Am I charging to much for my leads?

14 replies
I built a website for a group of online consultants. They charge 60€ per consulting session (of 60 minutes). The deal we made was that I would build the site and bring in the traffic/clients. For this I would get paid a commission on every sale. I know a couple of these people fairly well, so there was no contract drawn up. We agreed that I would get 15€ out of every 60€ sale.
The site became successful almost instantly due to no competition and now I'm making a reasonable amount of money from it. But apparently there are some people saying my cut is to big, because i'm making more than the consultants.
There haven't been any heated discussions yet, everything is being handled respectfully from both sides. We're trying to talk it out.
They claim 25% is to much. I think it isn't. I'm bringing in 15 clients a day, 6 days a week. So they make a nice amount of money, working only a couple of hours a day from the comfort of their homes. I feel that is a service that is worth 25%.

Do you think 25% is to much or is it a fair percentage?
Are you in a similar situation, how much do you charge percentage wise?
#charging #leads
  • Profile picture of the author Shaun OReilly
    As a business person, I'd look at the lifetime value of
    the clients being brought into my practice from your
    site.

    Even at first blush, paying 15€ for a one-off 60€ session
    sounds like a good deal. At least I don't have to go to the
    trouble of finding the clients, etc. which gives me more
    time to deliver the service that earns the money.

    Do you also get a cut of all subsequent consultation
    sessions for each client you bring them?

    Are these experienced business people you're dealing
    with or nickel 'n' dimers?

    Get them to focus on the VALUE that you're delivering
    to them, instead of just the cost.

    Dedicated to mutual success,

    Shaun
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  • Profile picture of the author zerofill
    They can ether pay that 25% and get the leads, or not get them at all right?

    They have any competitors in the same area that might like those leads and not cry?

    Do they make more with you, then without you?

    They could be paying you a flat fee for every lead, which could cost them much more in the long run, instead of paying you only on ones that convert. Maybe you should remind them of that?
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    • Profile picture of the author Cali16
      Originally Posted by zerofill View Post

      They can ether pay that 25% and get the leads, or not get them at all right?
      Exactly! Not to mention, they agreed to your price up front. If they think you're charging too much, then let them build their own site and figure out how to get traffic to it. Most likely that will quickly make them realize the value of what you've done and continue to do for them. But, I wouldn't lower your price if you're bringing that much business in for them.

      Before things go any further, you might consider having a formal contract drawn up (by an attorney) with the original terms to which they agreed. They can either sign it or not. That might sound a bit hard core, but it seems to me they are really not fully grasping the value of what you are providing for them.
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      • Profile picture of the author belgianguy
        Originally Posted by euraffiliates View Post

        Absolutely not.

        I believe you deserve more than you get it now.
        I actually felt my percentage was very reasonable as well. But since I had no experience with this kind of business before, I didn't know what a fair percentage would be.

        Originally Posted by Cali16 View Post

        Before things go any further, you might consider having a formal contract drawn up (by an attorney) with the original terms to which they agreed.
        That's a good idea. Thank you
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  • I think this is fair as you are introducing business to the consultants that they would otherwise not have.

    However, if they continue to feel disgruntled you may find they become more inquisitive with regard to your marketing methods and attempt to remove you from the loop entirely.

    I would perhaps come down on the price point/rev share slightly if they commit to a min weekly volume - this way you are getting a guaranteed order from them week on week and they will feel they are getting you down on price.

    Alternatively you could find other consultants willing to pay for your leads and create further demand which would stabilise the cpa. Perhaps it would be better to express it as a $ amount rather than a % (in future) as 25% sounds high, however $15 does not.

    Good luck with your negotiating, it can be hard to get people outside the industry to see the value/skill in what we do.

    Please let us know how you get on!
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    • Profile picture of the author belgianguy
      Originally Posted by Shaun OReilly View Post

      As a business person, I'd look at the lifetime value of
      the clients being brought into my practice from your
      site.

      Even at first blush, paying 15€ for a one-off 60€ session
      sounds like a good deal. At least I don't have to go to the
      trouble of finding the clients, etc. which gives me more
      time to deliver the service that earns the money.

      Do you also get a cut of all subsequent consultation
      sessions?

      Are these experienced business people you're dealing
      with or nickel 'n' dimers?

      Get them to focus on the VALUE that you're delivering
      to them, instead of just the cost.

      Dedicated to mutual success,

      Shaun
      - I also get the same cut for all the subsequent consultation sessions. Customers normally come back once every 3 to 4 months. Offline that is, we'll have to see if this is the same online. We have only just begun.
      - they aren't experienced business people at all, but I would'nt call them nickel 'n' dimers either



      Originally Posted by TotallyAffiliates View Post

      I think this is fair as you are introducing business to the consultants that they would otherwise not have.

      However, if they continue to feel disgruntled you may find they become more inquisitive with regard to your marketing methods and attempt to remove you from the loop entirely.

      I would perhaps come down on the price point/rev share slightly if they commit to a min weekly volume - this way you are getting a guaranteed order from them week on week and they will feel they are getting you down on price.

      Alternatively you could find other consultants willing to pay for your leads and create further demand which would stabilise the cpa. Perhaps it would be better to express it as a $ amount rather than a % (in future) as 25% sounds high, however $15 does not.

      Good luck with your negotiating, it can be hard to get people outside the industry to see the value/skill in what we do.

