I want a piece of the action that I get for getting people on first page.

Nice one....

Listen, it's hard not to get too greedy but you know (no affense ya?!).. I'm working with the same model and the only way to get a piece of the action is by affiliate program, somehow...

You can't track the activities behind the scene, except the trust factor...

I like your thinking, and your recent contributions to the forum teaball! Keep'em coming!

My only concern would be the tracking complexities/legalities involved with stuff like this. Relying on humans and not machines for tracking seems to always end up in a headache for me. In pursuing the lead generation model I have also come across A LOT of legal stuff that I had NO IDEA existed.

I live in California, and take health care pros or real estate agents for example. It is illegal to take "referral commission" for these segments, so charging a monthly or "marketing fee" is really the only way to go about it.

Every state is different, but I was surprised to see a lot of barriers in a lot of "high paying" fields that I was not expecting. Still, plenty of $$$ to be made by everyone by marketing these industries, I just encourage folks to do the legal research.

- Jim

Isn't it a shame when the green-eye mistress called Greed raises her ugly head?

When I pay a mechanic to fix my truck so I can haul my product to market, there's no way in hell he's entitled to cut of my income.

You offered a service. You were/are being paid for it. If you want constant payment from a client, set up a constant service that warrants continued payment.

Pete

I use to own a car rental company and would locate at car dealerships and hotels giving them 10% of my revenue or $800 month whichever was greater. They provided the area for a rental counter and space for parking cars and the dealerships provided an area for washing cars. I was providing a service for their customers that brought them more customers and those greedy owners wanted a cut of my revenue.

I understand what your trying to do. Maximize revenues. I don't believe your idea of a revenue share wouldn't fly with just about anyone I know though. It's like saying ... open your bank account.

If you were in very similar or complimentary industries like an accountant/lawyer or HVAC/Plumber relationship it might be doable but it's not like you're in a business partnership or a member of the same company.

I'd offer an idea of sitting down and really thinking about your products, services and pricing structure:

Either charge one time transactions
Charge a recurring fee for service
Have a model with a combination of both

Look at where your value is to the client and what will help you sleep at night. The more recurring fee and passive income you can generate, the less these issues will be present.

From there, you should be golden.

In all honesty I don't think you deserve more then a finders fee for getting the client. How much the professional is able to earn on that client has a lot to do with their skills, knowledge, credentials, and credibility in their industry after you've done your job.

What they are able to earn after that, your not entitled to in any way. As Kay mentioned, its one of the reasons why some industries are regulated these matters.

I recently posted about setting up "pay for performance" offline types of deals in my blog. There's a link to it in my signature link... I'll be posting more updates in the coming days/weeks.

Someone above mentioned that you can't track these things and you have to rely on trust. To an extent, that's true, but many things in business boil down to trust. People don't pay people every day... you can never guard against that 100%.

You simply put an agreement in place and go from there. If someone doesn't pay you on a revenue split type of deal, then you quit working with them. Of course, there are even ways to set these up with some businesses where you can track results, audit what they did if necessary, etc.

I personally believe that most people are honest and I have an abundance mindset in my life and business.

Poor lawyers? I have never seen a poor lawyer and the reason is they are smart.

They know by paying $50 per click on adwords they will get paid ten fold the amount it cost them to get the new client so why would they pay you an ongoing commission?

They see you as a lead generator not a partner, just like adwords or the good old Yellow pages.

Kay King said everything I've been trying to say all along:

"Real estate agents/brokers here can't legally give you part of their commissions (in many states) if you are unlicensed in the field. Attorneys are often the same but can pay leads fees or perhaps finders fees. Medical practitioners include dentists and are also regulated by federal and state on how they can pay outside people.'

So, like I said, ASK the questions, then price accordingly. If client tells you he can expect $XXX over the life time of a client, take that into consideration when you're pricing your package.

Pete

Contrary to popular opinion, there are many types or derivatives of "pay for performance" arrangements in industries and sectors of the US economy, outside of the contingency fee. Malls, franchises like McDonald's, and inside franchises like a Coke and Coke products exclusive.

Consider mall stores, or shopping centers. In general, the stores pay "percentage rent" to the mall/center owner. They pay an agreed upon (sometimes negotiable) percentage of their annual/monthly gross revenues. Yes, you have to open up your books to them ... usually just showing the local sales tax filing each month.

R.E. developers and buiders usually have an in-house (employee) licensed realtor to show and sell their model houses.

The "lead-gen" model seems possible if you are inside a law firm, with some minimum payment to make it legal for the lawyer.

I'm using the lawyer idea because it's difficult to figure, and, may hold the seed to how to do this for other high income professionals in the U.S.

Many of your comments are really interesting and have me thinking broader now. I'm going to speak with my lawyer customer this week, and ask him what he thinks. Sizeable law firms have one or two people that do nothing but make it rain. Rainmakers rarely litigate or handle the case much past getting it in-house and the primary filings. Usually the case is handed off to a specialist junior partner and his/her staff of junior lawyers and paralegals.

The rainmaker gets a pre-arranged share of the pre-tax income generated by each case, over and above his salary.

