Pricing Results Based Consulting

Dont do it, this is not a method you want to take on as a rookie....unless you are financially independent already and just want a challenge.

You mind giving your reasoning, Eddie? Because "don't do it" without any reasoning is not helpful.

Hi Paul

I would advise that you put a few controls in place to prove how well you marketing is performing. For example:

Website Tracking: Start tracking the number of visitors a month before you start your marketing, this way you can demonstrate your efforts directly increased website traffic.

Contact Me CC: On the website "contact me" form, make sure you are copied on any submissions, or at least have access to the email account in order for you to measure how many summisions were made before/after your efforts.

Phone Number Tracking: There are several very inexpensive phone number tracking options available that will allow you to track the increase (hopefully) in calls once your begin your marketing.

All of this is designed to measure and prove that your marketing expertise was the reason for the increase exposure and leads. Not that clients want to take all the credit, but it shows a track record that you have a direct positive effect on their business.

I provide done for you marketing in a specific niche, this a monthly fee plus % of profits generated and it works great.

There are a couple of reasons I am against results based consulting.

1. If they don't execute correctly you don't get paid.
2. Since they haven't paid they don't have skin in the game. They also tend to respect your advice less. We value what we pay for.
3. If the solution works really well they will come to resent you and feel they are paying you too much.

If they do bad it turns into a nightmare. If they do good it turns into a nightmare.

Also keep in mind that the people you are reading who are doing this well, like Jay Abraham already have a lot of clout in the maketplace, they work with big deal potentials and have a staff of people to make things happen and are lawyered up to insure they get their loot.

You Don't know what you don't know.

You cannot control what the client DOES NOT DO.

You maybe astoundingly excellent at what you do, but....

Clients CANNOT be relied upon to deliver the necessary resources on time - ever.

They will then use any excuse not to pay you when they F***K up.

for example...

Will they give you ad copy on time?
Will they give you pics & images on time?
What happens if they have a dunt in their cashflow and cant pay you?
What happens if they get a legal suit and simply wont pay you?

...and you end up missing a deadline as a result or not achieve the results you want?

They will use their "cockups" as an excuse NOT to pay you.

All actions and inactions have consequences...
...HOW DO YOU DEAL WITH CONSEQUENCES?

They will hold you accountable and will not want or like to be held accountable themselves.



Hope that makes sense.

Regards


Fraser
P.s. And remember they will change a "profit" by introducing all sorts of costs u never thought of, (but they will) to ensure they pay you less.

Thanks mak. Best response ever.

Ready, FIRE, Aim, FIRE....

On the one hand:

Jay Abraham could do it because he is Jay Abraham and has the resources.
On the other side of the coin, his clients - like Oracle - have the resources
to pay no matter what.

Your clients may have no problem with the work you did, but maybe a
"huge to them" unexpected personal or business expense occurs and
they can't pay you because they are a small, local business.

And, what happens if you think you did your job very well and it's their fault they
did not close the new leads, or carry out satisfactory customer service... and
they think your stuff did not work?

On the other hand (since you're probably going to give it a whirl anyway):

The measurement has to be based upon a baseline "before Paul" and then
compared to "after Paul". And, it has to be for a specific idea or project
to eliminate variables. Very hard to do.

Examples: I used to sell private label SEO that came with a guarantee.
A caveat being that the client could not do anything else SEO related.
Can't control most client's implementation of what they think is a good
idea and is possibly SEO related.

My hotel is up about $10,000 per month from last year, but about the
same as two years ago. Is it because of my year of positive Trip Advisor
and other online reviews and initiatives, etc? Or, is it because the skiing
is better than last year, or that gas is a little lower?

Then you have to figure if, from your initiative(s), you are getting a
percent of gross revenue increases, or revenues minus expenses and/or
taxes, or net profits...

Anyway, if you do it, the first time(s) have the time and resources to
do it on a friendly, experimental basis with your friends. And, make
sure it's clear it's experimental. (Of course you still get paid, just saying
you both try to keep it friendly and not life or death.) It is very easy for
hard feelings and disputes to arise where money is involved and it's not
about the "money", it's about the principle and ethics and feelings
surrounding the dispute.

Dan

P.S. - As the saying goes "Don't let barking dogs slow the caravan".

