The SEO business is 80 percent scam. There, I said it. Too late to take it back.

But plenty of you know that, anyway. In my consulting business, I hear all the time from clients large and small that have worked with SEO companies, sometimes paying many thousands of dollars…and have received little in return. In fact, I’m often asked, “Can you check my site and see what they did?” and on doing so discover that “they” did very little.

I won’t go into detail here about my “SEO is 80-percent-scam” contention (if you care to read the details, see here). I’ll just state that picking a good SEO firm is a little like picking a good multilevel-marketing firm. You might get lucky and get rich, but far more likely is that you’ll waste a lot of time and money.

In fact, one of the most common questions I’m asked is, “How do I hire an SEO firm?” So, here are ten things you need to know and do when looking for an SEO firm that is worth the money you’ll be paying.

Read SEO for Dummies

Step 1: Read and understand SEO for Dummies! Even if you don’t intend to do the work yourself, it’s essential that you, or someone on your team, understands SEO. Most people buying SEO services really don’t understand what they are getting for their money, so they’re buying blind, crossing their fingers, and hoping it will all turn out okay. (It usually won’t.)

A better strategy is to understand what SEO firms do so that you can understand what the prospective firms are telling you and check up on them to see that they really do what they claim.

Don’t Believe Your Web Development Firm

Most Web-development firms these days will tell you that they’ll handle the SEO for you, perhaps for an additional fee. This is almost always nonsense! DO NOT BELIEVE IT!

All Web-development firms say this these days, because their competitors say it. I don’t know how to stress this more. It’s almost always not true! They will do a terrible job!

Why You Don’t Need an SEO Firm to Optimize Your Site

But here’s the problem. You actually don’t need an external SEO firm to optimize your site. Ideally, the people building the site should be optimizing the site! And, as noted above, they’ll tell you that they will do it, but they don’t know how to.

Remember, SEO is essentially about two different things:

* On-page optimization

* Off-page optimization (essentially, linking)

In most cases, when you sign up for a third-party SEO service to optimize your site, very little gets done, and some really important page-optimization issues are ignored. It’s hard for a third-party firm to come in and restructure your site, creating good keyworded URLs, for instance, or rebuilding your page templates to use H1 tags, or implementing extensive internal linking — and thus, they don’t. Instead, the SEO service tweaks a few things here and there, such as by fixing title tags and description tags (usually badly) and creating keyword meta tags (mostly pointless). I’m not sure that I’ve ever seen a third-party SEO firm do a good job of page optimization.

Hiring a third-party firm to optimize your site is, in most circumstances, a bad strategy. Rather, the team that is building and maintaining the site needs to understand optimization and optimize as it builds.

So what’s the role of an SEO firm? In my mind, it’s all about linking. I don’t think it makes sense to hire an outside firm to do on-page optimization, so that leaves the other part of the equation, linking. My advice is that if you plan to hire an SEO firm, focus on linking.

There is one exception: a situation in which an SEO firm is going to come in and take over your entire Web site for you. Then that firm has control over everything and can make all the necessary changes. This doesn’t mean it’ll do a good job, necessarily, but a good firm could, in such a situation, do a good job. The average SEO firm, without having full control but instead just tweaking a few on-page issues here and there, won’t.

So if SEO firms are bad at on-page optimization, and your Web developer will claim to be able to do it for you but really doesn’t know how…what can you do? Yep, it’s a real problem. It comes down to education. You, or someone “on your team” needs to understand SEO, and be able to tell the Web development team exactly what you want and how to do it, and check up on them to make sure they do just what you need.

You may be able to find an SEO firm or consultant to do that; not to do the actual optimization, but to oversee the Web-development team to make sure they do it right. (Blatant self-promotion: I have done this many times and sometimes still do; you can contact me here if you want to talk.)

Find Firms Through Referrals

Perhaps the best way to find an SEO firm is through referrals. Do you have friends of colleagues who have worked with a good SEO firm, one that actually did help their sites rise through the search ranks? If so, that firm’s a good place to start.

Unfortunately, considering the 80 percent scam factor, you probably don’t have a friend or colleague who has successfully hired a good SEO firm, so you’re going to have to dig a little deeper.

Look for Niche Services

I said that the SEO business is only 80 percent scam; there are some good firms, and some of the better firms focus on particular areas, such as the legal business, insurance firms, or medical clinics.

So, you might look around and see whether you can find any firms working in your particular business. However, beware: There’s no guarantee, and many such firms don’t do a good job.

Understand What the Firm Is Providing

SEO firms love to blind with science. It’s easy to do, because most people don’t understand SEO. You, however, are different. Armed with your new knowledge from SEO for Dummies, you know what SEO is all about and what an SEO firm should be doing.

For instance, when a firm says, “We’ll get you blog links,” you know enough to ask, “What does that mean?” What kind of blog links? Are these blog posts or links in comments? Are they follow or nofollow links? Are they on sites that are indexed by Google? How many links? How many different blogs? And so on. All too often, I have clients admit to me, “Well, I’m not exactly sure what they were going to do.” Don’t be one of them!

