Paying $500 per lead?I

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I received an email form a local company that needs SEO bad, they have been burned several times, so they are gun shy...and contacted me.

They are proposing that I perform SEO on several sites, and when a customer calls in and they make a sell they give me $500.

I have seen this method, but has anyone been involved in this sort of project? Their existing website they sent me are not good, and would need some brushing up.

Any feedback would be great, thanks! :p
#offline marketing #$500 #leadi #paying
  • I would jump at this but how will you track the leads and the conversions so that they can't stiff you? You could use a custom number for the leads but how will you know if they sell to the customer?
  • I don't know if I'd be happy relying on the client to close deals in order for me to get paid. I would try to structure the deal where you get paid per phone call rather than per closed deal. You could figure out what to charge if you know their normal closing rate. Say they close 10% and are willing to pay you $500. That means each call is worth $50.
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    • I agree w/ Iolaus's approach.

      After an established relationship w/ the client, you can then move to a fee per deal type structure. However, I would be hesitant go dive in right away.
  • That seems more like a commission on sale not per lead. Sell them leads instead.
    You get paid for finding prospects, they get paid for selling to them. Otherwise,
    all the risk and expense is on you. They have nothing to loose...


    Thomas


    PS. Getting paid per sale is tough, because you have no influence or any impact on
    their sales methods and abilities.
    • [1] reply
    • Hi

      I agree with the other posters - also

      If it takes work up front - like redoing their website - you should be paid upfront.
      Why did they email you- was the same email sent to 50 other marketers?- I know you can't actually tell - but you should keep in mind that this is a possibility unless you know otherwise.
      What are the sales really worth? The answer to this will give you some insights. eg does it make sense -if they are only making $10 per sale then the chances of you continuing to be paid $500 per sale after their website(s) is fixed and they are ranked - may be somewhat limited. On the other hand if a lead is worth $2000 then $500 just doesn't cut it.

      A promise of $500 that never arrives is worth less than one actual dollar that does.

      A lot of this has to do with trust - if you know the people well and you can make a deal that makes sense to you then go for it.

      You say they have been "burned" several times- you may want to check and make sure that their expectations are reasonable and if not educate them a bit about what they can expect - if they think they have been burned but it is really the result of unrealistic expectations - or worse them actually getting in the way of you doing a good job for them then it might be best to get that fixed up - upfront.

      Cheers
      Alan
      • [ 1 ] Thanks
      • [1] reply
  • You should definitely take some money up front. Once the work is done, they can try to stiff you.

    If you're intent on getting paid per transaction, I would suggest you sit with them and find out how many leads it takes to make a sale on average. Then charge per lead (divide average amount of leads per sale by $500).

    Then set up a new website and lease it to them. This way you can control it if they don't want pay. You can control the list and go to another company in the niche, as well.

    There are a lot of dishonest people out there. Always get money up front and always get it in writing. Good luck!
    • [ 1 ] Thanks
  • Thanks wayne I will take a look
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  • I have only a few words to say... Flat fee! The commission structure that this company has proposed is only to their benefit! Too much "wiggle room" for you to get the shaft!
  • Whether I would do this or not would depend on learning more about the business and getting a feel for the owner.

    If I had any red flags pop up AND they are adamant about only paying for performance due to being burned (I can appreciate this) I would suggest a lead generation site. This is off the cuff, but here's what I'd suggest ...
    • I own the site
    • I'll do the SEO on it
    • I'd get their closing ratio, say 50%
    • With a 50% closing ratio and offering to pay $500/sale, they'd pay $250 per lead.
    I'd go in prepared. I would have already done my analysis to determine how hard or easy it would be to rank it.

    You also need to make sure you've got the skill set to create a lead generation site that effectively converts visitors to leads.

    Anyway, my 2 cents.

    Bradley
    • [1] reply
    • A quick point of terminology: a lead is a prospect, someone who has shown interest. A client is someone who has been sold to.

      So based on what you said, you'd actually be getting paid $500 per client, not per lead. Since we don't know the company's typical closing ratio, we can't know what each lead is worth.

      Too many things are out of your control in the arrangement your prospect has suggested. Most importantly, you cannot control their selling process, and therefore your revenue. This arrangement is not good for you.

      If you were able to be paid per lead, that would be reasonable. However, it would be tough to track every prospect who came in because of the SEO: those who signed up with their name & email wouldn't be hard to see, but those who phoned the company because of the results of their Google search would. If you can work a way around this issue that you and your prospect are comfortable with, then a "Pay Per Lead" plan could be the way to go ahead.
      • [1] reply
  • Yep i have to say be careful offer to take first payment up front through paypal - so they are protected if they are conerned
  • I agree with all the above and would like to also add IMHO :

    First off have them pay a up front fee to cover some of your time and expenses (They have been burnt so they should understand why you will be charging this fee) to do research on competition and keywords and then build a site. After doing this you can see what amount of leads come in so you can determine what a fair price would be to charge them per lead or lease the site to them or what the value would be to sell the site out right to them.

    For ten years I would contract from pool companies and home builders. I got damn sick and tired of the excuses they gave me for not paying what I billed for. I made the change and started dealing directly with home owners. I set the payments terms at the start. I also know exactly what was sold to the customer. I now have very little trouble getting paid. It works real well to have authorization to charge their debit/credit card as services are rendered. If the charge dosent clear then they dont use the site or get the leads.

    It is up to them to sell their service or work. Not you. You have done your job getting the lead/s to them and should by paid prior. Not when and if they sell it.

    Dont know about you but I am in this to make my life a little easier not harder.
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    Paying $500 per lead?I

    I received an email form a local company that needs SEO bad, they have been burned several times, so they are gun shy...and contacted me. They are proposing that I perform SEO on several sites, and when a customer calls in and they make a sell they give me $500.