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Should SEO Contracts Be Exclusive?

Greetings from inside the SEOigloo!
My friend Tim at Convert Offline has just posted a very thoughtful article on the exclusivity of client contracts.
As Tim points out, there are some concerns that if an SEO or SEM were to take on multiple clients in the same industry, they would essentially be competing against one another and this could become very difficult where PPC advertising is concerned as the pool of clients would all be bidding against one another for the same keywords. I think these are really valid points, and while we have taken on some exclusive contracts, we’ve also gone the other way and I thought I’d hop into this conversation by sharing my experience with this.
Some years ago, we wound up with three clients in the same industry and all in the same county. Client #1 liked what we did for him so much, he recommended us to others in an organization he belonged to. We were flattered, and the clients didn’t mind us working for their ‘competitors’ because this was an industry where there seemed enough to go ’round in terms of the products they were creating. Still, we wondered how it would work out.
As it turned out, not all clients are created equal, especially when it comes down to budget and I think this may be particularly the case with small businesses rather than the big guys. Consider these profiles:
1) Client One is well-funded with plenty to spend on web design and SEO basics. His inventory changes constantly and he needs long term webmastering. He doesn’t enjoy writing, so all his copy needs to be done professionally by us. He needs PPC, too.
2) Client Two wants to do most of the work herself once her site is live. Funds are limited. She wants a blog and her inventory is pretty static. She can’t afford PPC but she writes well so content creation can be her strength.
3) Client Three has a modest budget for site design and while his inventory remains the same much of the year, he needs frequent updates for another reason. Unlike the first 2 clients, he has a well-known walk-in location that is a tourist destination so tour schedules and seasonal hours need to be changed regularly and he doesn’t want to bother with doing this himself. He also gets a lot of local press because of events held at his business and this needs to be cited on the website. He’s a great candidate for local search efforts.
My illustration above is meant to reveal that we discovered ourselves doing different tasks for the three different clients and because their products were not totally identical, there was room for all of them to strive for good results in slightly different ways, commensurate with their budgets.
So, my feeling is that exclusivity may need to be determined by industry. Would I take on 3 equally-funded car dealerships in the same town all selling the exact same models of cars? Probably not. But what about 3 inns in the same busy vacation spot? Yes. I’d bet it would turn out that there was enough business for all of them and that each was offering something a bit different to patrons. One might have in-room flower service, another might feature kitchenette suites, a third might have fabulous views from their rooms. In other words, the appeal of each would be individual enough to make for unique, compelling copy and a slightly different approach to customer service.
That being said, Tim’s points are very valid, especially where competition is fierce. I think you’ll really enjoy his post.