Before jumping into any assumption lets see what does performance based SEO mean. This is a type of contract where you are not going to pay any money unless you get a determined result for your search term. Generally a contract is signed for a minimum period of 6-12 month. The specialist will continue working on the project until the clients website achives the good results.

Before discussing more on Performance based SEO let us have some idea on how it differs from traditional payment system. In this case, when a company starts a project, clients is charged for a big sum of money before starting of the project. Often this form of payment system becomes complicated because the result for the client is not at all guaranteed.

In this payment structure the specialist receives his payment regardless of any results from the project for the client. Performance based SEO service differs a lot from Traditional SEO payment structure. Here the specialist starts working on the project before any monetary transaction is being made with the company and unless the client gets the expected result the money is not transferred to the company from the client's side. Some SEO companies may have a set up fee to cover their minimum expenses for the project.

It is also very important to learn how this system works. We have already discussed earlier that in a performance based system the contract is usually for minimum 12 months with the client as the keywords may take some time to rank. It depends on the competitiveness of the keywords for how much time it will take to rank, and often it can take more then half of the contact period. Here is a small example to show how this system actually works!

Let's consider three competitive keywords that you want to point out.
1. widgets
2. gadgets
3. smidgets

Now these three different keywords have various level of competition. This level of competition can be assumed by the number of results that appear in the search engines and also the top ten current websites competition level. The keyword with less competition usually results in cheaper price. Pricing for the above keywords can be split up into three different structures. Like the keyword for widgets can more easily achieve top rank than the keyword smidgets. So the keyword smidgets receives much higher price for the seo company when it ranks on the first page.

Now after discussing the pricing structure, depending on the keyword competitiveness, price and payment terms can be agreed with the SEO specialist. The keyword facing a tougher road for high rankings will result in a higher price being paid. Different companies will have different performance milestones that will indicate a different payment to be made.

The fact is when a client agrees to a performance SEO payment system, he can be sure that some work is going on his project! This is because the company must get results to make money.

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