Advice Needed - Revenue Share with Cosmetic Dentist?

How do you plan on tracking the results?

What if they get 10 customers but tell you they only got 5?

Even if they are not those type of people, how much effort are they really going to put in to track the numbers for you?

Adam,

You are correct in that it is a risk proposition for you. I am against this model because its to easy to get screwed if the owner decides at any point to not open the books to you in regards to actual patients you brought to them.

However, I think you could work it out by explaining the risks that concern you without coming across like you suspect that they might screw you over.

First thing I'd do is explain that unless they are willing to put some skin in the game and pay you some sort of monthly retainer against future commissions that are agreed upon then you are very hesitant to pursue this avenue.

They are offering this way as they at present do NOT believe that you will or can deliver, so they are expecting you to take the risk.

Tell them you understand their position, and suggest you deliver to them at cost price for X months until you start to gain XX results for them , once you do, the charge increases dramatically (eg 3 times more than you would have charged them under a normal agreement) . You are happy to take all the risk (less genuine cost to deliver) up front provided the rewards backend are superb for you as they will be for them.

If you believe you will deliver, and I am pretty sure you do and will, then this is not only win win for you, for them too, no risk , only gains for them, and even long term they'll only be paying you out of the increased profits you bring them

I wouldn't do a straight performance pay.

I regularly charge a retainer plus a percentage of Gross.

Between 5-10%.

Tracking can be quite simple, just figure out there closing ratio
and set up tracking numbers. Give your implant package a
special name that's unique to your promotion.

ADukes81,

Here is how I would proceed.....

Research how much Cosmetic Dentistry leads cost...

Establish the "value" of a lead with your Cosmetic Dentist...

Explain how all the leads will be recorded incoming calls... You will determine the "validity" of a lead....

Tell them... They're paying for leads... not sales. You deliver leads.

They close... If they cannot close, that is not on you....

If they won't work under those arrangements, you may want to look around at selling leads to her competitor...

I'm certain there are other Cosmetic Dentists who would love to have their phone ringing

All The Best,

Rich Beck BCIP, MCSD, MCIS

Adam; They are sold. I've run into this exact situation before, and know how to handle it. First, let me tell you that, even if they are completely fair people, this will end badly. They will start defining "lead" differently than you do....anything that can be misunderstood, will be.


Here's how to handle it. Act as though this is a real option.

Get an average customer value out of them. Get them to give you an estimate of how many new cases they will get a month (use the PPC figures as a base). Have them guess low. If they say "10 cases a month"...make it 6 or 7.

Get a dollar figure from them per month. Take 7% of that. That is the figure they are willing to pay you per month. Let's say that's $4,000 a month. They must give you all these figures. Do not try to increase these figures at all. That would kill this whole approach.

Ask them if they would like to pay less than that if it saves you both bookkeeping and tracking. They will say "Yes"

Then you say "If you promise to refer other cosmetic dentists to me, after I prove myself, and save us both all the tracking efforts... I'll do everything for only half of the low ball estimate you gave me. Only $2,000 a month (or whatever half of their figure is). I just want to get started getting you new clients."


If they are serious at all, they will take that deal. It is blazingly obvious that this is in their best interest.


If they insist (which they won't) on "pay for performance", take a large deposit that you will deduct from as the new clients come in.

Do not...NOT NOT! just bill them at the end of the month....

That path leads to ruin....and the dark side.

I have not had this situation but from the other side the issue we had when a service provider pitched us this was if they did a good job they got paid more than it was worth. And if they did bad we would have to fire them. So in the worst case they got fired. And in the best case they performed really well (what we want) but they make loads of money off of it.

So if they or you in this situation didn't perform they would fire you no matter how they paid you.

So if you can show as Claude pointed out that they would pay less by paying your monthly fee they will see in the long run it is smarter. So if you do good (what you, they and any smart person would want) you are paid your fee which would be less then the percentage.

So the question you need to ask them is this.

"Do you think I can bring you paying customers?"

If they say yes...

"Then pay me my fee. It is fair to me and fair to you. I should get paid for the work I do not the people you close. In the long run it is cheaper and thus fairer to you."

If they say no...

"In that case there would be no point to hire me. Thank you for your time and I wish you the best." And start walking away. Remember they need you and not the other way around.

Like others have said they are sold. They wouldn't be asking these questions otherwise. So show them how it is in their interest to pay you based on what you do. Let them make money off of selling people.

