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What to Charge New Client?

by Gary Gomez
8 replies
I've been offered an opportunity to work with an offline company that wants to develop their web presence.

They are wanting to do it on a results only basis, but this is not something I have ever tried before.

The market they are in is pretty easy to dominate as their are no affiliates in their industry and the only other companies ranking are there more by luck than management. They have an aged domain with over 5k pages indexed but their SEO both on and off page is pretty shocking to say the least

As such its quite an exciting opportunity as the long term rewards could be quite considerable, but it will take a lot of hard work before there is a payback.

Does anyone have any experience of doing this sort of thing? My initial thoughts were to charge 10% of turnover for all business brought in to the site with at least a 12 month contract.....is this the right area to be working in or am I miles out?

I just need to get a feel for whatever anyone else is doing before pitching an offer to them and going further into contracts etc.
#charge #client
  • Profile picture of the author gjabiz
    Gary,

    It depens on what information they are going to provide to you. Do you have total access to their results? Will they pay you on gross or net of new business? Beware of accountancy VOODOO, which could really pay you almost nothing.

    IT can be lucrative, as long as you know the before and after and you could work on a small advance against results.

    This way, you have a little something coming in and if you do well, then it could be a lot.

    Good luck,

    gjabiz
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    • Profile picture of the author Gary Gomez
      Originally Posted by gjabiz View Post

      Gary,

      It depens on what information they are going to provide to you. Do you have total access to their results? Will they pay you on gross or net of new business? Beware of accountancy VOODOO, which could really pay you almost nothing.

      IT can be lucrative, as long as you know the before and after and you could work on a small advance against results.

      This way, you have a little something coming in and if you do well, then it could be a lot.

      Good luck,

      gjabiz
      Thanks gjabiz,

      To add some further details to my first post, I have given them some very basic advice on a Consultancy basis which saw their site go from 0 sales in July, to about $6k a month as we speak.....as a result they look at me as someone who can produce results

      This has what has given them the appetite to push further and is where their suggestion for a results based service has come from.

      I already have access to their full backend and all sales from their website are tracked independently from their bricks and mortar business. It would be a case of actually working in their offices to get this launched properly so I would be able to see first hand how things are panning out.

      The actual business is a distribution company but the barrier to entry is pretty big so only existing businesses in this area appear in the SERPs and none of them have hit the niche hard as we speak.

      I would prefer a payment based on gross earnings rather than nett as it would be more transparent and easier to track I think......I just don't want to pitch too low to not make it worthwhile but neither too high to put them off. Hence my thread to see if anyone else has ever done this sort of thing.
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      • Profile picture of the author The Offline Advisor
        Originally Posted by Gary Gomez View Post

        Thanks gjabiz,

        To add some further details to my first post, I have given them some very basic advice on a Consultancy basis which saw their site go from 0 sales in July, to about $6k a month as we speak.....as a result they look at me as someone who can produce results

        This has what has given them the appetite to push further and is where their suggestion for a results based service has come from.

        I already have access to their full backend and all sales from their website are tracked independently from their bricks and mortar business. It would be a case of actually working in their offices to get this launched properly so I would be able to see first hand how things are panning out.

        The actual business is a distribution company but the barrier to entry is pretty big so only existing businesses in this area appear in the SERPs and none of them have hit the niche hard as we speak.

        I would prefer a payment based on gross earnings rather than nett as it would be more transparent and easier to track I think......I just don't want to pitch too low to not make it worthwhile but neither too high to put them off. Hence my thread to see if anyone else has ever done this sort of thing.
        No doubt the reason they want to do this on a results-only basis is that there is no budget provision for this project - you've come "out of the blue." Therefore your cost to them must be self-liquidating i.e., recovered from the revenue you produce.

        But the other side of the coin is that every dollar you generate in sales is a 'new' dollar they weren't getting before - and for which there was no revenue forecast, either. You've already generated for them a brand new $72,000 in annualized income.

        So it's reasonable that, in return for the higher risk you take (no assured minimum) that you should be entitled to a higher reward. Certainly higher than 10%.

        I agree that you should insist on at least a 12-month contract - with an option to renew for a further 12-months. I would suggest starting at 20% of the gross and settle for 15% if you had to.

        But again, this is money they weren't getting - so don't be shy. In my consulting I say, "Here's your choice: you can keep all of a 'grape' or 80% of a 'watermelon'. Do you want me to help you grow watermelons?"

        Good luck.
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        Business advice from a bona fide Business Consultant

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        • Profile picture of the author seanpearse
          Originally Posted by The Offline Advisor View Post

          In my consulting I say, "Here's your choice: you can keep all of a 'grape' or 80% of a 'watermelon'. Do you want me to help you grow watermelons?"
          lol i like that.

          on topic though, you have a very interesting dilemna. I think I would be more inclined to base fees in that situation on the amount of traffic (unique visitors) the site receives as a result of your SEO campaign rather than gross or net profits/turnover. The figures from analytics are clear and cannot be argued with and unless you are given full access to their books there is always going to be arguments about actual figures. This way also leaves the onus entirely on the business owner to convert the sales once you get the prospect to the site.

          Either way....best of luck
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  • Profile picture of the author tigerbait
    I would take a long tail with little competition, and seo them to the top. Shouldn't take more than a week. Screen capture the results before, then show them the after.

    That should easily be enough to get you a contract and some $$ for your work going forward. Unless they will give you control over every aspect of their website, there's no way I would ever do work based on "results & profits" of the campaign. Just because they're ranked #1 for a keyword doesn't mean the page will convert visitors into customers. So working on a profit based contract with little control of the sales process is lose-lose in my mind.
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    • Profile picture of the author Gary Gomez
      Originally Posted by tigerbait View Post

      I would take a long tail with little competition, and seo them to the top. Shouldn't take more than a week. Screen capture the results before, then show them the after.

      That should easily be enough to get you a contract and some $$ for your work going forward. Unless they will give you control over every aspect of their website, there's no way I would ever do work based on "results & profits" of the campaign. Just because they're ranked #1 for a keyword doesn't mean the page will convert visitors into customers. So working on a profit based contract with little control of the sales process is lose-lose in my mind.
      Thaks for your suggestions tigerbait,

      Ive already produced some results so they know what the potential is for them if I were to work on things full time.

      The work would also involve on page optimisation as well in order to maximise CTR and sales so this gives me good control over the sales process.

      Im in the fortunate position to be able to invest my time without needing early payment so am looking at the long term potential of this opportunity rather than just billing for hours worked. I'm hoping its a win-win for all of us......I just gotta make sure I dont sell myself too cheap
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      • Profile picture of the author tigerbait
        Originally Posted by Gary Gomez View Post

        Thaks for your suggestions tigerbait,

        Ive already produced some results so they know what the potential is for them if I were to work on things full time.

        The work would also involve on page optimisation as well in order to maximise CTR and sales so this gives me good control over the sales process.

        Im in the fortunate position to be able to invest my time without needing early payment so am looking at the long term potential of this opportunity rather than just billing for hours worked. I'm hoping its a win-win for all of us......I just gotta make sure I dont sell myself too cheap

        Makes sense. Not sure we really have enough info to give you the detailed help you're asking for though. It's kinda like... "hey, I made this company 6k in 4 mos, what should I charge them? they wan to pay for results only". There are a lot of variables to take into consideration really. But I'm sure you'll figure it out.
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  • Profile picture of the author tigerbait
    One thing I would suggest is to figure out how much you would charge for the work that you will have to do, and try to arrange your results in advance deal so that you would make that amount + a certain % more... or even a considerable amount more on what you would normally charge since you take on the "risk of not getting paid at all"
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