Forum Moderators: LifeinAsia
I have been doing seo for a site that has been on the web for over 2 years and the owner of the site runs magazine ads and other promotional activities for the site. I have recently agreed to handle his pay-per-click campaign in a sorta barter for service. As part of the deal his suggestion was to give me 2% of all sales generated by my efforts.
The problem is how can I tell where the customers are coming from? The site is in an industry that does not purchase directly online but they will send an email and request more info and hopefully purchase. We know that my efforts are producing leads but his previous efforts are also providing leads.
How can can them appart? We both want to come up with a solution that is fair. Any ideas?
I would recommend maybe a baseline for sales/commission.
Since you both want the same thing - "fruition", a small percentage of all sales.
The object is growth regardless of whose growth it is.
Start with current sales trend 0.25% -- this in theory is not of your making, but growth does require a starting point, not just the "clients" growth but yours as well. (I will clarify this more at end).
Sales over this baseline, (in theory) is potentially of your making but there will be many mitigating factors that effect this, like other marketing, promotion and sales channels, market fluctuation (seasonal, economy factors, competition strategies, etc., that can work for and against you.
Ultimately your ability to expand exposure in both reach and new market penetration at significantly lesser cost to the client is the value of your service. In the end, if you are exceptional sales trends should be the same, in theory.
Depending on cost per unit sold your commision should increase up to an eventual flat rate (e.g. first 100 sales over baseline >> 1%, 200 >> 2%, 400 >> 3%, 800 >> 4%, 1600 >> 5% or something to that effect. Once say 10 or 15% then a flat pre-agreement rate. (A serious look at gross and net profits would determine percentages).
My suggested rate are based on the fact that the client has agreed to give in advance something to start and you are giving back a similar value by keeping commissions low -- over the initial startup period.
Back to that 0.25% - IMHO total commission services - where the service is provided absolutely FREE at start means the client is out obsolutely nothing if you fail, nothing to lose and everything to gain. On the other hand -- you have eveything to lose and nothing to gained over the short term, and the relationship will be strained right off the mark, and destined to fail regardless of how good you are.
Total commission fees are extremely high, and remain that way, permanently for one simple fact "you take all the risk".
It's alot of work to accomplish even for just a little, and in my experience just because hits, page views, visitation, and sheer traffic grows 1 million percent doesn't mean sales grow at the same rate. pay-per-click campaign is not sales, it's promotion.
So is the $29.95 for submission into 300,000 search engines and you get what you pay for (absolutuely nothing).
Long-term consideration is where fruition will be found and this means 100% equality in risk management.
Calculating ROI, ceiling for bids, etc. is the only way to maximize his investment in your campaign.
If you can make clear to him on the importance of this, you'll be well on your way to insuring that you get your well earned piece of the pie.
The solution that I came up with was to clone the site and put it up on a brand new domain name. All our promotion was directed to the new domain. Now we know exactly what he gets from his existing site and what comes from the new URL.
Plus as we host his new site and domain we have a built credit control mechanism should he ever want to welch on paying us our commissions!
(Yeah yeah, not an exact clone, different enough not to upset The Almighty Google, who must be obeyed without question....)
