10 Characteristics of a Good SEO Contract
There’s nothing more intimidating than a contract for SEO services. It’s common practice to have one in place to protect both you and the agency. If you don’t know the first thing about legal jargon, simply look at the key characteristics of an SEO contract.
A study from Regalix shows that 54% of marketers believe adoption of SEO will explode. This is why contractual issues will become even more important. When you can breakdown the important parts of a contract, you’ll no longer be scared away by all the legal issues.
So here is what you need to keep in mind regarding contracts:
- Be Broad
SEO changes all the time. It can sometimes change from day-to-day. Every day three billion searches are carried out, so these are changes you have to keep up with.
For SEO contracts, the best strategy is to make it as broad as possible. If your contract is too specific, many of the tasks listed may be entirely obsolete in six months.
Rather than mentioning aspects like Google Authorship, mention on-page elements instead. On-page elements will never be obsolete, but Google Authorship went down the drain. Yet on-page elements can also incorporate things like Google Authorship.
At the same time, don’t get too vague. If both parties don’t have a firm understanding about each other’s expectations, this can create conflict. There’s a fine balance to strike.
- Contract Length
You have two options for contract length, and they are auto-renewal and finite.
Finite contracts state a specific start and end date. Auto-renewal allows the contract to be renewed, such as every month, quarter, or year. Auto-renewal contracts have a number of advantages, but here are the two main ones.
- They save the need to craft a new contract after every project has been completed.
- SEO is an on-going effort, so cutting off at the end of a project diminishes your long-term results.
The only thing you have to watch for is a pricing or service change. A growing business will always incur additional costs over time.
There are two options when an SEO agency’s costs change. First of all, a company can grandfather their clients in with legacy pricing. If this isn’t possible, the only choice is to begin a new contract with higher prices. This can be a shock for any client, and a difficult conversation.
- Incorporate a Minimum Contract Length
You’re not going to get instant results with SEO. That’s not how it works. On the other hand, it’s useful if both parties can come to an agreement on minimum contract length. This allows the client to find another agency if they want to and it allows the agency to disengage if the project is quickly becoming stuck in a rut.
This is a results-based industry, and you can’t expect to see visible results until at least six months down the line. The most common minimum contract lengths are six months and 12 months. Anything less than six months is too short.
Three months is acceptable too, but for some industries, this may be too short. Get the help of an SEO expert for more information on our specific niche.
- What About Annual Automatic Price Increases?
Every year the cost of doing business goes up. Regardless of how well or how badly the economy is doing, costs rise every year. Some of the price rises SEO agencies have to take into account include:
- Annual salary increases for employees.
- Commercial rents going up.
- Rising benefits costs. Healthcare can increase by as much as 20% over a five-year period.
Auto-renewal contracts generally contain clauses that increase costs every year. This is a natural part of any contract and it shouldn’t surprise you when you see it. A fair increase is between 3-5%. A paltry rise of 3% isn’t enough to make a difference to a client, but for an agency, it can mean everything.
- Be Aware of Subcontracted Work
A contract is designed simply to state some firm expectations from both sides. Subcontracting work is common within the world of SEO, but the client should be aware of this when they put pen to paper.
If you’re a business and you discover the work carried out hasn’t been done by the client, you would rightly feel upset about it. Subcontractors should be vetted and you as the client should have full access to any information on them.
Any contract should contain clauses relating to subcontracting or a lack of subcontracting.
- The Use of Non-Solicitation Language
Solicitation is more common than you think. Let’s say an account manager for a company has worked well with a SEO agency. The company is pleased with the work that the consultants have done for them. Guess how they reward them?
The SEO agency likes the account manager so much that they offer them a job for more money. It sounds horrible, but it’s common practice. If this happens, the business has lost an employee.
A contract should protect the workforces of both sides from being lured away. Add a clause that prevents both sides from hiring each other’s staff. A good clause involves banning the use of solicitation for at least a year after the contract ends.
- Penalties for Late Payment
It doesn’t matter how reputable a company is. It doesn’t mean that they’re going to pay on-time. Protections are vital because it could mean the difference between making a monthly rental payment and being served with an eviction notice.
Cash flow is crucial for any business in any industry. Include a financial or service-related penalty for late payment. They’re not designed to scare people away they’re designed to encourage timely payment.
Generally, the presence of a late payment penalty will encourage someone to pay up without any hassle.
- Clauses for Advance Payment
SEO agencies, in particular, should ask for some form of advance payment. Clients can withhold payments for any reason, even if it doesn’t seem fair at all. Smaller SEO agencies could find themselves without any cash flow if this happens to them, and they can do nothing about it.
Some companies have found themselves carrying out six months of work only to have nothing to show for it come the end. This is painful, but advance payment can make sure this never happens.
Requiring payment before the work begins is a great way to keep the cash flowing. Be aware that this is increasingly regular and won’t raise too many eyebrows.
If someone does complain about the requirement to make an advance payment, it should raise a red flag over whether they’re reliable payers.
- Contract Pauses
SEO campaigns don’t always go according to plan. Sometimes it’s necessary to regroup and recharge. But not all contracts will allow pausing.
If you as a business want to pause the contract, you should have this option. But there should be a maximum time for pausing to protect the client. An indefinite pause isn’t acceptable because it forces the client to sit on tenterhooks for a project that may never start again.
There should be a notification period to begin the pause. 30 days is acceptable. Advance notice allows the client to prepare. They can assign staff to other projects and alter their workflow. Sometimes advance notice to begin a project again is also necessary, especially if the SEO consultancy is busy with a range of other projects.
Allowing for contract pauses is entirely a personal decision and a lot of companies don’t like them.
They dredge up one big problem in that they leave a question mark over prices. Are legacy prices grandfathered in when a contract restarts or do the prices go up?
Another option to deal with pauses is to simply end the contract upon a pause and begin a new one should the project restart.
- Be Clear About Termination Requirements
Both sides should have the opportunity to terminate a contract before it ends, for any reason they see fit.
They may decide it’s because they aren’t getting the results they want or they simply don’t have a good working relationship. Whatever the reason, there should be facilities within the contract to allow this.
The termination requirements should be crystal clear. Here are some areas of termination you should include:
- How much notice does the client need to give?
- Does the notice need to be in writing?
- Are there any situations where termination isn’t acceptable?
Be very clear in this section otherwise it could lead to some serious misunderstandings. They should be agreed upon to take into account the needs and requirements of both sides.
Contracts can be painful, but they’re a vital part of any negotiation. A contract shouldn’t take up more than a few pages. They don’t have to be the legal bibles you think. Keep it simple and make sure the layperson can understand them.
There are plenty of templates online, but it’s always good to have a legal expert look them over. You don’t want to discover any errors or omissions after the project has begun.