Digital Marketing, including search engine optimization (SEO), is currently the most competitive market in the world.
As new companies enter the market, you must find a way to attract customers.
And once you attract them, what should you do to retain them?
In this article, you’ll find out:
- How to win the battle against the competition.
- How to acquire every prospect who could become your client.
- How to increase profits through diversification of business models.
Sounds good, but first things first.
What Is an SEO Business Model?
A business model is a blueprint, operational plan for the development of a given venture.
For an SEO agency, it’s a range of services that the agency offers to clients in exchange for appropriate compensation.
For any marketing agency, it will be the services that it has in its portfolio that it offers to the client.
A prerequisite for its implementation is a client whose requirements are met within the scope of services that a given agency offers.
Finally, your client won’t pay if there’s nothing to do with it.
Nevertheless, the times when the client pays and that’s it, are over.
Writing this article, I want to show you how you can win clients and how to be one step ahead of the competition.
Although the diversification of business models is not a discovery of America, there are still agencies that have one business model: a fixed monthly fee.
But due to the competition & clients’ requirements—it’s time for a change.
1/ Retainer Model
The simplest and most frequently offered.
What is it about?
You’re setting up specific requirements with the client, and then the client pays you fixed money for them every month—that exact amount.
Fair enough?
It’s funny that just a few years ago, only such a model was known and recognized in the market.
There are certain elements that may make clients choose it. Surely, simplicity is the main one.
If you know a company that does a good job in the market and offers you a reasonable budget as part of a significant (confirmed) number of activities, then picking this model is not complicated. Exactly.
Especially if you are an entrepreneur for whom time and results themselves are less important, but you want the choice of a comprehensive solution—then this will be for you.
Why Should You Choose the Retainer Model?
Simplicity. Consistency. Predictability.
These are the 3 words I would mainly focus on. That’s not the end.
Fixed expenses: You know how much you pay each month, and that’s it. You also know what you are paying for; the contract specifies the scope of services, and that’s all. You can’t receive less or more, everything is predetermined.
Long-term relationship: This contract undoubtedly takes for granted long-term cooperation. Search engine optimization is a process that converts your client into an advocate for your brand.
Will it succeed in this model? If your SEO agency does a good job, then certainly.
Challenges of the Retainer Model
Uncertainty of results: A dissatisfied client is a certainty. What remains is their trust and willingness to keep cooperating.
Lack of organic results is a risk for both you and the client.
If the client doesn’t see results, they will tarnish your company’s reputation with a bad review if they can’t terminate the contract before its end. Therefore, you must be very assured when offering this solution.
Sales hurdles: Hell yeah, it’s a real feat to sell it. Especially if the foundation of your agency is the sales department.
Small packages—okay, it’s not a big deal. Bigger contracts, $5,000+ monthly? It can be a real chore. Your sales team can’t prepare any predictions or provide concrete data because, simply; this model doesn’t guarantee anything.
2/ Performance-Based SEO Model
So, something every client likes—I’ll pay once the KPIs are met. Sounds like a plan.
However, execution is much more challenging.
Sometimes a client may have very high expectations; ranking from 1 to 3 on all indicated keywords. On my way.
But the website is totally new and doesn’t index a single keyword.
But what if the client offers $8,000 for the result? Now that’s tempting!
Not every scenario has to be so brutal.
There are clients who already have great websites and results. They just lack good optimization and content revitalization for the results to practically manifest themselves.
This is the real essence of pay-for-performance, which is attainable.
Why Should You Choose the Performance-based Model?
When KPIs are met, you pay. You literally pay for results.
The agency is there for you, not to the contrary. You don’t have to worry that something will go wrong. If it does, you don’t have to pay a broken dime.
A certain blueprint: if you run a business (or plan to), you know how crucial a plan is. That’s exactly what you receive as part of the offer. You pay X when Y is achieved. Nothing in between.
