One of the most important tools in any agency or consultancy is the client contract. Contracts can be intimidating to some, but they don’t have to be. Think of a contract as simply an agreement between two parties about the work to be done.
Essentially, that’s all a contract is: a documented mutual understanding. A good contract sets expectations and keeps them clear.
If you’re offering SEO as a service, however, contracts can be tricky. How can you be concrete with expectations or tasks that are constantly changing? Here are my 12 elements to consider to help you create a solid SEO contract.
1. Keep It Broad Where You Can
As we all know, SEO changes practically daily. What search engines value this week can change in the next week, and if your contract contains very specific tasks, some of those task might be moot in the future. (For example, I formerly had terminology in my contract about setting up Google Authorship, and we all know what happened to that.)
Instead of being too specific about certain tasks, consider addressing larger categorical approaches, such as “on-page elements.”
Conversely, be careful not to be too vague in listing your tasks. Remember that the contract’s purpose is to create a mutual understanding and set expectations of work to be performed.
If you leave your contract too vague around tasks, your contract may appear shady or create confusion regarding expectations.
2. Consider Contract Term Length
There are two main options you have for contract term length: finite or auto-renewal. Finite contracts list a start and end date, as if you were working on a project. Auto-renewal contracts, however, contain a clause that allows the contract to continue to renew for successive periods — a month, a quarter, etc.
I personally like auto-renewal contracts for SEO for several reasons:
- I hate spending all of my time writing contracts instead of actually doing SEO. Auto-renewal contracts mean less paperwork overall.
- SEO is really not a “project,” but rather an ongoing effort — or at least it should be. I think auto-renewal contracts help clients to envision SEO as an ongoing effort without specific start and stop dates attached.
- I’m a tree hugger. (See #1.)
The one main downside I’ve found to auto-renewal contracts occurs when you have a pricing or service change. As your business grows, your costs will grow as well.
For example, if you’re starting out as a consultant in your house but move to office space, that will increase your cost of operations. That’s not a bad thing — but it does mean that you’ll have to reevaluate your pricing to ensure that it adequately covers your new operational costs.
With your new pricing established, existing auto-renewal contracts present the problem of your now legacy-priced contract. Depending on the amount of the pricing change, you may be able to “grandfather” existing clients with legacy pricing.
However, if you are not able to feasibly take the grandfathering approach, you may need to cancel the existing contract and create a new one — at higher prices. This can be a difficult conversation with your clients, especially when they have established marketing budgets.
3. Have A Minimum Contract Length
SEO results are most often not instantaneous. With that in mind, you may want to have a minimum contract length to give you enough time to truly begin to demonstrate results. Ultimately, SEO clients typically do not leave (or stay) based on task execution but rather based on results.
Many SEO firms require a 6- or 12-month minimum contract, some with no possibility of contract cancellation during that period. If 6-12 months seems too long, conversely 1-2 months may be too short.
I personally like a three-month minimum contract — this typically provides enough time to show positive movement in SEO and begin demonstrating the type of results the client is expecting.
4. Consider Annual Automatic Price Increases
The cost of doing business rises every year. Period. Operational costs rise every year, regardless of the economy. Just a few examples of ever-rising costs:
- Annual raises for employees mean that you will be paying more in salary next year than you are this year.
- If you have a commercial lease, you likely have a clause that automatically increases your rent every year. A typical standard amount of increase is about three percent.
- Typically benefits costs rise every year as well. For about a five year period, my company saw healthcare costs increase by as much as 20 percent per year.
- Many software companies increase the cost of software annually. For example, Marketo requires a seven percent increase in price year over year.
- You want to give yourself a raise next year, right? Let’s face it — you deserve it! (See the first bullet, above.)
If you have an auto-renewal contract, you can certainly consider adding a clause for clients that continue to auto-renew for years indicating that your costs will rise for every 12 months of the contract by a certain percentage, maybe 3-5 percent.
Three percent isn’t typically a huge difference for the client, but it certainly will help you make up for your increasing costs.
5. Be Clear About Subcontracting
Remember that a contract’s main purpose is to document expectations from both sides. If you aren’t clear about using subcontractors and a client finds out, the client has every right to be upset. A client is hiring YOU and your company, not a subcontractor. The client didn’t typically vet the subcontractor.
In short, if you’re planning on using subcontracted help, be clear about the right to do so in a clause in the contract.
6. Consider Including Non-Solicitation Language
Let’s say your firm does a fantastic job for a client. Later, the client has an opening for an SEO marketer on staff and decides to approach his/her account manager at your firm to consider the new job (because your account manager has been doing such a great job for the them!).
This may seem pretty unfair, but it happens all the time. If the client hires your account manager away, you’ve now not only lost a client but also an employee.
Being in the services industry, agencies have to protect their intellectual property and staff investments. Consider adding a clause to the contract that prevents the client from hiring your staff away (and perhaps preventing you from hiring the client’s staff as well) for some period of time — conceivably a year.
