No one in the industry can answer it.
It depends… comes up here more often than anywhere.
Learn about 3 main business models in SEO that you need to know to find the right answers.
Retainer Model
The monthly subscription model is still the most commonly sold and, therefore purchased, SEO model in Europe & in the US.
SEO companies rely on it because it is simple to implement and sell, and customers often buy it without much research, believing that it will lead to increased sales for their websites and e-commerces.
Is it always the case?
Not necessarily. In the case of subscription payments, it happens less often than usually.
Offer Overview
If company X offers solutions XYZ for a certain monthly payment, regardless of the results of their work, you must bear that fee.
From my experience, I can say that subscription model is most often based on 3 pillars:
Positioning for certain keywords & website optimization
1/ Selection & keyword positioning:
a) Optimizing your website for specific keywords.
2/ Content building:
b) Developing content for your website or e-com.
3/ Website updates:
c) Regularly updating and maintaining your website.
4/ Link building:
d) Building relevant links to your website from other sources.
Social Media Management
1/ Social Media Profile Creation:
a) Creating social media profiles for your company if you don’t already have them.
2/ Social Media Content Updates:
b) Posting regular updates and content on your social media profiles.
Reporting
1/ Providing reports on the performance of your online presence.
2/ Scheduled Reporting:
a) Sending reports at regular intervals, typically as defined in the contract (usually, twice a month).
Some companies include a Google Ads campaign as a bonus. It’s usually a one-time $250 credit, free of charge for the client. However, because it’s free for the client, it’s rarely offered.
At first glance, you might say, “Wow, that’s a lot of services!” But upon closer research, you’ll understand that it’s not really a “wow” offer.
And you’re right—there is no website audit included. In fact, no at all. Why?
In a matter of subscription, audits are generally not conducted because a good audit would identify elements missing from the website, and highly technical issues are usually beyond the scope of a subscription.
In that scenario, the salesman would have to educate the client about it. This might prolong the sales process, and there’s a risk of giving the client too much information, which could make them decide not to use the company’s services.
Back in 2015, when I started working in the SEO industry, the subscription model was rampant—everyone client wanted to choose it. Literally.
An invoice depends on results? Don’t joke around.
No one even suggested such a solution. Perhaps 1 out 20 companies provided this kind of option.
Even when I started talking about the right solution with my (potential, yet) client, I’ve got situations where he said; “You know what, I have $300, and I want 30 keywords for that price. If you can do it, I’ll take it.” Intriguing, you have you admit.
Today, the market, client expectations, and their awareness have changed significantly. That’s why subscriptions are fading into obscurity.
But don’t get me wrong—it doesn’t mean that this model is a complete failure.
There are still companies (and let’s be honest; most of them) that offer subscriptions.
It’s a straightforward sales model, and something you might not have been aware of, but in the majority of SEO companies, at least in Europe, a huge chunk of their money comes from sales departments. Not from the SEO expertise itself. Surprising, isn’t it?
I’m currently writing from Poland, so speaking of Poland; I’ve come across one company that truly did a great job. They got a few clients, but all of them were 100% satisfied, and they did excellent work for them.
Of course, not every client will be satisfied. If a client encounters a not-the-best salesperson along with a lousy SEO specialist, you can almost guarantee a complaint.
So, what should you do?
Delve into details, make a deep research, and choose a subscription solution when you know that:
- The company you’re choosing has experience with this model.
- They have satisfied customers in this model.
- They have an experienced team of specialists.
Let’s face it; for SEO agencies, the requirements are similar to those in search of a software house: specialists must be well-experienced (the more years in the industry, the better), knowledgeable, and business-oriented.
Nobody wants to talk to someone who knows what they’re doing but doesn’t understand how it can translate into profits, right?
What You Pay For: Subscription in Practice
Let me present it to you with an example of 12 keywords.
Imagine you’re running an online store that sells pet products, especially for dogs. You offer dog food, leashes, and many similar items.
You’ve sent a request to an SEO company (or you got your favorite cold call :)), and you discuss your business.
Furthermore, you hear the offer, and you can afford it. As part of the offered price, you receive this list of 12 keywords:
| No. | Keyword | Volume |
|---|---|---|
| 1 | dog food | 110,000 |
| 2 | muzzle | 27,100 |
| 3 | leash | 22,200 |
| 4 | food for dogs | 3,600 |
| 5 | toys for dog | 720 |
| 6 | bone for dog | 590 |
| 7 | how to feed a dog | 260 |
| 8 | muzzle for a dog | 260 |
| 9 | healthy food for dog | 170 |
| 10 | cheap food for dog | 20 |
| 11 | what a dog should eat | 20 |
| 12 | meat for dog | 10 |
All-in-all, the keywords are good because :
- Each of them aligns with your product range.
- They are highly searched for on a monthly basis.