For you, as a salesperson, the commission isn’t as favorable since it only comes once the results are achieved. But when it does come, it could be mind-blowing.
Challenges of the Retainer Model
Payment Only for Results: Sometimes it’s not enough.
Once in a while, it’s hard to say NO to your client, so you sign the contract. But the results don’t come. Even if you generate great results, it may turn out that all of a sudden, an algorithm change has buried your entire outcome.
This model is excellent, but it carries certain risks.
Time-consuming: to generate robust results.
Your specialists work, your company spends money, and due to the lack of results, you don’t receive anything in return.
Generating results sometimes takes time. However, if after an audit you see that it won’t work out—don’t go with it, or change the business model.
3/ Commission-Based SEO Model
Speaking of media buying, it’s considered number one. With SEO, it might be similar, though a bit more difficult when it comes to execution.
Assuming that the client has $100,000 to spend, and your commission reaches 20%. That means you’ll receive $20,000 every month. Not bad.
When it comes to PPC campaigns, it doesn’t get easier to earn money.
In the case of SEO, the work usually boils down to increasing results. The most common are: higher sales for e-commerce, more organic traffic, achieving a higher number of sessions, and a few more.
Advantages of the Commission-Based Model
It’s Transparent: The client has a certain budget to spend, and you receive a certain percentage of it. If your agency includes managing PPC services, then combining this model with SEO will be a pure pleasure.
The Agency Takes Care of You: a lot. When running an SEO agency, the ideal scenario is to receive a steady salary, from which you take a fixed percentage.
Its size may vary depending on the month and whether it meets KPIs, either way, it’s a win-win situation for both sides.
Potential Challenges
It’s a commission-based model, however, is a fixed monthly payment.
If your client does not notice real results, they may feel that you are simply deceiving them and will want to terminate the contract.
If you undertake collaboration in this model in a very saturated industry, add a PPC campaign to reduce the risk of failure.
Media buying can be executed ad hoc, and the client will always notice the effect in the form of traffic on their website.
4/ Project-Based SEO Model
The project-based model can be used based on specific expectations.
Here are some of them:
- website design
- content creation
- website optimization
- external link building
In exchange, the agency is paid a set, one-time fee
For both the agency and the client, it is important to set the right framework for collaboration that will be carried out.
The client has one project to execute and requires your agency to accomplish it.
This approach excels when projects adhere to predefined guidelines and avoid significant changes.
The work’s outcome is straightforward: the client pays your agency for completing the specific task.
Advantage & Challenges
Your client has specific expectations. If you can meet them, you’re both on the same side.
If your agency delivers an impressive project, you’ll have something to boast about. And a one-time fee will sweeten its execution.
There may be one hurdle: payment. The client will pay you after the project is completed.
If the resources for executing the project are too large and the client does not pay on time—your agency might face financial difficulties.
5/ Hybrid Model
Probably the most frequently chosen model by all SEO clients.
It’s simple, clear, and incentive-based.
Assuming the client has $5,000 to spend.
The fixed fee your agency receives is $1,000 (⅕ of the total), and the remaining $4,000 (⅘ of the total) your agency will receive when you achieve the KPIs.
The hybrid model is so popular because your agency receives funds regularly, and your client feels that they will pay the full amount only when the goal is met.
Why Should You Choose the Hybrid Model?
Fair Play: It is very fair for both parties and is oriented towards incentives.
It is more reliable than a mere performance-based model, as the agency receives a steady stream of funds, and the client incurs some service implementation fees every month.
Moreover, by providing this service, you will be confident that you can meet the challenge. The money is adequate, and the service will be delivered—this is what marketers and clients like the most.
Low Risk of Failure: Even if your agency does not achieve the desired effect for the client, they will not lose too much.
Of course, I assume that the results will be jaw-dropping in a very short time, but if it turns out not to be so fruitful—still, it is only ⅕ of the compensation that the client will bear.
Potential Challenge of the Hybrid Model
Black-hat SEO might come into play here.
