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How should I get paid for increasing my client's profits

     
9:16 pm on May 29, 2007 (gmt 0)

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Hi,

I have a client that sells musical and theater lessons to local people a large upscale facility
The lessons sell for $400. Some are once week for 10 weeks, others everyday for 10 days

They want me to increase sales and profits using the internet
I have thought of ways to increase traffic to their website.
But most of the closings of the sales would be made face to face during an onsite tour of the facility

I would like to get compensated for my work on an ongoing pay for results basis.

I am looking for suggestions on how to base my compensation on a measurable result that would relate to increasing their profit

For example website traffic and size of email list, are easy to track but might not relate to sales and profits.
And the number sales that I caused to happen would be hard for me to track since they would not be done online.

Thanks
Ric

9:31 pm on May 29, 2007 (gmt 0)

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...bear in mind that it will be easier for you (as a webmaster, and not a music teacher) to increase his traffic and email list. because that is something that you have got direct control over, and expertise in.
from what you say, the actual selling part is more to do with him than you, because he is the one that meets them.

so maybe you would be better off linking your wage to the traffic.

after all, if the money goes up when the traffic goes up, then you can be certain that you'll get some extra money.
but if you link it to actual sales then you might (truthfully) get nothing even if his traffic doubles.

12:57 am on May 30, 2007 (gmt 0)

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You could put forms on the website to request rates, further information, etc and sell the music company the leads for a certain agreed upon price.
2:55 am on June 4, 2007 (gmt 0)

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i hope this doesnt sound too harsh, but i'm in a similar situation to your client where i sell 'upscale lessons', and after screening & contact, i in fact do close the sale personally.

if i hired someone to increase my website traffic and they mentioned what you're saying here, i'd think you're out of your mind, laugh and hang up the phone.

i think what you're asking is out of line for the sort of business you're talking about.

3:20 am on June 4, 2007 (gmt 0)

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IMHO - I think the ONLY way you can justify this type of Ďcommissioní compensation from your client is if it was an "up front" requirement on your part. Besides, increased traffic does not always mean increased sales and you have no way of accurately monitoring their income and whether or not that resulted from a web site lead, word of mouth, print ad, brochure, etc. Forgive my bluntness, but you were hired/are being hired to build or improve a web site, not teach music.
6:37 am on June 4, 2007 (gmt 0)

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What you're trying to come up with I think will only become a disaster. Commission is a funky business usually only paid to the 'closer' with written contracts in hand - which correspond directly into revenue - which can then have a % commission issued.

Clean contracts are the only way for any business not to eventually have big problems. I don't see a way of achieving an actual commission off this fellows sales.

The two ideas above proposed, selling the leads or payment proportional to traffic, are the only ways of commissioning such a project.

From what twtnyc says, this type of payment would be a hard sell. However, also a hard sell is any technology that the client doesn't understand. This is a familiar problem.

It's truly ridiculous how many people are killing them selves out there without a reasonable web presence just because they donít understand the potential thus scoff at the investment. Itís frustrating for any web developer.

My best suggestion would be selling him a web presence in steps. Start with an investment he is comfortable with and be sure to communicate the likely Ė then deliver more than he expects.

A few months latter, after you know he is getting more inquiries, you can harass him for more work, sighting the exponential benefits.

Of course, this wonít work if there is significant competition. The nature of the web and search engines is that the first dollar invested returns far less than the 10,001st dollar.

So, work is work. Just get a clean contract with a bottom line.

12:09 pm on June 4, 2007 (gmt 0)

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COMMISSION!
5:03 pm on June 4, 2007 (gmt 0)

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if i hired someone to increase my website traffic and they mentioned what you're saying here, i'd think you're out of your mind, laugh and hang up the phone.

i think what you're asking is out of line for the sort of business you're talking about.

Re-read the original post.

It seems it's the business owner who is nuts, not the poster:

They want me to increase sales and profits using the internet

As others have pointed-out, the poster can generate leads using the Internet. The business owner is responsible for increasing sales and profits.

5:20 pm on June 4, 2007 (gmt 0)

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This is lead generation in its simpliest form.

Determine with the client the amount they are willing to pay for a lead. Certainly there must be some historical costs (yellow page advertising, newspaper/magazine advertising). If one newspaper ad for $100 generated 2 leads, that's $50 per lead. If you spend $100 in internet advertising, and generate 4 leads, you just reduced their cost per acquisition by 50%. You can develop this into a sales pitch, but the pitch here has complete measurable outcomes.

Work with the client to determine an online advertising budget, your costs to manage it, all geared towards cost per lead. It is up to them to close the deal, but you profit from getting them leads.
justablink

6:40 pm on June 4, 2007 (gmt 0)

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I think there's another problem here, on that is common in web development regardless of payment philosophy.

If the client is paying for leads rather than the website, will he be willing to develop content?

For me this is the critical path. People want a website so they call up a web developer and say, 'build me a website.' What they don't understand is what they are asking is like calling a book publisher and asking them to publish a book, which is fine if you have money - and a book.

The analogy I always like to use is, "writing for a website is like writing a book."

Come to think of it, I had an opportunity to create a site under similar circumstance, even agreeing to write the content myself.

Quality content being the key, I required certain materials from the client for study, but they never came and I moved on.

7:55 pm on June 4, 2007 (gmt 0)

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Have an online coupon so that the sale can be tracked as originating from you. A web form with email leads or a click-to-call solution where the calls can be tracked would be good also. Then you take x% of the sale after they close it if it originated from you. Of course you have to trust that they will give you credit...
 

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