I ran into a couple of unique situations a few months back that really challenged me. Both had to do with unsatisfied customers demanding that we give them money back. Each situation was different and therefore handled differently with a different result. In one case, money was returned, in another it wasn't.

Each situation caused me to look deeply at what was right and wrong, what was deserved and what wasn't, and what were we contractually obligated to provide vs. what was smart business. The lessons I learned from both of these situations can provide valuable lessons to both SEOs and small business owners looking to hire an SEO for their website.

Case Study #1: Plug the hole the leaks, not the hole that's filling the bucket!

We had been running a PPC campaign for an auto parts company which, by all measures, was one of our most successful campaigns. Everything in terms of click through rates, cost per click and--the number we love the most--cost per conversion were nothing less than spectacular.

We initially signed a six-month contract with this client and over the months they increased their budget based on the results we were providing for them. After a few months the economy started to slow down and this company got hit pretty hard. According to them they saw a rise in costs and a decline in overall sales. Somewhere in the bowels of the organization someone started looking at the company finances and decided to start making cuts.

This put a big bullseye on the PPC campaign. What they saw was nothing more than a large monthly expense. The PPC campaign, we knew, was delivering strong profits on a month to month basis, but they just looked for where money was going out the door and paid no attention to where it was coming in from. They decided to cut this expense not realizing they were cutting actual profit at the same time.

A lawyer? really?

But I didn't know the company was in financial peril yet, we were just plugging away delivering solid profit through PPC. Then one day, without any call or email from the client, I get a call from their lawyer. Now if that sounds odd to you, I'd agree.

We maintain a very open relationship with our clients and honestly, had the client himself called the situation would have turned out entirely different. I've always been willing to work with clients and help them out in their times of need. To me the business relationship is more important than profit. I've had clients leave for one reason or another and then years later come back. That's pretty satisfying.

But this client, who we were in regular communication with regarding their campaign, suddenly had his lawyer call me to demand that we let them out of their contract. Here we were four and a half months into a six month contract, with budget increases happening due to the success of the campaign, and suddenly Mr. Lawyer is demanding we void the contract.

After a brief discussion I informed the lawyer that I would be happy to talk with the client about their campaign and left it at that. The next day I received an email of "cancellation" from the client. The client agreed that they would pay for the fifth month (we were halfway through it) but not the sixth month, despite their contractual obligation.

Get the facts, make the case. People are reasonable, right?

Before responding I spent several hours researching the campaign and putting together the stats which showed strong rates of profit on all their ad groups. Armed with that information, I sent the client a polite email outlining the case in detail that the campaign was working and working well. Then I told him I would be happy to discuss at his convenience.

The next day I got a call from the client, demanding that they be released from the contract with no further payments. They simply didn't care how successful the campaign was, only that we stop performing services. They had no concern over the contract and felt simply that if they want out that we let them out, end of discussion.

Of course I refused. Had the client asked, had they come to me to tell me about their business woes, had they listened to the evidence I presented but returned saying that they simply couldn't afford the campaign and really had to get their finances in order, had they done anything other than make a demand, I would have listened, understood and likely granted their request. I know this because I've done this for other clients that have approached me the right way.

Now before we finish this story, let's look at the next case.

Case Study #2: Everybody needs to know what They're getting into!

This is another situation where we were managing a brand new PPC campaign. This one never felt quite right, even before contracts were signed, but we decided to take it on anyway. The prospect came to us from a referral and they were looking for 50,000 hits to their site for $2,500. In our initial communications we tried to brush this off because we don't run campaigns based on click through rates. Instead we manage costs, conversions and profitability.

We never shut the door entirely, just trying to guide the discussion back to territory we are comfortable with. The client expressed they simply wanted a short run trial and with that, it remained somewhat appealing to us. That, and the possibility if being awarded a much bigger contract should we succeed.

We decided to take it on knowing that, as a trial, it would only take up a couple weeks of our time. We figured we could keep start up costs low (I mean really, really low) but just barrage the engines with relevant keywords until the requested amount of traffic was delivered. Again, much to our chagrin, the client wasn't even concerned about conversion rates, only traffic delivery. Despite this we could not help but to keep keywords as relevant as possible.

