13 replies to this topic

[slepster]

I would like to start a thread on the issues of an SEO subcontracting with another firm. This does NOT fit the criteria for the Contracting and Subcontracting Topic already set up in the Marketing Your Business Forum.

Specifically, I want to solicit people's experiences hiring themselves out as subs or hiring others to sub for part of the SEO work (copywriting, for instance). I have 2 web design firms that want to set up a sub relationship with me and I need some advice on this. Please point me to the right forum area. Thanks!

Rick

< I have moved this to the running a small business area > OWG

<I moved it to the subcontracting and contracting forum. LOL...dueling moderators - Jill>

Edited by Jill, 12 November 2003 - 06:23 PM.

[dragonlady7]

Hey, this is an interesting topic. Most of the interest in my services has come from people looking to outsource to me as well, and I was wondering where I could ask about that.

I have to put together a more coherent post with all my questions, but you're right-- this ought to be discussed. For example, what are the benefits of doing most of your business this way, as opposed to the drawbacks?

I can certainly see that it's a big bonus to not have to spend so much of your time looking for clients directly, but a major drawback is that, should you have a falling-out with the person through whom much of your work comes, you're in a pickle, as you have no referrals coming in directly to you.

I actually had a brief conversation on this topic with a friend of mine who's in his final year of law school-- he said there are contracts that attorney firms often use to handle these sorts of relationships, so I was going to look into those.

It's an interesting area and one to which I am planning on devoting more attention!

[qwerty]

I've had a number of people tell me that they were interested in farming work out to me, but so far only one of them has come through with any projects, and in that particular case, I'm not being treated as someone who was brought in to take care of certain tasks. Instead, I'm being referred to as a "partner" or a "colleague," which is ok by me.

I think the major disadvantage to having work farmed out to you (but not in the case I just described) is that you're probably not in a position to claim the work as your own. You can't list the client as your client, and you can't use them as a reference.

[OldWelshGuy]

I am in the UK so things might be a little different here.

I also get work on a sub contract basis occasionally, I have about half a dozen or so people who will tender for Corporate or Local Authority (thats like our local councils who handle the running of the local budget, handling everything from education to social services and street lighting refuse collection etc, they are the biggest employers in the country and the UK is split into 32 of them with 9 being in Wales) I can't be doing with going direct so these people will contact me to look at the tender, I give them a price and timescale, then they add this to their tender (a tender is a quotation, but it is on a blind basis to make sure there can be no deception) in theory .

Anyhow when they get the job, and i go in, I too am painted as their specialist in this field, i work totally without mention to my company as thats the way they like it.

I also carry out web consultations for local enterprise agencies where i am painted as their web specialist, although in this case i use my business card, AND theirs (too weird)

I find it is good, as they always pay, and they always give plenty of notice.

[SearchRank]

We provide SEO for several web design firms and stay behind the scenes, delivering a branded service that to the client looks as if the web design firm is handling their SEO.

The only disadvantage for the design firm is when their clients start asking questions that they can't answer and then they have to contact one of us. It becomes a game of the client asking a questions, the design company saying, "let me find out," and then asking someone over here and then getting back. Works okay with email but when they call ... it can be an inconvenience for the design company.

Other than that, I invite web design and advertising agencies to sub out work to my firm. The money all spends the same!

On the other hand, we have never subbed out SEO work but have subbed out web development which has been good in some case and bad in others.

[dragonlady7]

One setup I'm considering would be how Qwerty says-- I can't use the client as a reference, as the client would never be aware that I was available independently. Which means the client would come back to the company I was working through, and would refer all friends to the company I was working through. That sounds pretty bad, except when you figure in how much that company has going for it in terms of other services offered and star power of some of the other employees, etc.-- as long as you stay with that company, you'll save yourself loads of work in promoting yourself. But if for any reason the arrangement changes-- the company decides to outsource to someone else, or you decide you don't want to work through anyone anymore-- then you have to start from zero.

Which is why I think, like in most things, it's very important to adopt a balanced approach. I am perfectly happy to sell myself through other people's companies, as long as they don't make me sit in their office. But I'm not going to exclusively work with anyone in particular. I'm thinking there's probably a percentage of my work I should reserve for coming from my own leads, just so I have a few clients of my own should the worst happen.
Alternate revenue streams is the name of the game. You can't depend on just one client, or on just one venue for getting clients. It's like people who depend exclusively on free traffic from Google for their whole business, and have no backup plan in place in case something happens to that.

[slepster]

This appears to be as good as any place to discuss this since the thread hasn't been moved elsewhere, here's my specific situation:

I am suppose to come up with a reasonable compensation fee to this web design firm since they sent me the business. I am meeting with a second design firm next week to discuss similar issues, so I need to be addressing this issue now. Ideas I've been told to explore include:

1) a flat referral fee
2) a percentage of my overall fee (10-15% was brought up)
3) my marking my costs down 10-15% and the design firm then marking it back up 10-15% to the client to get them a cut

or some other creative way for me to compensate the design firm for sending me business

I have no problems with compensating the design firms for getting me business. They put me in touch with the customer, and this is the 3rd such customer they've done this with and it appears that there may be more clients in the wings so they want a cut.