One client I worked with was paying $2,700 per month to a firm without fully understanding what that firm was doing. It turned out that it was doing some (pretty worthless) on-page optimization, along with creating somewhere around 25 to 30 low-value links pointing to the site every month. After the client understood what he was getting, he also understood that he was paying way too much.

There are many different ways to get links pointing back to your site. (I mention numerous methods in SEO for Dummies.) If you use an SEO firm to get links for you—to do your “off-page” optimization—you need to really understand what kinds of links they will get youLinking is more difficult these days than in years past, and buying links more problematic. First, remember that Google doesn’t like purchased links; and they’ve become pretty good at figuring out when a link is a low-value, most-likely-paid-for link.

That means that if you buy cheap links, they’re probably not very valuable, and may in fact become totally useless—when the search engines figure out they’re paid for they will no long provide any SEO value to your site.

That doesn’t mean you can’t buy links that will work; but it does mean that fewer companies do a good enough job to make “fake” links work, and consequently the good companies charge much more than they did in the past.

Of course not all forms of links amount to buying links, even if you’re paying someone to get the links for you. Link-building has moved toward a PR model—Public Relations. That is, find a good reason for people to link to your site, then have a firm contact bloggers, newspaper and magazine sites, and so on, and encourage them to link to you. You have to have a hook, a good story, so this kind of linking is much more complicated (and expensive).

If a company simply says, in effect, “sure, we can get you 50 links a month, don’t worry about where they are coming from,” you’re buying links. To reiterate, Google doesn’t like that, there’s a good chance the links are not very valuable, and if they are valuable—if they come from really professional-looking Web pages, for instance—then they’ll be expensive.

Anyway, linking is a complicated subject (see the linking chapters in SEO for Dummies), but you must at least understand what kind of links the firm you are talking to will be creating.

Understand What the Firm Expects of You

Here’s a common SEO scam. You sign up for an SEO program, the SEO firm does a little work for you, but then it starts sending you e-mails telling you what you should be doing. Eventually, you realize that the service you signed up for involves the firm telling you what to do!

“Here are some good blogs related to your business,” an e-mail from the SEO firm states. “You should get links from them.” Following is a list of blogs, something that took the firm all of ten minutes to put together. That’s its work for the month.

As a journalist from a major business magazine told me after an interview, when we started talking about her own startup Web site, “I thought that’s what I was paying for, for them to get me links, and now it turns out I’m paying them to tell me where to get links from. I could have figured that out for a lot less than $800 a month!”

So, before you sign up to spend your hard-earned money, make sure you understand what your prospective firm is going to expect you to do.

Look at Samples

Before you start, make sure you see examples of the firm’s work. If you are (against my best advice) hiring a firm to do on-page work, take a look at sites it has done. What did it do? Did it do it well? Are the title and description tags good? Are the URLs well keyworded? Do the pages use H1 tags, have good keywords scattered throughout, and so on? (After you’ve taken a look, you’ll probably agree that I’m right and not hire a firm for on-page optimization.)

If you’re using a firm to create links, do a link analysis on sites it has worked for in the past, using one of the tools I discuss in SEO for Dummies (my favorite is Majestic.com). See what sort of links it’s creating and how many. Are they good links? That is, well keyworded, follow (not nofollow) links, ideally from sites with some PageRank (although, as explained SEO for Dummies, that’s not essential for all the links). Are the sites the links come from indexed in Google? Is there a range of different types of links?

Whatever you do, do not hire the firm until you’ve seen, and evaluated, what it can do for you.

Ask for References

You should also ask for references or simply call the owners of sites you know the SEO firm has worked for and ask them how their experience was. Did their site’s rank improve in the search engines? Did the firm do what it said it would?

SEO work can be expensive, so a little time spent checking references can save you a lot of money.

Will the Firm Provide Reports?

Make sure you’ll get reports; ask to see an example and make sure the reports provide useful information that you can understand. Many millions of dollars have been spent on SEO without the clients knowing what they are getting in return. (I call this faith-based SEO.)

It’s an old management adage that you can’t manage what you don’t measure. If you don’t get reports, you’re not measuring, you’re not managing — and you’re quite possibly being scammed.

Compare Dollar for Dollar

After you understand what you are getting, services become easier to compare. For instance, consider the service I mentioned earlier: $2,700 for 25 to 30 links a month. I’m ignoring the value of the on-page work, because quite frankly, it was close to worthless. So the monthly price worked out to be $90 to $108 per link. Back in those days (this was a few years ago), it was often possible to get good keyworded links from sites with a PageRank of 2 to 4 for $3 to $6 per link, or low-value links (low PageRank links, for instance) for as little as 10 cents a link. This $2,700 per month service was providing pretty low-value links comparatively…it was way overpriced (and my client dropped it, in fact).

You can’t compare firms until you understand what’s on offer, and as most clients don’t really understand what they are getting, I don’t understand how they make the final decision. I guess it’s whichever firm has the most persuasive sales person or the firm that hits the budget you’re comfortable with.

Please, don’t be one of these businesses that know they need SEO, that don’t really understand how SEO works, and thus get scammed. They are in the majority; you need to educate yourself so you can join the happy minority.