that education. ENOCIS actively seeks out students of excellence to assist them complete their education so that they can become a service to both their nation and mankind. Education: The Tool to Break the Chains of Poverty.
I strongly recommend that you contact http://www.SEOPros.org. They have a free RFP Generator that will send out your requirements to a number of qualified companies that can provide the type of services that you are looking for, and you might locate someone that will work under the terms that you seek, but I highly doubt it.
I wouldn’t work with you based on what I’m hearing.
Oh, they were both jailed for non-payment of child support. Amazingly the wife was paying child support to her ex-husband. She lost custody of the children to him because her primary profession at the time was “exotic dancer”. After she got out of jail she entered the world of on-line porn and is doing very well financially now. I haven’t heard about her husband after he got out.
Unfortunately the business was such that I couldn’t just take it over myself.
Sounds like a mess Don. I can understand why the business venture didn’t work out. Thanks for sharing.
I did this with a guy based on % of adsense revenue and it worked quite well until the point when he implemented an adsense sharing hack that automatically paid him. At that point he didn’t depend on me to send him a check and I didn’t know how to turn of the sharing module. Suddenly, there was no more work but I was still paying out. That’s when things went bad, obviously.
It can certainly work.
Aaron I cannot tell from your comment if you were the client or the SEO. If you were the SEO, ENOCIS would protect your financial interests by give you an economic position in the university.
This stimulating conversation might become more interesting for some of you if you know that ENOCIS was recently ranked as the Number 2 Home Business for 2007 by Start Up Nation. You can check it out at the following url.
ENOCIS hopes that we will be able to successfully negotiate a working arrangement with a qualified SEO Officer on a commission/economic participation based agreement to better address the needs of the underserved.
Ouch Aaron. I can see how things went bad. That’s part of my reasoning for not wanting to work for commission or even equity except in some cases. A lot of the SEO work will be upfront with the payoff coming later. As in your case you could get cut off just as the money is about to come in. That’s why you’d need to have a trusting relationship with the business.
It can definitely work, but it won’t work for everyone.
David did you take a look at the link Chris posted above. I think it might have some information to help you in finding someone. I can’t speak for anyone else, but I’m not looking to take on work at the moment for commission or equity. I’d hope the post itself explains why. I’m sure there are some who would take on optimizing your site, but at the moment I’m not one of them.
One thing to keep in mind tho, and I think it has caused David here to have 2nd thoughts, is that getting burned can go both ways. That is why I believe no matter what, the SEO must get SOME money up front to ensure the customer is serious. Not so much that the SEO will walk away a rich man without doing any work, but enough. I charge a fairly flat rate for doing the initial setup, research etc. After that I am willing to consider commisions or a cut of the pie.
I’ve been Mr. Nice Guy tooo many times and ended up with nothing.
Good point Don. It’s one reason why I think trust is perhaps the most important aspect when reaching a decision for both the SEO and the client. I usually ask for some money upfront with payments due at natural points along the way through the process.
That way the client doesn’t have to pay too much without getting anything in return and I can assure I get paid for my work. The worst case from either side still involves some loss, but the payment schedule is an attempt to minimize how much that loss can be for both parties.
Agreed gentlemen but again the saying”you get what you pay for” is not ALWAYS true in the SEO business because there is not exactly a Martindale and Hubbell of the industry and the BBB does not actively monitor these services. The number of $2000 seems to be bandied about a lot in the US just as $500 is referred to as set up costs by companies from India. In principle, ENOCIS has no objection to either figure but then again in the real estate business that is what’s referred to as “sweat equity” A personal investment of time to receive something back as value added. If an SEO is as good as they believe they should be prepared to put their money or in this case “sweat equity” where their mouth is.
ENOCIS expects no one to work for free and we believe a reasonable return on their investment is fair. We are prepared to protect that right by reasonable percentages and participatory agreements.
Ok, that sounds great. Please state what your reasonable percentages and participatory agreements are.
To go forward without something to show for initial work, which will not result in any immediate monetary gain, would require that there just be a flat percentage of the net no matter what the SEO results are. Basically taking in a partner/co-owner who handles the SEO portion.
That is also a possibility but it puts far more risk on the original owner. SEO is a hard thing to quantify. Depending on the market you are in, you could do everything right and still not break the top 100 much less top 10 on search engines. This is why a good SE optimizer will be able to point you to the correct keywords that should bring in quality traffic.
Of course in the end, it all comes down to the product you are selling. If you have what everyone wants, no SEO is required. If nobody wants it no amount of SEO will get you traffic.