So, the real question of pay for performance with a law firm has to be answered by how the arrangement is made legal.

Of course, looking farther down the road, what happens when you bring-in a client case that wins big bucks, and then the lawyer wants to welch on the deal? It could get ugly if you haven't planned for that contingency.

I think lawyers can figure a way around anything, even their own state bar code of conduct, if they want to bad enough. (Remember the old prohibition against advertising?)

I suspect that most would not want you to work for any other lawyer, but if you already have successes with other lawyer specialties, that shouldn't be a problem.

There are many sides and angles to this idea. It might just be applicable to other types of services.

Pay-for-performance is not some thuggery. It's a high level refinement of the business arrangement common in many industries, like the arrangements between a big oil company and the numerous business entities they work with in their various functions: exploration, drilling, refining, transportation, distribution.

Look, local search IS THE ultimate place that internet business will land. And, if that is correct, it will be a monstrous industry. Huge. Billions.

So, call yourselves pioneers but that's what my vision for local search/SEO generated sales will become. Eventually, there will be lots of firms doing these functions exclusively because it will be too expensive to do it in-house. Like local Ad agencies, they will likely morph into doing this, if they haven't already started.

That's just a part of my visioneering for internet biz. We're still in the Stone Age of internet marketing and its sub-sector, local search.

Ask yourself, why do people in certain industries pay seemingly ridiculous up front flat fees to lead generators? Why?

Could it be that they know better than anyone how incredibly valuable a really good lead is worth? Could it be that the $100 CPA-lead for mesothelioma is worth millions to them? But, it also may not be worth diddly. That's where the pay-for-performance factor becomes a viable alternative for finding leads/new customers.

All the above assumes one huge thing: you can do everything you assert - 1st page, qualified leads from 1st page, clients that develop into "rain".

About 30 years ago, a very smart man told me that "you can always find people without any imagination. They are right where you last saw them."

I have found that to be profoundly true. Add some determination, commitment, and action to some imagination, and you never know where you will find that person.

Well, I'm still just brainstorming here.

TB

I'll play devils advocate and say that one SOLID reason, that I've had personal experience with, NOT to charge on a performance based level like you want is that you're relying on the ability of the client to close deals, track, be honest enough to share, and not waste leads.

In my experience, most companies don't make use of their leads anywhere NEAR the potential that they could. On top of that, if you ask most small business people where a recurring client came from (I mean the actual lead source) they'll tell you something... but many times that something will be wrong. i.e. They'll think that person was a personal referral because they've built a relationship with them when in fact that person came in from a postcard mailing. (trust me, it happens A LOT).

So, how can you reasonably expect to be paid on a future value of these customers if the business owners can't track them?

They're certainly not going to let you micromanage their business... and to be honest, it would be a NIGHTMARE to even try if you had more than 1 client.

And what about all the leads that the client CAN'T close? Are you just going to accept $0 for those?... because generating them cost you the same amount as generating a paid client.


That's why a cost per lead program is significantly more efficient (and many times considerably more profitable in the long term).

Why do companies like LendingTree do cost per lead? Because they get their cash up front (cashflow), don't have to wait for a transaction to occur between the vendor and lead, and continue to "make it rain" quickly.


If you want to monetize the leads you're driving for more than just the CPL value to your clients you could:

1. Collect the leads on a co-reg basis (meaning both of you keep the lead) and continue to market your own offers to them. (careful on privacy policies and such).

2. Sell your leads on a non-exclusive basis to 2 or more clients in the same niche (happens all the time).

3. Promote back end offers on your thank you pages. If you're promoting a real estate lander looking for new home buyers, maybe the thank you page is a free credit report CPA offer.

4. Sell leads to NON-competing businesses (disclosing it to both clients). i.e. new home buyers to both real estate agents and loan officers.

5. Sell "expired leads" in bulk to call houses and other telemarketing companies looking for that specific demographic.

etc.

Also keep in mind that this means you should own the web property and not be doing contract work on a clients web property.


The value to you is in the LEAD... not in the clients ability to harvest that lead.

In the case of the lawyers, you cannot get a piece of the deal. (at least not here in Ohio). Also, keep in mind that these cases often take YEARS to get settled. Will cut into your cash flow quite a bit!

This is exactly why I RENT websites, not sell them. I build a site for
a generic legal function "accident-lawyer.com". Get it ranked by the
search engines, then tell the lawyer how many "uniques" it gets and
let him tell me what it might be worth to him - every month.

Hugh

My first thought at the beginning of the thread was to have a sort of 'membership' site or a leased site per profession, if they decide to go with someone else you're still keeping the rankings etc..

as for pay per performance as SEO consultants... we limit ourselves to one customer within a certain geo-sector. Just throwing this out as part of the brainstorming... why not let the clients bid on their ranking? If we are able to capture the local city + keyword we could essentially allow for more than one client per profession.
Platinum gets top ranking, gold, silver (or whatever names). probably wouldn't do more than 3-4 levels max

Rather than a straight pay per performance... have them pay for exclusivity..?? since otherwise we limit out market to one profession in an area.


Christine