of keywords ranking in top 3, top 5, top 10 positions

What is Pay for Performance SEO?

Pay for Performance (PFP) SEO is a model where you only pay your SEO provider when they achieve pre-defined performance goals. Unlike traditional SEO pricing models that charge recurring fees regardless of results, PFP directly ties payments to the SEO outcomes delivered.

Here‘s how it typically works:

  1. You and your SEO provider agree on specific SEO goals, such as increasing organic traffic, rankings, or leads from organic search.
  2. Metrics are defined to measure progress against those goals, like traffic growth %, # of keywords in top 10 rankings, non-branded organic leads, etc.
  3. A payment structure is established that links achievement of the target metrics to payments. Often this involves bonuses or higher fees when goals are met.
  4. The SEO work is implemented and performance is regularly measured against the target metrics.
  5. You pay your provider based on their performance as evaluated by the agreed-upon metrics and payment terms.

The PFP model helps align incentives between you and your SEO provider. Since they only get paid well when they deliver results, they‘re motivated to implement SEO strategies that will drive maximum impact for your business. It ensures they have "skin in the game."

Diagram of the Pay for Performance SEO model

Benefits of Pay for Performance SEO

There are some compelling reasons to consider using a PFP model for your SEO:

  1. Accountability: By tying payments directly to results, PFP holds your SEO provider accountable for their work. They can‘t simply go through the motions—they must continuously drive improvements to your organic KPIs. It keeps them laser-focused on the metrics that matter to your business.

  2. Alignment of incentives: PFP ensures your SEO provider‘s incentives are aligned with yours. They succeed when you succeed. This helps prevent the all-too-common situation of paying substantial fees for SEO without seeing a tangible impact.

  3. Mitigated risk: PFP reduces your risk in engaging an SEO provider. Since you‘re not locked into significant recurring fees regardless of performance, you only pay when real results are achieved. This can make it easier to get buy-in for investing in SEO.

  4. Transparency: PFP necessitates transparency in SEO activities and results. To implement PFP, you must have clear visibility into what your provider is doing and the outcomes. This helps build trust and confidence that your investment is generating returns.

  5. Efficiency: The PFP model motivates efficiency in SEO execution. Providers can‘t afford to waste time and resources on low-impact activities—they must focus on the highest ROI opportunities to achieve the target metrics and earn their fees. This can lead to streamlined, high-value SEO.

Potential Drawbacks to Consider

While PFP offers significant benefits, there are also some potential drawbacks to keep in mind:

  1. Longer sales cycle: Defining, negotiating, and agreeing on the specifics of a PFP arrangement can extend the sales process compared to simply signing up for standard monthly SEO services. Be prepared to invest time upfront establishing the model.

  2. Lack of standardization: Unlike traditional pricing, there isn‘t a standard template for PFP SEO arrangements. The performance metrics, payment terms, and contract stipulations can vary widely. This lack of standardization can make it trickier to evaluate and compare PFP proposals.

  3. Limited provider options: Currently, only a minority of SEO providers offer true PFP models. Many are hesitant to embrace full accountability for results. This can narrow your options if you‘re committed to PFP.

  4. Potential for misaligned goals: There is a risk of your provider optimizing for vanity metrics or short-term results to get paid rather than focusing on the long-term organic success that really matters for your business. Careful goal-setting is a must.

  5. Unpredictable costs: With PFP, your costs can scale up and down unexpectedly based on performance. While this ensures you‘re getting value for your investment, it can make budgeting less predictable than paying steady retainers.

So while there are compelling reasons to use PFP for your SEO, it‘s not a panacea. You‘ll want to thoughtfully weigh the pros and cons based on your unique priorities, risk tolerance, and budget considerations.

Tracking Performance with PFP Checker Tools

PFP SEO relies on having accurate, reliable data on performance against the target metrics. That‘s where PFP checker tools come in. A PFP checker is software that automatically tracks your organic search KPIs and visualizes progress toward the SEO goals you established.

For example, a PFP checker can track metrics like:

  • Total organic sessions
  • % increase in organic traffic
  • Organic conversion rates
  • Domain Rating (DR)
  • Page speed scores
  • Core Web Vitals

Example dashboard from a PFP checker tool

By providing a real-time window into your SEO performance data, a PFP checker enables you to hold your provider accountable to their targets. It offers an objective view of your SEO progress completely untainted by any manipulation or adjustments from the provider.

Using a PFP checker also streamlines performance reporting. Instead of spending hours wrangling data from different sources to gauge SEO results, you and your provider can simply consult the PFP checker as the "single source of truth."