First Chris ENOCIS is not inclined to negotiate a private agreement for services on a blog but we would be willing to receive you proposal for review and consideration at firstname.lastname@example.org. Don Reasonably state with one exception, it would fairer to you to accept a portion of the GROSS as any good accountant will ensure that there is no NET profit on which ENOCIS would pay taxes. And yes, that is exactly what we would like to do, acquire a Trustee or as you state it a partner/co owner who is responsible for those services.
SEO results don’t have to be hard to measure. We don’t use ranking so that’s not an issue. We use traffic numbers before and after the site is optimized. Most clients don’t really want “rankings” anyways, they want traffic, or more specifically, conversions. Traffic should be easy for a SEO to deliver, and it will be qualified traffic if the keyword research is done correctly.
The conversions is a harder metric since it depends greatly on the site design, copywriting, and the nature of the offer, such as price. Conversions are generally NOT the responsibilty of the SEO, but they should be a concern.
We are currently working with one partner and we have a 50-50 split of income, but in this case we are providing some webmaster services as well as the marketing.
For the second partner, we are also taking a 50% cut, but it is only for the amount that is over what the site had been generating. We are getting 50% of any increased revenue. It’s not much to start with, but as long as we can work with the partner for a long period we expect to do well enough.
Chris you are correct this is not only about traffic e.g. ENOCIS receive 857 unique visitors yesterday, it is about conversions and ROI. It you want to work on percentage I suggest you FIRST quantify the value of your services and then what is a fair rate of return on your contribution. Yes, much of the work also included redesigning of pages, reworking of text to create keyword rich text etc. “it depends greatly on the site design, copywriting, and the nature of the offer”. Look forward to your response.
David, our rates are posted on our site, so that’s a known factor. What’s still a mystery to me is what you are looking for in fairly specific terms. Is our basic service enough or do you need additional services and consulting?
857 uniques in a day is about 25k a month, but the number will be inflated by a certain percentage from robots, spiders, and vistors that use proxy servers, like all AOL visitors. But let’s say you are currently getting 25k a month. About how many credit hours are purchased each month, by how many students?
I’m trying to get a sense of what your organization is doing currently and that will help me to get an idea of what the potential is for inprovement. Also, would increased donations also be a consideration, or just credit hours?
What percentage of the gross are you offering as a starting point, and just when would that become effective? Would there be any way for me to verify the financials? How long would the agreement last initially?
Depending on what has been done to the site so far, I would estimate that the qualified traffic could be increased 2-4 time what it currently is. However, if the site is not converting with the traffic is has, then it may be that having the site highly optimized would reduce the traffic numbers, but result in increase conversions.
I’m interested to keep the discussion going.
Chris let’s keep the discussion going on a more private basis. email your proposal at email@example.com. Your questions are fair questions but not in a public venue. ENOCIS needs a personalized package not one that is published on your site although it is a good guide. The number of 857 for yesterday were real clean and unique visitors. We monitor this daily and use a service which separates out our visits and robots. These are classified differently. We are looking at total gross earnings new donations and new students. If we get that far with the negotiations the books are open to the Trustees of which you would be one and the agreement COULD be perpetual. Our MAIN goal is conversion now not traffic numbers. ENOCIS is looking for second and third stage clients (comparison shopping to buy BECAUSE they already know they want the product and buyer) Look forward to continuing this further.
Don, Chris, and David. I wanted to say thanks for keeping this conversation going. I haven’t been participating, but I have been reading and there are good points being made all around.
I agree with David that if you want want to have serious discussions in regards to working together it’s best to take them private and it seems like you’re reaching that point in the conversation. However if you do end up working together I’d appreciate if you could come back and share your experience. I think it would be helpful to a lot of people.
I do hope everything works out well.
I have had a big problem with using my SEO knowledge, which I’ve had since 1984 when I began surfing what was the Internet then. I picked up a certain knowledge and now a DJ on Rocklandusa.com has taken my name and used it and said I was a SEO BLACK SPAMMER, which I am not! He has consistantly been using my techniques that I’ve bascially been doing ON COMMISSION or just for FREE, or just for me! We must all be very careful what we tell others and what knowledge and strength SEO know how is on the Net! I think DJ is jealous and his brain is smaller than mine, but I have the knowledge to make “anybodys” fingernail come up #1 google, and it would be that person that asked me to make their fingernail come up on Google. I boosted this to DJ and he took that and ran with it. Just Google my name or his radio show, and you will see what he’s done, and what I have done with my knowledge of SEO on blogging to thwart his mean spirited posts on me! Let me know what you all think!