Does anyone have any experience or know of any agencies that operate on a revenue share basis for SEO as opposed to a flat retainer? I'm thinking specifically in terms of an e-commerce site where orders can be tracked to organic traffic and specific keywords and the agency earns a percentage of the order value along the same lines as an affiliate. In my view this is a win-win in that I get to pay based on actual results and the agency is incentivised to generate quality traffic that converts but it doesn't seem to be a common approach. Am I missing something?
You mean more like an affiliate programme - paid on results. Very few SEOs would do this, as it requires huge trust with the company as they could pull out at any time. As you say, you are also gambling that they will be honest with the order tracking etc as above. Personally would rather have a stake in the business, as that would be incentive enough. Leave the business owners to handle the orders etc, and the marketing people to concentrate on SEO / getting traffic & orders. More like an 'SEO Dragon' approach (but without the wads of money upfront) Bear in mind this isn't actually SEO - it's E-Commerce - SEO doesn't mean you 'get more orders', it's about driving more traffic to your site
I think you don't get the meaning of SEO. Someone works on your site to improve its rankings in order to get more visitors. Let's say an SEO will get your site on the first position for whatever top competitive keyphrase but your site design is not attractive for visitors, your prices are toooo high, you product is not popular, etc... I'd say this is not SEO's problem if your site doesn't make money. I think you're looking for something a bit beyond SEO here, actually a full SEM thing. What you ask is to get someone to work on your site from every point of view while you come in the business just with a domain and hosting...ask yourself...wouldn't I start my own similar website instead of working for yours and sharing the profit? Hope this helps Thanks
Thanks for the feedback. loredan, I take your point about this being more than just SEO but I still believe that it can work as long as targets are set for both parties for example traffic volumes for the agency, order conversions for the business but I do realise it's a lot more complicated than that which is most probably why this model is not favoured - that and the whole trust factor as mentioned by nick279. I don't however agree with your view that I would just be bringing "a domain and hosting". An e-commerce sites involves stock management (sourcing, fulfilment, returns), transaction processing (including the risk of chargebacks, fraud etc.) customer services etc. - these are all of the reasons why marketing agencies wouldn't just start their own similar site - it's not their core business, but in a revenue share model they can earn revenue from an e-commerce site without the hassles of running the site, while focussing on doing what they do best leaving the business to focus on what it does best.
Very few SEO companies will work on this basis as it's far more profitable for them to work on other areas. Think of it this way, you offer 25% for an SEO to work on the site. Me, as an SEO confident in my ability is going to think, hang-on I can make 100% with a little investment in a good site and products. The only areas this doens't apply to is where there is some other area of competitive advantage where there is a unique product or there are high barriers to entry in the market - these are few and far between though.
Revenue sharing model is not unheard of in SEO industry but is not prevalent due to reasons stated by Loredan. A marketing firm could guarantee you qualified visitors but would never guarantee the conversion ratio as it depends on your product, price and the website itself. You could work on a model wherein (after having studies the market and keyword traffic) the SEO agrees to deliver a certain number of visitors every month, irrespective of the method of promotion used by them for a fixed price. However they would like you to sign a minimum contract to justify their expenditure in the form of resources. You could work on a initial setup fee with recurring monthly charges. I am sure you would find SEO companies willing to work under this kind of arrangement.