      Please let us know how you get on!
      - The will not try to remove me from the loop. I know this because they wanted to use the web for years to expand their business, but were so afraid of the technical nature that they decided not to. So, they wouldn't be able to duplicate what I did even if they wanted to.
      On top of that, the site is still mine. I built it, I own it. If they want to cut me out of the loop, they lose the site and their clients. Having a professional build a site like that would cost them 1000's of dollars. And then they would still have to hire someone to get the traffic back (and compete with me :-) ).

      - It's not possible to have them commit to a min weekly volume. As of now, all clients are served, so they cannot serve more people. As the traffic goes up (we are only doing this for about a month), the number of clients will go up. And so will their and my revenue. The market is huge and I expect that in 3 - 6 months time we could have 10 consultants working full time on this. Gotta love local markets with no competition.

      - We never spoke of percentages, because I too felt that 25% sounded like a lot more than 15€. I used the percentages just for the sake of this thread.
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  • Profile picture of the author euraffiliates
    Originally Posted by belgianguy View Post

    They claim 25% is to much. I think it isn't. I'm bringing in 15 clients a day, 6 days a week. So they make a nice amount of money, working only a couple of hours a day from the comfort of their homes. I feel that is a service that is worth 25%.

    Do you think 25% is to much or is it a fair percentage?
    Are you in a similar situation, how much do you charge percentage wise?
    Absolutely not.

    Normally an established business of this type offers 15% to 30% commission to an affiliate just for referring a client. Popular and established businesses offer less while new businesses offer more.

    But here you deserve more. Because you have created the website. And you have been creating (not just referring) clients since the time where there was no client base. I believe you deserve more than you get it now.

    However, this is just my personal opinion. I hope they will understand your hard work on their business.
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  • Profile picture of the author bobmcalister
    interesting situation...what service do they provide ? is it only applicable to Europe ? if not, why dont YOU service the clients and keep it all ? I am not a selfish person, yet it they feel they can do better without you , give them the reins and see what happens. nothing better than for them to learn by doing ? keep us posted...
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    • Profile picture of the author belgianguy
      Originally Posted by bobmcalister View Post

      interesting situation...what service do they provide ? is it only applicable to Europe ? if not, why dont YOU service the clients and keep it all ? I am not a selfish person, yet it they feel they can do better without you , give them the reins and see what happens. nothing better than for them to learn by doing ? keep us posted...
      - They know they need me and they have in no way threatened to go on without me. We are just discussing the terms of the agreement, even though we agreed on 25% before. I just need to make very clear what I bring to the table and what value that has.

      - This service can be offered in any country, provided you speak the language and are a trained professional. I can not offer the service myself, for two reasons. I am not trained for providing it and there are too many customers. Currently we are at about 15 customers a day who purchase a 60 minute session. So, that would not be doable for me.
      Plus, I make more money by simply connecting the consultants with their customers.
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  • Profile picture of the author Janice Sperry
    What you are getting is fair and may even be on the low side.

    This is win-win but they may not appreciate it since they are not as experienced. Instead of lowering your cut maybe you could suggest they raise their prices. That would show them you are meeting them part way on a new agreement. If they went to 70 and kept your cut at 15 they may still bring in the same amount of new leads.

    The fact that you are also getting 15 on the customers future consultations is a sweet deal and I am not sure that part of the agreement is common (I don't do offline work).

    You might also think about another website that targets a different geographical area that is not their competition. Charge even higher rates. When you start getting leads there you could show the first group they are getting a great deal.

    Definitely get a contract! Your attorney should also consider some wording that you are the owner of the website. Even amiable business relationships can turn cut-throat overnight.
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    • Profile picture of the author belgianguy
      Originally Posted by Janice Sperry View Post

      What you are getting is fair and may even be on the low side.

      This is win-win but they may not appreciate it since they are not as experienced. Instead of lowering your cut maybe you could suggest they raise their prices. That would show them you are meeting them part way on a new agreement. If they went to 70 and kept your cut at 15 they may still bring in the same amount of new leads.

      The fact that you are also getting 15 on the customers future consultations is a sweet deal and I am not sure that part of the agreement is common (I don't do offline work).

      You might also think about another website that targets a different geographical area that is not their competition. Charge even higher rates. When you start getting leads there you could show the first group they are getting a great deal.

      Definitely get a contract! Your attorney should also consider some wording that you are the owner of the website. Even amiable business relationships can turn cut-throat overnight.
      - I already tried to get them to increase their price, but they refused.
      - I could target another area, but the type of consultancy they are providing is very specific and for some reason only available in France (although it can be offered world wide). The problem then would be that there is no one to buy the leads.
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  • Profile picture of the author altoro80
    I think they have a good deal with you, because you get the traffic every day, they just do the consultation, if you didn't get the traffic they wouldn't have any consultations to do, so is either they give you the 25% and you both make money or you keep doing your thing somewhere else making money and they struggle to get the clients.

    Just what i think.

    Alex
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  • Profile picture of the author bobmcalister
    is the product/service one that can be sold via videos or ebook? maybe that way , you can expand into other areas and just pay them a percentage of the products sold. I can tell you from experience, that it is MORE important to get written agreements between friends and family than it is for strangers....good luck
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    • Profile picture of the author belgianguy
      Originally Posted by bobmcalister View Post

      is the product/service one that can be sold via videos or ebook? maybe that way , you can expand into other areas and just pay them a percentage of the products sold. I can tell you from experience, that it is MORE important to get written agreements between friends and family than it is for strangers....good luck
      Unfortunately it cannot be converted into video or ebooks.
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