- They have business relevance.
That’s roughly how using a subscription offer works. You get specific keywords and pay for them, regardless of your position in search results & financial outcome.
Important: Always remember to choose keywords with a monthly search volume (as in my example above). What’s the point if you get from an agency 1,000 keywords for $500 per month if no one ever searches for them?
Non-negotiable Agreement
Ohh, really? What does it mean?
Contracts for subscriptions have always been a tough nut to crack.
The same conditions for everyone, a contract set for a fixed term (usually a year), and that’s it.
For the salesman—a great option and good money, and for the business owner—in many cases, a year with no way out. Provided there were no results. If there were results and the return on investment was attractive; let’s go for more!
When choosing a subscription contract, establish mutual terms. As a client, don’t suggest a two-week notice period, but also don’t sign a multi-year contract (without prior knowledge of the company).
Negotiable terms are crucial to ensure you have the flexibility to chase for results. And if they are not achieved, it prevents the SEO industry from getting additional damage through unfavorable reviews.
Indeed, over the years, contracts have become flexible and more attractive. SEO companies find it easier to generate results with years of accumulated practice, established SEO backgrounds, and experienced specialists, while clients find it easier to switch from average to desired results. And that’s definitely a good step.
Subscription-based Model: Pros & Cons
Would choose it? If so, then why?
Pros:
Consistent Effort: SEO is an ongoing process that requires regular updates and maintenance. Subscriptions ensure that your website receives continuous attention and optimization, helping you stay competitive in search rankings.
Cost Predictability: You pay X monthly and that’s it. Subscription-based SEO services often come with fixed monthly fees, making it easier to budget and plan your expenses without unexpected costs.
Access to Experts: Many SEO subscription services provide access to a team of experts with diverse skills and experience in various aspects of SEO, including content creation, link building, and technical SEO.
Regular Reporting & Monitoring: They are always on time. Subscription services include regular reports and performance monitoring, allowing you to track your website’s progress and the impact of SEO efforts.
Time Savings: Outsourcing SEO to a subscription service frees up your time and resources, allowing you to focus on other critical aspects of your business. Usually, before signing the contract, you’ll know how many specialists will take care of your project. 3 specialists it’s a bare minimum.
Cons:
Long-term Commitment: Count at least a few months. Subscriptions typically require a long-term commitment, which might not be suitable for businesses with fluctuating budgets or short-term goals.
Costly Over Time: While monthly fees may seem manageable, the cumulative cost of a long-term subscription can be higher than a one-time SEO project.
Limited Control: With a subscription model, you may have less control over the specific strategies and tactics employed by the SEO service, as they often follow their own methodologies (but sometimes it costs an arm and a leg).
Don’t Expect Results Right Away: But you know it. SEO is a gradual process, and significant improvements may not be immediately noticeable, which can be frustrating if you expect quick results.
Potential for Generic Strategies: Some subscription-based SEO services may use generic, one-size-fits-all strategies that may not be tailored to your unique business needs and goals. Somebody pays $400, while the other clients $2,500? No worries, for everyone equally.
Risk of Dependence: Relying solely on a subscription service for SEO may create a dependency, making it challenging to bring SEO efforts in-house or switch providers if needed.
Lack of Transparency: This is where the challenge arises. Depending on the provider, you may not have full visibility into the specifics of the work being done, which can lead to concerns about transparency.
Hybrid
Here, the situation is usually less straightforward.
This time, the subscription also takes place, but in a much smaller form.
If I were to represent the hybrid model with a mathematical equation, I’d write it as follows: Hybrid = Subscription + Results
The proportion often looks like this:
- Total budget: 5/5
- Subscription: 1/5
- Results: 4/5
So if the total budget for your SEO is $2500 per month, you pay $500 every month, and an additional $2000 only when the company achieves the set results for you.
And what are those results?
General Overview
Imagine that you have specific keywords set up with an agency.
These are 12 keywords relevant to your business.
After verification by the agency, your website ranks at the specified positions, as shown in the table.
| No. | Keyword | Your Website Position | Volume |
|---|---|---|---|
| 1 | dog food | 96 | 110,000 |
| 2 | muzzle | 86 | 27,100 |
| 3 | leash | 104 | 22,200 |
| 4 | food for dogs | 55 | 3,600 |
| 5 | toys for dog | 48 | 720 |
| 6 | bone for dog | 65 | 590 |
| 7 | how to feed a dog | 81 | 260 |
| 8 | muzzle for a dog | 75 | 260 |
| 9 | healthy food for dog | 59 | 170 |
| 10 | cheap food for dog | 21 | 20 |
| 11 | what a dog should eat | 11 | 20 |
| 12 | meat for dog | 52 | 10 |
Following this, within the hybrid model, the payment structure operates in the following manner: the agency optimizes your keywords, and if they rank in positions 7-10, you pay a certain percentage of the total budget. If they rank in positions 4-6, you pay a higher sum in total.