7. Incorporate A Penalty For Late Payments
Late payments may be the bane of my existence and yours. We didn’t become SEOs to become bill collectors! However, cash flow is essential to keeping a business running.
Consider incorporating a penalty, financial or service-related, for late payment. If you pay your rent late, there’s a financial penalty. Heck, there’s also a service-related penalty — you could be evicted! If you pay your credit card bill late, there’s a financial penalty.
Late payment penalties are common practice. Use them as necessary within your contract to encourage timely payments.
8. Consider Advance Payment
Best. Advice. Ever. When I started my firm ten years ago, I had a large client withhold $36,000 of payments. As a small company, $36k is a lot of money. It’s a lot of money for any size firm, really. I had already performed nearly four months of service and had no payment to show for it. Painful. Downright painful.
That’s when I began requiring payment in advance of services rendered. Surprisingly, I haven’t had too many clients question advance payment over the years since, and it’s helped tremendously with ensuring timely payments from clients and retaining positive cash flow. Consider requiring advance payment and avoiding #7’s issues altogether!
9. Will You Allow Contract “Pauses”?
What happens when your client approaches you and indicates that they want to “pause” the contract? Will you allow contract pausing?
As I mentioned in #2 above, I believe that SEO is an ongoing effort, so I don’t allow pausing in my contracts. If you do want to allow flexibility for clients to pause, be very clear about what a pause is. For instance, what is the maximum time a client can pause? Indefinitely?
Also, be clear about the notice required for pausing. Is the notification period 30-days? Less? You need some advance notice for contract pausing so that you can reassign staff to other projects and prepare for the financial loss of a pause.
Additionally, if a contract is paused and the client eventually unpauses it, do you guarantee that client the same account team? That can be difficult if you had to assign that team other work during the pause — they may not have bandwidth once the contract is unpaused.
I also don’t like contract pausing because it can set your business up for the pricing conundrum again. If a contract is paused and you have to increase your prices, do you grandfather the paused contract with legacy pricing?
I personally find it easier to end a contract if it is paused and start a new contract if the client wants to restart later. That way, I’m not left guessing when the client will return, when I’ll need to reassign a team to them, or if I’ll be forced to grandfather in legacy pricing.
10. Determine Your Termination Requirements And Be Clear About Them
Clients (and you) need the freedom to terminate contracts for multiple reasons — many of which may have nothing to do with your execution or results.
Regardless of the reason a client must terminate a contract, there should be clear termination requirements set forth. For example, how much notice does the client need to give to terminate? How will that notice be accepted? Verbally? In writing? What constitutes written notice? An email?
Setting forth the policy for termination will help everyone avoid misunderstanding and help you to better plan your cash flow and team assignments accordingly.
11. If You Sell Multiple Services, Use A Master Services Agreement With Task Orders
As you set up your contract, consider how you want to handle multiple lines of service with a client. If you offer more services than just SEO (or if you plan to offer more in the future), consider having a master services agreement (MSA) format with task orders/statements of work (SOWs) attached. This way, a client can easily add another line of service (or cancel one) without affecting an entire contract.
Additionally, SOWs or task orders often do not require scrutiny from a client’s procurement or legal department the way that a contract does, streamlining and speeding up the process to get new lines of work started.
12. Have A Lawyer Review And Edit Your Contract
ABSOLUTELY DO THIS. If you heed no other advice from this post, heed this. The contract is the mutual understanding of services to be performed, but occasionally, the client may disagree with you that services have been rendered according to the letter of the contract. In those cases, you might get sued, and that’s when a well-written contract (and your attorney) is your best ally.
A well-written, airtight contract will help you protect you and your business should situations devolve into lawsuits. So have a lawyer thoroughly examine your contract or even write it for you to ensure that you’ve covered not only the considerations I’ve listed in this post but also other issues that I’ve not covered, such as how breach of contract will be handled.
One Final Thought: Learn To Say No
Contracts, like all business issues, are negotiable. You’ll need to decide what you’re willing to negotiate and what you’re not willing to negotiate. For instance, in my master services agreement, I have a statement that commits the client to be a reference or case study. If the client chooses to delete this item, I’m willing to negotiate on that point. However, if a client wants to negotiate our 30-day termination clause to reduce the notice to 14 days, that is non-negotiable.
What matters most to you? What helps you keep your business running smoothly? Fiercely defend those clauses in your contract.
DO NOT BE AFRAID TO SAY NO. Many small businesses and consultants are afraid to say no for fear that the client will take their business elsewhere. Stop being afraid. Stand up for yourself and your business. If you cave to every contractual request a client may make, you could set yourself and your company up for financial challenges.
If the terms of the contract aren’t right for you, then they are not right for you. Committing to a contract that does not adequately support your business only sets you up for disappointment and headaches. Say no when you have to and commit to what is vitally important for your contract.
From: Search Engine Land
Author: Janet Driscoll Miller