In this model, your agency is focused on achieving possibly the fastest results. You want to get remuneration, and that is crucial.
Sometimes quick search engine optimization techniques boil down to black-hat SEO techniques.
If you present to the client exactly what will be done on a 1:1 basis, there should be no problem. On the other hand, if your agency wants to quickly achieve the goal without top-down conditions—certain risks may arise.
6/ Revenue-Share SEO Model
From the perspective of entrepreneurs, this is the most preferred solution.
Instead of a fee, or in combination with a lower fee, the agency receives a share of the client’s revenue or equity.
The idea is simple: we share what I earn. I earn, you earn too.
The revenue-share model is most often chosen by e-commerce, especially in a competitive industry.
No more results in organic growth? Search engine optimization doesn’t want to deliver more robust traffic? With the rescue comes the mutual—based on results—business model.
Advantages of the Revenue-Share Model
Transparent Collaboration: Regardless of how the agency conducts SEO, the outcome is what counts.
If the agency generates $100,000 in revenue for the store, and their commission is 15%, then $15,000 goes to the agency’s account.
Simple and without unnecessary complications.
Collaboration with Big Companies: Usually, big players prefer this model of cooperation.
The most common industries are:
- clothing brands
- shoe ecommerce
- furniture ecommerce
- pharmaceutical companies
Executing demanding projects for large companies has the potential for high earnings.
There’s something else—testimonials from giants in the industry make an impressive impact on every subsequent client.
Potential Challenges of the Revenue-Share Model
Reporting & Analysis: could be challenging.
In order for this model to be truly effective, you need full access to the results.
Your client must be transparent with you so that you know what works and what doesn’t.
If anything is hidden or access to Google Analytics is revoked, you won’t be able to monitor your earnings.
Seasonality: Depending on the industry—sales go better or worse. Unfortunately, your client can’t provide you with consistent sales. This means; the financial results of your company.
Conversely, during good months, your company may generate a larger outcome than you assumed.
However, before you engage in this model of cooperation, conduct a thorough audit.
7/ Tiered Service Packages
Tiered Service Packages: Offering different packages (bronze, silver, gold) with a set of services included in each. Clients can choose a package that fits their needs and budget.
Technically, this collaboration model is similar to the retainer model, with the possibility of choosing a solution dedicated to the client’s budget.
The SEO agency offers various models: e.g., bronze, silver, gold, each with a designated number of services and a monthly fee.
At first glance, this seems like a very simple and convenient solution.
However, it may seem a bit cliché and inadequate in light of today’s market demands.
Why Should You Choose the Tiered Service Packages?
Simplicity in Choice: This is probably what speaks in favor of this model.
If you are an entrepreneur for whom SEO will not be the foundation, but “it’s good to have something”, then this solution is for you.
Such a solution can also turn out to be adequate for you to holistically outperform the competition.
Usually, such a gold package includes various services: content marketing, website optimization, keyword positioning, and some more, so it may turn out to be a saving grace for you.
Why You Shouldn’t Choose the Tiered Service Packages?
Does Your Business Really Need It? Choosing the Tiered Service Packages (TSP) model for SEO can be limiting due to its generic, one-size-fits-all approach.
While your business may require a tailored solution, TSPs can often be too broad and not aligned with current search engine requirements.
Additionally, they can lead to overspending on unnecessary services or underinvestment in crucial areas. Before choosing this model, discuss with the agency the essential services for your business and, if possible, select only those.
8/ Pay-Per-Lead Model
This model can be similar to PPC campaigns, but based solely on organic traffic.
The agency performs as many search engine optimization tasks as possible, but the outcome is one: conversion.
The agency individually determines the conversion. It can be:
- Registration (Cost Per Registration, CPR)
- Installation (Cost Per Install, CPI)
- Sign-up (Cost Per Lead, CPL)
- Sales (Cost Per Sale, CPS), and a few more.
After determining the conversion, the client pays your agency exclusively for its outcome.
