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yellowwing
Joined: May 21, 2002
# Posts: 2526
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Posted: 2003-Sep-17 12:15
I've come across a few methods of compensation of SEM services:
1. Down payment + monthly maintence fees = Short term income, good long term income
2. Down payment + balance upon reaching guarantees = Short term income, but could be cheaper for the client
3. Down payment + PPC method based upon SE visitors = Short term income, more ROI reassurance for the client
4. Zero down + any of the above three = Greater flexibility for client terms
5. Percentage of sales = No short term income, could be more money for the SEM, more ROI for the client.
Has anyone had experience with other methods?
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thejenn
Joined: Aug 08, 2001
# Posts: 9196
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Posted: 2003-Sep-17 13:51
I'd also be interested to know who operates under what model and why they chose that model...
We operate under the #2 method for a couple of reasons. First, since we're spreading payment out over time, it makes it more affordable for clients, it also gives us a guarenteed cash flow month over month and an idea of how many hours each project is going to take.
Second, while I believe that initial optimization is the essential part of any SEM campaign, I believe there are several things that need to be handled on an ongoing basis. When I refer to a "monthly maintenance" package, I'm not talking resubmission and rank reports.
We find that the best overall results come when we dedicate time each month to:
1.) Tracking rankings so that we can make adjustments if/when algorithms change, or if we see a way that we can move the client up further in the rankings.
2.) ROI analsys of search engine traffic and PPC traffic. This helps clients understand what areas of their business are performing well, where they should cut back spending, where to increase spending, etc...
3.) Ongoing link building and on-line placement. This goes beyond asking for reciprocal links and verges into the realm of public relations. We seek out sites that may want to feature product reviews, guest articles, news stories, etc.. about our clients. THere are always new opportunities here, so it needs to be ongoing research
4.) Usability and traffic flow analysis. Beyond the simple ROI of a site, we almost always build in usability analysis services. If folk aren't making it past your front page, what can we do to solve this? This includes testing different messages, testing landing pages with PPC campaigns, tweakign layouts, wording, etc... for better performance.
So I suppose the monthly maintenance stretches beyond "SEM maintenance" and really turns into ongoing consulting on your online marketing, but it helps us better serve the client and helps them be better prepared and see higher returns on their marketing investments.
What about the rest of you? What method do you prefer and what made you reach that decision?
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Logan
Joined: Aug 14, 2002
# Posts: 3749
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Posted: 2003-Sep-18 16:05
I've been around the block with them all and those are good points. More and more I'm moving toward ...
#5 - I realize it is not typical - but I've recently turned to using this method in select cases. I've found it to be a true breath of fresh air, and the money has taken care of things (the value of patience) is excellent for the long term. I've also found the dynamic to change between my services and the clients. Because I have a vested interest, the communication lines seem to open up easier - and more importantly they seem more in tune to making major changes to do the whole thing right, versus cobbling together some 'optimized pages'. It does take time though, but that is the case nonetheless.
One suprise along the way when implementing this aproach from a revenue standpoint. Many 'potential clients' had sites that were outdated and frankly needed to be redone. Design and programming earnings have been received separately and the seo/marketing has been completed on a conversion basis. This extra source of revenue, and the control to do it 'right' has proven to be a key to success.
Big picture: Monthly recurring revenue for client site sales has replaced the 1990's version of hosting income within my business planning. I am now receiving 'some' recurring revenue checks from clients <took 3 months initially to 'gear up'> and the outlook is bright, although realistic 
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WinningWays
Joined: Eons Ago
# Posts: 3433
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Posted: 2003-Sep-18 17:43
I typically use model #1. I find it works well for most clients because they don't have to expend a lot of money up front, and the monthly "maintenance" fee is more than maintenance. It could include adding/optimizing new pages, setting up PPC campaigns, link building, and so forth.
I agree currently, maintenance is more than just handing a client a ranking report -- it's ongoing marketing/consulting.
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nakulgoyal
Joined: Sep 18, 2003
# Posts: 53
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Posted: 2003-Sep-19 03:51
Depends from Client t Client. All clients won't use the same strategy.
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thejenn
Joined: Aug 08, 2001
# Posts: 9196
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Posted: 2003-Oct-01 03:15
nakulgoyal, the question wasn't so much about the client, it was the way that you, as an SEO prefer to handle your billing/charges with a client.
I do agree that not all clients are willing to go all payment routes (some won't go for a % of sales, some won't pay a large cash outlay each month, etc...) but as time moves on, it seems SEOs, and business owners are getting more and more creative in coming up with ways to pay or be paid.
Anyone else have input?
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