The ultimate boss is position 1-3 for all keywords. This is what the agency is getting at. In that case, you’ll pay 100% of the agreed-upon budget.
Of course, my budget is arbitrary because for the described keywords and the location I chose (USA), you would have to pay remarkably more.
Breaking into the number 1 position in the USA for a keyword like “dog food” would be impossible due to “aggregators,” which are multi-industry platforms like Amazon.
These platforms offer a wide range of products from various industries, making it impossible for a standard online store to compete due to their extensive content and growing product catalogs.
In a nutshell: You pay more, only when the results are achieved. If nothing changes, the agency gets the basic remuneration, you pay nothing beyond that.
Hybrid: Diversified Payment Model
In the hybrid model, you have much greater flexibility in terms of payments.
The complete payment depends on reaching 100% of the KPIs specified in the contract.
Website visibility for specific keywords is the most common payment model in the hybrid solution. Naturally, a high position for up-and-coming keywords by default guarantees traffic to the website. However, this isn’t always taken for granted.
Sometimes agencies rely on selecting less competitive keywords that are easier to rank for, but as a result, your website may not generate the desired traffic.
Furthermore, the agency might choose keywords for which your website is already ranking high, at least in the top 10. As a result, they have already secured additional income from meeting the KPIs from the beginning of the partnership. That’s why the client’s knowledge and the agency’s competence are crucial before signing the agreement.
If keyword selection is challenging (for various reasons), the hybrid model offers several solutions:
- Payment Based on Traffic Growth: At the beginning of the collaboration, the default traffic generated by the client’s website is established. The agency receives additional compensation based on a growth percentage (X%) in the following months. The higher the traffic on the client’s website, the greater the agency’s earnings.
- Payment Based on Session Growth: Not only traffic but also sessions are counted. This is undeniably a more complex model. Session duration can vary depending on the website’s settings or data analysis tools. Sessions are considered more qualitative than traffic itself.
- Payment Based on Sales: The more the client earns, the more the agency earns. At first glance, it may seem simple, but it is challenging to implement. It requires complete alignment between the client and the agency, especially in terms of the agency’s access to the client’s analytical tools and their full impact on sales growth.
Your Rules = Your Agreement
Undoubtedly, in this model, the contract must be tailored to your requirements.
Not just your requirements, but also the starting point for your collaboration with the agency.
Your collaboration depends on their performance but also on your engagement.
Why client’s engagement?
If you provide the agency with complete access to your website, you can be sure that they will take care of the work and deliver the results.
However, there are situations where clients are reluctant to provide complete access (they don’t grant access to the CMS), so the agency sends the client what they need to add to the website. This is in the form of copy-paste.
What About Contract Duration?
I don’t recommend contracts longer than 6 months, even those that are performance-based. We’re aware that a lack of results can have adverse effects on both parties.
There are situations where the client pays a certain amount to the agency, but due to their constant communication, additional work requests, and ongoing issues, it costs the agency much more effort than their earnings from the client.
On the other hand, if the agency charges 1/5 of the total budget every month, eventually, it’s 1/5 of the entire budget that you have you pay every single month.
Individual and transparent terms of agreement are key.
Hybrid-based Model: Pros & Cons
This is how it goes when the robber hits the road.
Pros:
Flexibility: You can adapt your SEO strategy to your specific needs. For critical tasks, you can handle them in-house, while outsourcing non-core tasks or seeking specialized expertise when necessary.
Cost-Efficiency: By handling essential SEO tasks internally, you can potentially reduce costs and maintain control over your budget. And more importantly—the majority of the budget, you pay once the KPIs are met.
In-House Control: You have direct oversight and control over your in-house SEO efforts, ensuring that your team is aligned with your brand’s goals and values.
Engagement: An agency gets money for achieved results, so you can rely on their constant engagement in order to receive a full-paid invoice from your end.
Risk Mitigation: If one aspect of your SEO strategy underperforms, you have the flexibility to adjust and optimize it without disrupting the entire operation.
Cons:
Complexity: Managing a hybrid model can be more complicated than choosing a single approach. It requires careful coordination between your in-house (if you have one) team and external partners.
Resource Allocation: Determining which tasks to handle in-house and which to outsource can be challenging and may require constant evaluation and adjustment.
Integration Issues: Integrating the efforts of different teams or agencies can be challenging, and it may take time to establish smooth workflows.
Algorithm changes: It always works both ways. Sometimes, a Google algorithm update can make your client pay you 100% of the budget overnight, but it can also mean that 100% of your work goes to waste.
Result-Based Payment
Only. And that’s the game-changer.
How many times have you wondered how to pay only for results?
No worries, there’s a solution on the market.
Offer = Just Results
Sounds beautiful, doesn’t it?
