The other day I had somebody call me from the insurance industry. She proceeded to tell me that her current SEO provider wasn’t giving her the results she desired. I looked at her linking profile and quickly figured out why. There was about 2k no-follow links on sites that had zero relevancy to her niche, and maybe 40 do-follow links on random blogs with scattered anchor text. None of the blogs had any PR mind you. 
I asked her how much she was paying her old SEO guy and she said $50/month. I about fell out of my chair. She was missing two zeros at the end of that number. This guy had decimated her website with spammy links and made it impossible for anybody to move forward with helping her achieve rankings. It was too little too late and her lack of budget hurt her in the long run. People need to be educated on the negative effects of cheap SEO and why it could have bad long term effects on their site.
Small budgets and SEO don’t mix
The biggest reason your cheap SEO provider can’t get you results is because he doesn’t have enough money to work with. Good SEO costs a lot of money and there’s no way around it. Unless you are trying to rank for all long-tail keywords in a non-competitive industry. My rule of thumb is that you shouldn’t be paying less than $500/month for SEO no matter what company you use. Anything less and I’d be worried. I just don’t see how anyone could achieve meaningful results on less money. Even $500/month is incredibly low in the big scheme of things. If it seems like a big investment for you then you aren’t ready for SEO. It’s better to wait and save up your money to do SEO the right way the first time.
Think of it this way. If you were paying the salary of an intermediate level SEOer to sit in the office at your small to medium sized business, the salary would probably start around $42k annually or $3,500/month. That’s on the absolute low end. You can imagine what $200/month would get you.
Moving forward will be difficult
If you’ve used a cheap SEO provider in the past you’ll have trouble getting a good SEO company to work on your site. They will have an uphill battle ahead of them and may not take on the challenge no matter what your budget is. Nobody in their right mind would take on a project that could potentially hurt their reputation as a company. I’ve turned down a lot of clients based on the fact that their backlink profile has been filled with thousands of trashy links by poor SEO providers. It’s like going into battle with both your legs already chopped off. Good luck with that.
Penalties are inevitable
As soon as Google does their new small animal update your site will tank. I know plenty of sites that got hit SUPER hard by the Penguin 2.0 update last week. It’s easy to see why too. Trying to trick Google into thinking your site is an authority by doing cheap SEO is the wrong strategy. They are getting better at detecting the value of a link pointing to your site. Plus the algorithm is only getting more sophisticated. In terms of backlinks, it has and will always be about quality as opposed to quantity. I would stay away from any provider that says “the more backlinks the better.”
Think about this, if it were that easy to get to page 1 by only spending a few hundred dollars then everyone would be benefiting from SEO. It’s the companies that put together significant budgets for SEO that really benefit from it. There’s no short cuts. Cheap SEO is like bad plastic surgery. Would you go cheap if somebody was operating on your face? I think not. Your business is your money maker. Treat it as such.