I have concerns with all 3 methods perscribed above:

1) what if it's a larger or smaller than normal job? Does that change the referral fee?
2) I get my full fee, but it could become cost-prohibitive for the client to afford my services if it's marked up too much.
3) I get a partial fee, but we keep the costs down for the client.

Keeping in mind that (so far) all of these clients have been small businesses, so costs must be held in check.

Is there a better way to do this? At this point, I get direct contact with the customer. They recognize me as a subcontractor to the design firm, so they know who I am and I can likely get references. No discussion has taken place over the whole reference area, which could be sticky.

Rick

[patrickh]

I have arrangements with a web design in the same fashion, they offer seo as one of their services and just pass the work on to me to do. I just told the firm this is my rate, feel free to charge whatever you want to make a profit off me as long as I get my $xxx dollars . The biggest benefit of this is not having to work directly with clients, because the firm does that for me... they handle all the nagging phone calls and worries, something I will gladly pass on.

I do agree with dragonlady though, its a bit of a bummer knowing the client will never recommend you to a friend, they will just recommend the firm. I just look at it as a job I wouldnt of had without the firm, so its a good trade to me.

[SearchRank]

As far as fees go, here is how we work in SEO relationships with design/advertising firms:

1. Referrals - This is the situation where they refer us to a company who already has an interest and then we make contact with them and secure them as a client. In this type of situation we pay out a 10% referral fee based on whatever the set up costs to the campaign are (excluding fees paid to third party vendors such as Inktomi, Yahoo, etc.)

2. Agency Discounts - This situation is where they are the acting agency or middleman between us and the client. We deal directly with the agency and they deal directly with their client. We can stay completely behind the scenes or have a presence but we will correspond with the agency as well as invoice them for fees. In this type of situation we offer a 15% agency discount on both the set up and monthly recurring fees (excluding fees paid to third party vendors such as Inktomi, Yahoo, etc.). They can set your own pricing with their client or simply bill them 15% more than we are billing them.

The first option simply pays out a percentage based referral fee whereas the second allows the agency to make ongoing residuals.

[slepster]

Searchrank,

Do you pay the referral fee up front or at the end of the job or half now, half later? I think I like the referral fee option and I'll see if I can get any monthly fees not included (I can try, any way).

Thanks for the feedback. I would be curious in knowing what others are doing here, also.

[SearchRank]

Do you pay the referral fee up front or at the end of the job or half now, half later?

At the end and more importantly after we have been paid.

[patrickh]

Slepster, I would make the arrangement that their referral fees are paid as a % of the money you actually receive from the client, not the ammount they are billed -- that way, if a client stiffs you, you will not of been stuck working for free AND paying the referral.

[Jill]

Very interesting topic!

I've somewhat been on all sides of the fence. In the old days (okay the 90's) I had a variety of people and companies that referred SEO work to me (yes, that includes Danny Sullivan himself ). In those cases, they would simply tell the contact to say they were referred by so and so, and then if anything ever came of the job, I would pay out 10 or 15% of the total as a referral fee. (I can't remember which percentage it was...I think maybe 15.)

I like working that way because you still have to sell the client on your services, and still get to work directly with the client with no middleman.

Over the years I have been approached by agencies and the like to do it the other way where the client goes through the agency and I work behind the scenes. In those cases, I would have still given them the 15% referral fee and then they could mark it up however they wanted. None of those potential jobs ever came though, however, so I don't know whether I would have liked it or not. The middleman thing kinda seems like it could be a bit of a pain.

Now I'm not taking referrals any more as I have more work than I can handle, and am instead contracting some aspects out to people. I've always contracted out copywriting and link building and stuff, and I prefer to not hide the fact that I'm not doing the work myself. I strongly believe in giving credit where credit is due.

I simply charge whatever I charge and then pay the contractors their going fees for their services. Often the work goes through me because I take full responsibility for any client work and usually have to at least give it a cursory glance. But if necessary, the contractors will deal directly with the clients too. I know Debra prefers to work that way for link building.

On occasion, I sometimes refer leads for full SEO jobs out to other companies if the client needs it done more quickly than I can do it. In those cases, I would then get a referral fee if things worked out and moved forward.

I always paid my referral fees when the job was completely finished and I had received full payment.

I pay my subcontractors on whatever terms they have, such as full payment in advance, or payment when the job is done. My subcontractors have worked with me enough to not worry about getting paid, so we usually just invoice and pay when we get around to it!

As to testimonials and stuff, since most of my subcontractors are known to my clients, they are free to say that they worked for that particular client's site, in whatever capacity they worked on it. I suppose technically, I'm their client and not the other client, but as far as I'm concerned, they should be entitled to claim ownership of their own work!

Many copywriters don't mind not getting credit and working as a ghost writer, but I just feel weird about working that way.

Jill

[Scottie]

I'm actually subcontracting to a designer right now (instead of the other way around!). Ya gotta love it when you have a client who "gets it" and knows the planning comes before the colors.

The way I'm working it is to get a quote from the designer on the project, then add a percentage. They bill me, not the client.

It's part of the overall project management thing I'm going for and it seems to work. I'm not just offering SEO, but total site improvement. Managing the redesign is part of the whole thing.