Selling Web Design Services - What Are Fair Finder's Fees / Commissions?

Business
1

I run a one person web design company. Although I’m more comfortable than most techies talking to potential clients, I prefer to stay behind the scenes doing the actual web design and building. I got a call today from a friend’s wife who comes from a sales and marketing background. She “gets” the benefit of having a web site and seems full of energy. She loves sales and has a lot of contacts. So it sounds like there’s a good synergy between us - she can find clients for me and do the initial assessment and pitch, then I can take over the project planning, design, and building work.

She understands that I can’t hire actual employees (yet) and is willing to work for some kind of finder’s fee and/or commission. So I need to find out what’s a fair arrangement. I should mention that I don’t bill my web clients by the hour. Instead, I do some calculations of the time required, multiply by my non-disclosed hourly rate, then provide a project fee to the client. I’m thinking that paying her some percentage of the project fee would be reasonable since the bigger the job she brings in, the more she’s compensated.

Does anyone have experience with this kind of arrangement, either on the “paying someone to bring in clients” side or the “getting paid to bring in clients” side? What’s a good way to do this that makes everyone happy?

Thanks!

2

I 've been in the exact same boat myself. I have an “associate” who’s quite good at sales, so he gets a percentage of whatever project fee I wind up charging. I charge per project as well, so it seems to work out. I also have a standing “referral fee” to my existing clients, and that’s been very successful.

3

You could suggest that she does this for say three months. If it’s not working out at the end of 3 months you can go your separate ways and hopefully avoid falling out with your friend’s wife. This would be much easier than being forced into a situation where you have to end an arrangement, which she thinks is permanent, against her wishes.

If it’s going well you can ask her if she wishes to continue with the arrangement.

Put whatever you agree with her in writing, in an effort to avoid disputes later on.

Personal friendships have a nasty habit of turning sour, when they become business relationships. You might want to think of anything else you can do now to avoid this situation in the future.

4

What percentage does your associate get? And what’s your referral fee to existing clients?

5

Yeah, a short but formal written agreement is a good idea. I realized, too, that I probably should have her sign an “independent contractor” agreement and send her a 1099 form (for US taxpayers) at the end of the year.

6

In addition to referring clients I read that she will “be taking over the assessment and doing the ‘pitch’.” I imagine that she will also expect something for her time in, at least, the assessment part of her job, depending upon the criteria you give her.

You will need to spend significant time in training her as to what services you provide and how you prefer she present them to potential clients.

You will need to assess how her training will impact your revenue in the first few months, still considering how much extra revenue her efforts will bring to your business as well.

To determine what percentage to pay her, take a look at what you need to keep your business moving forward. You will either need to adjust prices or be satisfied with less per project. In adjusting prices, you need to be sure that your business remains competitive. In the latter respect, you need to know that your business will stay healthy with less “kept” revenue.

Unless someone here knows your business as well as you do, I don’t think it’s wise to just accept an off-the-wall percentage. Whatever you decide, I suggest that you pay her a lower percentage until you are satisfied that she is helping your business grow rather than inhibiting its growth.

7

What’s a good way to do this that makes everyone happy?

If she’s bringing in business, it’s her client. She gets paid a percentage.

Chances are, anyone who “gets” the benefit of having a website is going to cause some friction with the average web developer – who knows the features required to have a web site. Completely different things.

It’s hard to tell, everyone has varying levels of understanding. But technology and marketing bring entirely different sets of requirements to web development. Sooner or later you’re going to find out, from the marketing standpoint, having a site is pointless.

In other words, the standard development of a site without a purpose “just to have a site” will not in any way, shape or form, deliver the benefits. A marketing driven approach is very different from a technology driven approach.

Web development, and I’m simply playing the percentages here, is a marketing horror show. And that is going to cause frictions when the marketer doesn’t see what he or she is looking for in the implementation.

Now you might get one of those “build me a splash page and make it Über cool” marketers. They’ve got no clue about producing a response and can peacefully interact with the vast majority of web developers. (as they share common interests of never connecting any specific thing in site development to a result).

Not so direct response marketers. They need a very specific kind of web developer. Otherwise, you’re going to be in constant conflict. And you simply won’t even know how to build a response driven site. (Parley-vous A/B Split Run Multivariate Coding? …CRM? …Sprecenzie Planogram?)

Most ecommerce expert developers are experts in OScommerce or Zen cart installation – not how to design them to maximize sales through visual merchandising design. And no, calling what you’re doing visual merchandising doesn’t turn the current vending machine model these carts are based on into a store supporting user shopping psychology.

If you’re willing to develop marketing driven sites, well and good. However the odds argue against whatever you’re doing now being marketing driven design.

These will be a different kind of client, wanting a different kind of site. (probably)

It very much depends on the type of developer and the type of marketer involved. The wrong matchup will have the marketer promising things to clients the coder hasn’t the faintest idea how to deliver.

Related:

Never Get Involved in a Land War in Asia (or Build a Website for No Reason) Most sites are excuse driven – not purpose driven.

Calling All Designers: Learn to Write! Keyword stuffing generic text is not writing copy. If the marketer is worth her salt, they’ll be able to write results-producing copy, no problem.