Ads? They're not showing any stinking ads!

We immediately had problems with the campaign. Google, for whatever reason, would not display the ads. This was their snafu, not ours. A few days after we contacted Google about this the ads started appearing.

We immediately noticed that many of the keywords didn't meet the minimum required bid rate to get the ads to display. We fiddled with the campaign and keywords to get more keywords to appear, but ultimately realized that if we were going to deliver a decent number of clicks in such a short amount of time we needed to increase the minimum bid on many of the keywords.

We informed the client of our progress and the changes we were making. Rightfully, they complained. They made it clear up front that they wanted a certain amount of traffic delivered for no more than certain cost. Essentially, they were not willing to pay any more than $0.05 per click, period. This is when I realized that we would not be able to meet these expectations. I'm sure somebody somewhere could give them what they wanted, but we just weren't wired that way. We like seeing high profits, through testing of keywords and landing pages while tracking conversions rates. We don't focus solely on cost per click.

If you know you can't succeed, try to make things right

We informed the client that we would go ahead and close up the trial run as we would be unable to meet their needs. We saw no sense wasting our time or their money so it was best to just call it quits. Because we were the one voiding the contract I was fully prepared to refund the fees the client paid us to manage the campaign (a small set-up fees). The client however demanded that we refund more than that. They wanted all the fees paid to Google plus a severance of several thousand dollars.

I wasn't prepared to refund the Google fees. After all, those are clicks that were delivered. But I went back to the contract and saw that we did in fact specify that we would deliver clicks at a cost of no more than $0.05 per click. We failed in that regard so I immediately conceded and refunded all Google fees as well. I was probably well within my right to refund ONLY the overage, but it hadn't amounted to all that much so it was just easier to refund it all.

Despite this, the client continued to demand the severance. I politely explained that the contract was considered to be a trial run by both parties from the very beginning. A trial, by its very nature, implies that failure is a very real possibility. The client had been fully refunded of all fees paid to us and Google as a result of our management. It cost them nothing and we considered the matter settled.

When refunds should be expected and deserved

In both cases the refund was dictated by the contract. In the first study things could have turned out better for the client had they handled things differently. Nobody likes being dictated to, especially when they have a contract that favors them. By changing their tactics, however, I would have been compelled to do what was necessary to maintain the business relationship for possibly working together in the future.

But when push came to shove, and it did, I had the contract to back up my position. The client had no right to demand that I simply release them, especially when there was clear evidence of success on our part. After we charged the client's card for the remaining amount due (the final two months on their contract), they challenged it with their card holder. We presented evidence of the contract and the credit card company sided with us.

If you're a client in a similar situation I suggest you take the softer approach. Ask, present your case and hopefully your SEM can see things from your site. We've done it more than once. Business isn't just about making a profit it's about taking care of people. And we like to take care of our clients even when they can't be a client anymore. Don't burn the bridge, build it.

In the second case the contract favored the client. We promised somethign that ultimately we didn't deliver. Now we could have ran this thing through, keeping within the parameters but ultimately not providing total satisfaction to the client... and kept the money, but we looked beyond that. When we saw that we would be unable to satisfy the client we put an end to the contract, refunded the money paid to us and others.

Now the client didn't get the severance, but then that was a silly request. We were not contractually obligated to provide that and our contracts protect us from such punitive awards. But we did the right thing by making sure our failure didn't cost them anything out of pocket. We saw that the right thing to do was to provide a full refund, and that's what we did.

When in a situation where you feel your SEM is underperforming, look first to the contract to see what it is you're entitled to. If you want more than you are entitled, talk to the SEM. Present your side let them present theirs. You're not likely to get more than you're contractually obligated to but you may be able to get a deal that favors you in the long run.

The best thing you can do when dissatisfied is to work through the relationships you have rather than burning the bridge. Keep this in mind: if you burn your bridges it's impossible to get what you want and need delivered to you. But if you build the bridge then good things are more likely to be brought your way.