(a quick guide)
Simply put PHP code into the obfuscator. For example:
ORIGINAL CODE $varA = "Hello World";
OBFUSCATED CODE eval(str_rot13(gzinflate(str_rot13(base64_decode('LUnHEqtVEvyaiZm94VrsCe8FCG4vG2vvPV+/zb5IqKHJd7pNcjK11MP9z9Yf...')))));
Technically offers better protection than free obfuscators, and also better performance. (Not sponsored links)
Obfuscators have poor performance and can be reverse-engineered.
Paid encoders are usually expensive, and may require specialized server-side installation.
Compiled code is no longer "compatible" to run beside web servers.
Security - Encoding not worth it until you have a billion-dollar sensitive system.
Payment - Better to just work things out politically.