[URL=“http://www.apogeehk.com/articles/HowDirectMarketingAndUserExperienceAreTheSame.html”]
How Direct Marketing and User Experience Are the Same here, both share an understanding of user testing and human factors. Most developers don’t know what Fitts’ Law is, and couldn’t apply it to CSS design to save their very lives. They don’t develop UIs, they decorate them.

It could also work out where both share an aversion to ever testing, and prefer vapid copy and pointless flash animation.

8

My business, is a direct partner with a marketing company and we help each other out successfully. I would say yes, we benefit more off of them then they benefit off of us, but that is because they are a bigger business. They enjoy it anyways, because we give them some business too, and any business is good business these days.

For example, say a client wants a logo and banner design. We say that we would be happy to do that for them and then we ask them if they would like to promote their business even more with our online marketing partner, who can perform search engine marketing and email marketing.

9

If shes going to bring in more business for you then great! Maybe just have her do it for a trial period and see how you go?

10

Thats one of the most common way of getting business, where someone (here, its your friend’s wife) brings in business and you compensate some percentage of that to her.

We also have a team of marketeers who brings in projects for us and they get compensate based on the project value and sometimes on other factors as well. We also have a fixed salary (small) for them + they get commission based on the project value.

Initially, you can pay her as she brings in project, just sign in some contract writing terms like what if the client is not satisfied etc.

11

Instead, I do some calculations of the time required, multiply by my non-disclosed hourly rate, then provide a project fee to the client. I’m thinking that paying her some percentage of the project fee would be reasonable since the bigger the job she brings in, the more she’s compensated.

Why would you pay a percentage for a simple referral ?

You shouldn’t be talking to the client about money at all. Work with the client and get details about the project, sure. But once you get your numbers together you should pass them along to her and see what she can do with them.

If she’s any good she should be able to get you what you want, sometimes more, and get what she wants out of it too.

12

My suggestion is to let her speak to the potential customers, and if they’re interested you’ill quote your price only to her. She can then create a proposal for the potential customer which is marked up as high as she thinks she can sell it for (they never see your price).

This gives her more incentive because she’s not capped out by commission in the 10-20% range.

I’ve done this in the past and it has worked out well for everyone involved.

13

I commonly pay a couple of associates 15% of a sale for bringing in business. It suits both parties really. They find me business I’d otherwise never even hear about, and they get a nice little commision.

I don’t mind one bit about losing the 15% given I’d never see ANY business whatsoever without them.

14

First go with her on trial of 3 months, after this period you can judge what she can do for you and how much you should pay.

15

Came across a site called FindABizUSA dot com that’ll pay $100 for any referral that signs up with them. They only charge $495 for the site design (sounds like a 20% commission), but they also get a $39.95 monthly fee for hosting/EMail marketing - seems to bring it down to 10%.
Still, $100 ain’t bad!!:scratch:

16

I pay a 10% finder’s fee to certain professionals I associate with, and will pay 15% to someone who also manages all the communication with the client (and basically subcontracts to me.) Although noletrain made a great point in his post and this is something we commonly do also. It really depends what the finder prefers. As hitmanuk2k said, I’m just delighted to have work I probably wouldn’t have found otherwise.

Referrals from customers are always the best, though. They’re free. :smiley:

17

I’d agree with the above posts that 10-15% is a common percentage. I’d pay higher up in the range depending on how strong of a relationship you have with the other person, and what sort of quality work it brings in.

18

My only advice is that if you really have someone who is bringing you business (which you admitted you don’t enjoy) then pay them well and treat them fairly. A lot of techies think that they the tech/production is the ‘hard part’ and sales should just take their commission and be happy. But it’s quite the opposite - finding a rain-maker who will bring you business is good as gold. Strike a great deal for that person, and do everything you can to keep them on!

19

Thank You Dcrux!

You “get it”

Many many people have no idea what they want a website for, nor do they understand online promotion. I see over and over again a web designer produce what they think the client wants… and the client thinks they know what they want.

Clients that I run into are notorious for wanting to repeat what caused the dot com bust of 9 years ago. They think advertising on the web is just like advertising on print or television.

What the goal of having a company website is is advertising. You do not create the page for human consumption until AFTER you’ve got the site to rank in Google where it will do the client some good.

Most clients I have think they know what people type into Google to find them.
it’s utterly useless to optimize a site for the company name.

Your target audience doesn’t know your name (nor do they give a damn)
all they care about is what Googlebot cares about and that is two things and two things only:
What you do and where you do it.

If you’re not coca cola or pepsi branding the name on the web is useless.

I write code for Googlebot and write sales copy for Googlebot… only AFTER the site is in the part of the pond where the fish are …and we ensure we’re the only ones fishing there does the site get passed off to a designer to make it pretty.

I do my magic first, if it’s not in the top ten of Google no one is ever going to see it anyway

20

Business development is (IMHO) the most important part of the “web design business”. It really doesn’t matter how good you are as a techie if you don’t have clients coming in.

Typically a “business development” professional will get anywhere from 3-15% of the initial contract, with some residual percentage based on any additional contracts that come from that client.

Its up to you to negotiate with the bizdev person as to how much work they will be doing for that percentage…