P.P.S. - I saw a fortyish couple try to build their own home while living in an RV
on the lot. They really did not prepare, know what they were doing, and I have
no idea how they obtained any financing at all. They had bedrooms that were
not legal bedrooms, etc., etc., etc., ... They went under and had to do a
bankcruptcy and start their lives and careers completely over.

An experienced person with a budget came in and bought what was left
of that effort for the price of a building lot. They proceeded to quickly
build a very nice home three times the size of the previous effort.

Good luck.

Your friends are in business... they're above reproach... you trust them completely...

Ever heard the old movie line... "Nothing personal, just business."

If your friends are successful in their businesses they understand
that line 100%. They have their own definition of what constitutes
good results. They also have their ways of doing things that may
hinder what you want to do... timelines, deadlines etc...

When they put their business hats on they may very well stiff you
just like anyone else and they'll BELIEVE they have legitimate reasons.

I think this is going to be a very hard lesson for you to learn.

As I told you in the other thread where this was discussed... unless
you have TOTAL control of every phase of the project and specific
milestones for measuring increased revenue and profits as well as complete
control of how all that money appears on the books... GET IT UP FRONT OR
PLAN ON NOT GETTING IT AT ALL.

The building-a-house analogy is not a good one with regards to starting a business. With a business, it's more like you are setting up a tent in various locations to make sure the hunting is good before building a hunting cabin.

Once you are convinced the area woods are full of game, expand the cabin into a nice hunting lodge.

I LOVE Mak's post. So many people spend time researching things, buying a new laptop and desk, talking strategy, all to make themselves believe that they're actually doing something because they don't have the confidence to go do it. It makes them feel good, but produces nothing. Been there myself at times. Then they (or I in the past) get all indignant at other's recommendations because they're really speaking the truth and sometimes the truth hurts because it points out that gaping hole in your own confidence.

Paul, you can spend forever trying to get everything accounted for and perfect, or go do something. Perfect will never happen. If nothing else, think about this. I've seen a few of your posts where you have told long time successful marketers that their advice is horrible. What have you done in the marketing arena? Wake up and listen. Face the demons that are holding you back. For me that has been both a lack of confidence and fear of success because this means so much to me. What's holding you back for real? Think about it and face it. I finally am, as I have a campaign starting as soon as my printed materials come in.

Here is the other folly of asking all these questions and trying to get things perfect.

You already had a preconceived notion of how things are SUPPOSED to be done,
your questions seem to be seeking answers that conform to your pre conceived notions rather than seeking real unbiased advice. You state yourself how you just started your business 6 weeks ago, you may be a great musician and a resourceful home builder BUT you are not a successful businessman yet, let go of your ego.

(As someone else has already noted, you want to "argue" with experienced people giving you good advice and you are criticizing their delivery method rather than listening to the message)

Just like the small biz owner who you are trying to convince to do a certain method, you can sell it till your mouth falls off just like we can type advice to you till our fingers fall off BUT the only real test is if its viable is to just FREAKIN DO IT!!

If you are already convinced that something will work and people in the know say it wont, then screw them , just do it and find out for yourself.

"I can do this one of two ways, Mr. Prospect. Pay me purely based on results. That would be 25% of gross sales per month, which according to the figures we worked out is possible, would be $LotsaMoney. Then I also need you to sign off on my accountant being able to audit your books. Or, a simpler way, you can do a monthly retainer of $MuchLessThan25%. Which would you prefer?"

This guy is a HUGE egomaniac, everything is about him.
Wonder if that comes across to people he is pitching.

This man asks for opinions then critiques the tone in which they are being delivered.
If you dont answer the question to his satisfaction AND deliver in the right way , all of the sudden you are RUINING HIS CREDIBILITY.-lol

Get a grip man!!!
You are about as credible as a homeless guy wearing a "will work for food" sign.

Yes Paul this WHOLE internet board is teaming up against YOU.
Oh no . please stop hurting my feelings, Im very sensitive.


This is all in good fun, I hope you can realize this and laugh about it one day and say
"Man those WF guys gave me a hard time, but I really deserved it!, Thanks for being real guys"

Seriously and sincerely I hope you do well Paul, you seem to have a good heart and perhaps that is one reason you are being so overly sensitive around here.

Google "David Abingdon"

He runs the Alchemy business coach franchises.

He's been paid a few million by working for a share of increased profits.

Hey Mak25, I'll pay you to give me a kick in the a** like that! I get stuck on this d**n forum and get paralyzed. :p