The thing is he isn't being a lead provider he is providing services that will bring in leads. If he was providing leads he should be paid on a per lead basis.

If you are providing a service you should be paid on the service.

But no matter what you shouldn't be paid on what someone else is selling. You can't control the sales person and should not be paid based on what the sales person does.

Personally I would never want to be a lead provider. Sure services I may offer will bring leads but I don't want to be paid per lead. I want to be paid for what I do. Want more pay me more. Not do more work and bring more lead and then you will pay me more.

If you are paid by leads they will complain if too many are bad. Sure lead 5, 7, and 14 were worth $50 but the rest of the 20 were not and crap like that. Also if they pay per lead they start to resent it. Just not a model I would ever want to be in. If I am providing leads I want to be the one closing them and I want to be paid a damn good commission.

Otherwise here is the service I provide. It will bring you leads and will bring you sales if your sales team can close. You pay me for what I do rather that brings you 1 sale or 100 sales. Of course if I bring them loads of sales I will kick myself if I charged too little but next time I will know better.

And I can always raise prices. Sooner or later you should price yourself out of all your current clients.

EDIT: Also the vast majority of businesses are used to paying for services not leads. You don't pay the paper for leads you pay to run your ad. You don't pay per lead for the billboard. You don't pay per lead for the TV ad.

A few businesses are used to paying for leads. Businesses like contractors (of various kinds) and insurance agents. But do you know any of them personally? I do and they all complain about the lead services. Hell they may pay the local cable company more per lead (they don't track and don't know) but they resent that $50 per lead way more than the few thousand they spend on TV. So do you want to be grouped in with the media they don't track and just pay for? Or with the lead providers that they all bitch about? I'd rather be associated with TV, Newspapers, and Radio since those are respected by business owners.

Go straight leads - if she's paying $3750 for 550 clicks = almost $7/visitor. If you know you stuff then it should be easy to get this down to $1-3/visitor. Ask if she'll pay you $5/visitor tracked through analytics codes. Then upsell her on redesigning website to increase conversions. Sales pitch - right now you're paying $4000/month for 550 visitors and converting 2%. If you pay me $4000/month I'll increase this to 1000 visitors/month. For an additional $x,xxx one time fee i'll redesign your website and get conversions to 5% and build a newsletter list to up sell, this will increase your revenue by $x,xxx/month...something along those lines would be easy for a business person to say yes to.

I personally am not in that kind of biz, but this might give you a hint although I cannot vauch for the results be cause I've heard it from an acquittance of mine.

He asked and got access to the CRM of his clients where they keep and score all data appointments, sales, etc. Also the prospects that get appointments through him get some kind of coupons, so he manages to track this way all data he finds important.

I don't know if this might work for you, but maybe worth thinking about it.

Veo

Adukes,

Personally, I think you should go the pay per LEAD route. If they are willing to give you a "%" of the price of a cosmetic dentistry patient (SALE), then that clearly tells you they have a $ amount in mind as to what they think a patient like that is worth.....that also means that somehow/someway you can do the math, figure in closing ratios, and come up with a fair $ amount to attach to a LEAD.

One example is 1800dentist. I know what they charge dentists in a few markets I work in.

• Medicare/Medicaid Leads: I've seen them advertising them for $25/each.
• General/Family Dentist: This would be more of a realistic type of lead (not a specialty like implants) they were charging $80-$135 a lead. These prices were in mid-market cities.
• Specialty Dentistry: I don't know, but I'm betting it's easily like $150-$250/lead......and I'm sure it's much higher in your city .

Here's a handy little tool I found when I was nosing around on the site of a "dental marketing expert"..lol...(somehow, I'm not impressed).

Pay Per Lead ROI - for some reason it wouldn't work in IE...but worked in Firefox.

Dental Practice Management: New Patient Value? Dentists Don't Know It


"There are several groups of patients...

• "New dental emergencies are $200 for one visit or approximately $3500 for those that follow up, plus 1 referral on average.
• "The average value of a patient is $3000-$3500 initially, but about 10% have long term (2-year) worth of $15,000-45,0000.
• "Typical patients are good for 1-2 referrals.
• "New patients who come in for a complete exam have first year value of $2,500 plus 2 referrals.
• "Cosmetic patients typically are shoppers, with about one in three proceeding with value in excess of $12k.
• "Mini dental implant patients have an average value of $3500 plus an average of two referrals.
• "Denture patients average $3500-6000 plus at least one and often several referrals.
• "The best referring patients are referrals and mini dental implant patients."