Why Should You Choose the Tiered Service Packages?
You Know What You’re Paying For and what the outcome will be. And if there isn’t one—you won’t pay.
Indeed, in the case of search engine optimization, organically acquiring a lead is more expensive because it requires more work to obtain. But in terms of quality, leads from SEO are better and warmer than those from media buying.
Pay-Per-Lead Model: Challenge(s)
The waiting time doesn’t speak in favor of this model.
Acquiring an organic lead requires more effort and financial resources.
Regarding finances—while a lead from organic traffic is certainly of higher quality, it is definitely more expensive.
Finances and time may actually be the only two drawbacks.
9/ Hourly Consulting Model
In this approach, the agency and client settle on a per-hour payment.
The client talks about their needs with the SEO agency, and based on its expertise and experience, the agency appropriately prices the project.
The agency keeps track of the hours dedicated to the client’s tasks and bills them accordingly.
This model offers flexibility and clarity and is usually affordable for all-size businesses.
Hourly Consulting Model: Advantages & Considerations
While choosing an SEO agency, you know upfront how much you will pay and for what. This model is clear and predefines the work and its cost. This makes it the most transparent of all the SEO models on the market.
Challenges with Hourly Consulting Model
By choosing to pay by the hour, you pay only for the time, not for the actual result. In SEO, it’s really about quality, expertise, so paying hourly can be a hassle for your business.
When opting for this model, you must have a very precise specification of what you will receive within the hourly project. Only such an approach ensures that the collaboration can be profitable for both sides.
10/ À la Carte Services Business Model
Let me call it this way.
À la carte services is an editable business model, tailored to the client’s needs.
By design, this model is billed on a monthly, subscription-like basis and includes a range of services as a standard, which can be freely edited.
Larger SEO agencies, which have specialists in several fields such as organic search engine optimization, performance marketing, email marketing, and social media marketing, often include this business in their portfolio.
But, I assume, they name it as they wish
Clients, seeing the services, select those that are important to them. In collaboration with a dedicated specialist, they decide on the services that are appropriate for their industry, competition, and budget.
Advantage & Challenges
This model is adequate, well-thought-out, and meticulous. I suppose that many agencies offering it receive plenty of signed contracts.
The only downside is that it is still a monthly, upfront payment. You pay for certain services without any guarantee in SEO.
The choice is yours, but among all the pre-paid business models, this is the one I’d recommend to you.
Wrapping Up
The choice of a business model depends only on the policy of the company. If management wants to reach out to plenty of customers, they’ll adopt various SEO business models. If they want to focus on simple earnings with a limited customer base, they’ll choose a dominant model. I assume you already know the answer—monthly fixed subscription.
And what Search Engine Optimization business model would you choose?
Answer in the comments.
And if you liked it—share it with your audience. I would be very pleased.
If I can help you with SEO or Content Marketing—hit me up on LinkedIn or X.
P.S. I’d really appreciate a small boost of energy in the form of a good latte! 😉 Link below 👇
Thank you for reading,
Simon
Author Profile
- Simon Gorlak is a Digital Marketing Expert with over 8 years of experience. He specializes in 3 areas: SEO, Copywriting, and Email Marketing. Simon's blog gathers knowledge that helps Marketers & C-level to increase profits from their online businesses. Also, his content helps to reach the most difficult customers, make others' content to be read & purchased. Besides digital marketing, Simon speaks 4 languages: English, Spanish, Portuguese, and Polish & works as a Head of Business at an Indian Start-up.
Latest entries
- October 15, 2024Social Media Tools9 Best Strategies to Generate B2B Leads on LinkedIn
- September 17, 2024Email MarketingEmail Marketing: The Most Comprehensive Guide (+ Tips)
- September 13, 2024SEO for Business6 Key Elements of an Effective SEO Product Description
- September 9, 2024SEO for Business5 Expert Tips on How to Double Traffic with Graphics