Considerations for Implementing Pay for Performance SEO

If you‘re interested in exploring PFP SEO for your business, here are some key considerations to keep in mind:

  1. Get stakeholder buy-in: Ensure all relevant decision-makers understand and agree with the PFP model you‘re proposing. Since it diverges from standard SEO agreements, you may need to spend time educating your team on the benefits and how it will work.

  2. Be realistic about goals: It‘s crucial that the SEO goals you establish are ambitious but realistic. Don‘t expect 10x growth in a matter of months. Look at historical benchmarks and organic search trends in your industry to inform achievable targets.

  3. Choose your metrics wisely: The metrics you choose to measure SEO success will heavily influence what your provider prioritizes in their work. Focus on KPIs that are true indicators of organic search value, like qualified organic traffic, conversions, and revenue. Avoid vanity metrics.

  4. Get specific in your agreement: Ambiguity is the enemy of effective PFP arrangements. Be exceedingly clear in defining the target metrics, payment triggers, and verification sources. Specify scenarios like what happens if goals are narrowly missed or how pricing may scale with exceeding different thresholds.

  5. Find the right incentives: Structure your PFP terms to adequately incentivize your provider. If bonuses for achieving goals are too small, it may not be worth the extra effort and risk for the provider to strive for stretch targets. Graduated bonuses can help align incentives.

  6. Maintain flexibility: Establish a cadence for reviewing your PFP terms and make sure there are provisions for adjustments. As your business evolves and you gather data on what realistic SEO progress looks like, you may need to modify the performance targets and payment triggers.

  7. Commit to the long haul: PFP can drive great SEO results, but it‘s not a silver bullet. SEO still requires patience. Avoid falling into the trap of adjusting strategy every month in response to PFP metrics. Give your provider sufficient time to implement initiatives and allow them to bear fruit.

PFP SEO Case Studies and Examples

To further illustrate the potential of PFP SEO, let‘s look at a couple real-world examples of companies that have used this model successfully:

Case Study 1: PFP Powers 77% Increase in Organic Traffic for SaaS Company

A B2B SaaS company engaged an SEO provider on a PFP model with the goal of substantially increasing organic traffic and leads. The 12-month PFP agreement included bonuses for hitting specific organic traffic and MQL targets.

By tying the provider‘s compensation directly to traffic and lead goals, the company was able to motivate the agency to deliver substantial results:

  • 77% increase in organic sessions
  • 113% increase in organic conversions
  • 12 high-volume target keywords ranked in top 3 Google positions
  • 41 priority keywords ranked in top 10

Thanks to the PFP structure, the company achieved these results with minimal risk, as they only paid top dollar once the provider demonstrated measurable success. The provider earned lucrative bonuses, but the company achieved an ROI of over 11x on their total SEO investment.

Case Study 2: Ecommerce Retailer Uses PFP to Drive 193% Growth in Organic Revenue

An online retailer of home goods wanted to drastically increase the share of revenue coming from organic search. They engaged an SEO provider through a PFP agreement that tied bonuses to year-over-year organic revenue growth.

Motivated to drive more transactions and higher AOV, the SEO provider was able to help the retailer achieve:

  • 193% increase in organic revenue
  • 41% increase in organic conversion rate
  • 109% increase in organic traffic value
  • 362% ROI on their PFP SEO investment

By aligning the provider‘s incentives with their ecommerce KPIs, the retailer ensured the SEO strategies focused on driving bottom line impact vs vanity metrics.

Getting Started with Pay for Performance SEO

Ready to explore using PFP for your SEO efforts? Here are some tips for getting started:

  1. Benchmark your current performance: Analyze your organic search metrics to establish a baseline of current performance. This will be crucial for setting realistic PFP goals.

  2. Outline your goals: Determine what you want to achieve through SEO. More traffic? More conversions? Make sure to get specific on what success looks like.

  3. Vet providers: Not all SEO providers will be open to PFP. Reach out to your network for referrals to agencies comfortable with this model. Ask for case studies of their PFP results.

  4. Negotiate your agreement: Work with your chosen provider to hash out the specific terms of your PFP agreement, including goals, metrics, payment structure, and tracking/reporting provisions.

  5. Implement tracking: Invest in a robust PFP checker tool to monitor progress against your organic KPIs. Ensure all parties are comfortable with the tracking setup.

  6. Collaborate and communicate: PFP is a partnership. Maintain open lines of communication with your provider and schedule regular check-ins to assess performance and make joint optimizations.

Pay for Performance SEO can be a powerful way to maximize the impact of your organic search investments. By tying provider compensation directly to your target KPIs, you can ensure your SEO dollars are efficiently driving the marketing outcomes that matter most to your business.

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