Imagine—you pay solely for results. And that’s exactly what happens.
Of course, this model has its limitations. Not every online business is suitable for it.
The settlement of the only-performance-based model works only for local businesses.
The most common ones:
- Dentists.
- Tow truck drivers.
- Local cafés and restaurants
- Locksmiths
- Lawyers (here, I’d even target specific districts)
- Mechanics
And other similarly local businesses.
You can ask—why only local businesses?
For businesses operating nationally, this will never work, especially for the e-commerce industry.
This principle is mainly normalized by the pigeon algorithm.
Established in 2012 by Google to support local businesses. Previously, only major players could compete for positions on the internet. Now, anyone can compete for equally high rankings.
However, this algorithm ultimately boils down to location-based results. As a user, you can see two entirely different results, even when searching for the same phrase a few hundred meters apart.
That’s why a results-based solution cannot be implemented for every online business.
Payment: It’s All About Results
In a nutshell, payment is solely based on results. Nothing more.
There are no base fees, subscription fees, or any other charges that make you start counting your money.
—> Why are agencies open to such a solution?
When a client with a website that has great potential online appears, sometimes boosting their online presence in a short period is just a formality. In such a situation, this model makes another client for the agency and an additional, almost guaranteed, source of income.
—> Why would a client want to choose such a solution?
The answer is self-explanatory: you pay only for the results. It’s like going to a restaurant and paying only after you’ve tasted the food and liked it. Who wouldn’t choose that?
As a client, you must familiarize yourself with the techniques the agency will be using during the results’ generation stage.
With this model, black-hat SEO, methods that go against Google’s policies and could get your website into the top 10 very quickly but then result in penalties from Google shortly after, used to be quite common. Subsequently, all the results would be lost.
The truth is, agencies generally don’t use this methodology anymore—no one wants to deal with dissatisfied clients and negative PR.
Agreement: Always Individual
This point is unquestionable. In the case of payment based on results, the agreement must be individually prepared.
The purpose is to protect both the client’s and the agency’s business and achieve the highest possible results without the risk of carrying out SEO that doesn’t result in a tangible business effect.
The key at this stage is:
- Selecting the right keywords—searchable & with a business potential.
- Verifying the current rankings for the client’s website on those keywords.
- Establishing appropriate compensation for keyword positioning and determining the (expected) time for their implementation.
In practice, in this model, you settle with the agency solely based on results. You pay only for the outcome, so you won’t pay a broken dime until you see your website ranking high.
Therefore, the length of the contract, whether it’s 3 or 30 months, doesn’t matter that much.
However, when the result is achieved, invoices are usually higher than in any other model, but that shouldn’t come as a surprise.
Certainly, you want the freedom to terminate the contract and switch to another agency at any time. Of course, you have the right to do so, which is why the contract duration is agreed upon by both parties.
In the end, every agency wants to retain a client for as long as possible, with the potential for substantial earnings.
Result-based Model: Pros & Cons
Even if you pay only for specific results, there are pros and cons to consider.
Pros:
Results-Driven: Many contacts can be results-driven, but that one wins undoubtedly. It aligns the interests of the client and the SEO agency, as both are motivated to achieve tangible and meaningful results.
Performance Incentive: SEO agencies are incentivized to continually improve their strategies and stay updated with industry best practices to deliver results.
Flexible Budget: You can allocate your budget more effectively, as you pay only when specific milestones or goals are met. And surely—you know from the beginning what’s the maximum that you’ll pay when the KPI is met.
Accountability: The agency earns only when they meet the settled KPI. You, as a client, know what the agency wants to do it, and the agency strives to accomplish it at all costs.
Cons:
Complex Metrics: Determining what forms a “result” can be challenging. Metrics and KPIs need to be clearly defined in the contract.
Limited Scope: This model may not be suitable for all types of businesses or industries, especially those with highly competitive keywords or complex SEO requirements.
Higher Costs: In some cases, the overall cost of SEO services might be higher under this model if significant results are achieved quickly.
Client Expectations: Clients might have unrealistic expectations and expect instant results, putting pressure on agencies to deliver quickly.
Takeaways
Each of the above-mentioned SEO business models has its advantages and disadvantages.
Moreover, not every type of online business will find each of these models suitable.
Before signing the contract, contact with the agency, conduct a thorough audit, and then, with a clear picture of the collaboration—choose the best solution.
There are many options to choose from.
Now you’ve got anything to know on how to buy SEO.
Do you still have any concerns before buying it?
Is there anything you’d like to bring up?
Let me know — I’d willingly write about.
Hit me up on LinkedIn or X, or simply leave the comment below.
P.S. Don’t forget to share it!
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, Lead Generation on LinkedIn, 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
Buying SEO is difficult, you never know which agency is the best. Thanks sir for clarifying it.