I would like to engage the services of one or two persons to get me more clients, on a commission basis depending on the price of the project, for example 10% of the price of the project. What is regarded as a fair percentage? I was thinking something in the range of 10 to 15%.
How much work vs how much pay.
10% of a $50000 project might be fair, but it might be completely unfair in terms of a $1000 project
how would you tackle that problem or relativity then? My projects could vary substantially in cost dependign on the needs of the client
Set up a sliding scale. The higher the amount the lower the percentage. Go as high as 30% on a low amount and as low as 7% on a high amount.
I have worked it like this in another field, it works out just fine. Make a graph of this to make it visual and easy to grasp.
Makes alot of sense, thanks alot for the tip
10% to a salesperson would probably get you a weak salesperson. As courtesy referral commission that might be reasonable but for a GOOD sales person who can consistently generate sales, you will have to pay more than that!
Sales are delectably the hardest and most important part of a services business. If you want to grow I would offer a very strong package and see if you can find a true rain maker.
I have rarely seen situations where the sales people make anywhere near as low as 50% of the final selling price.
For example if you were to write a book then the people selling it for you would typically collect around 80-95% of the selling price and you’d get around 5-20%.
If you want to grow I would offer a very strong package and see if you can find a true rain maker.
I have undergone sales training. I have done everything from knock-ins door-to-door to direct response marketing, to the tune of monthly client mailings numbering in the hundreds of thousands of pieces. That’s real letters. With expensive postage. And rather large budgets to go with 'em.
First, develop a salesperson friendly business. Concentrate on web services, not basic minimum competence (like web standards).
Develop a range of upsells and cross-sells. Develop a USP. And if you don’t know what that is, you have no business engaging a professional sales person.
Rule of Thumb: If you’ve never hired a copywriter to develop a site, don’t hire a sales person. And by copy, I don’t mean the filler keeping the key words from running together at five bucks per ton.
Most web designers just aren’t ready, nor are they willing to bring themselves up to the level of engaging a sales pro. That goes for design shops with a dozen or more people who would vehemently disagree.
A commission is simply the tax they’re willing to pay to remain utterly unremarkable. And they’re looking to sell ice cubes to the Eskimo.
Which leads me to what my nose tells me you really want: Affiliate sales. Do a search, my guess is that’s what you want. Saves the time of a sale pro you’d otherwise be wasting.
Run the numbers from other direction as well. A good salesperson wants to make $100K per year or more. How much business do you have to do in order to pay them that? Can you actually do that much work? Would you have to hire and manage people? If so, are you ready for that?
thanks for your views, I am still small as a business, and my idea was to offer a commission to some very well connected acquaintances of mine, in return for getting me sales leads. They wouldn’t be actively promoting my services, but being in a particular industry they would frequently meet people needing a website amongst other things, and would be able to suggest my services in that case.
For web projects I give 10%. I gave sales people stuff to work with and they’ve done good. They just bring in leads, if we convert it to a sale boom they get paid when the client pays. If you’re desperate you could offer 50% of the profit (not revenue). It’s a lesser amount than you would think.
Unless your projects are worth 100k+, I doubt that kind of commission would bring in a real salesperson.
It works out quite well. A real salesperson? They’re making sales and making decent money, maybe 15-25 hours a week and they get around $625/week. If this ever changes, perhaps I might increase commission but right now and for awhile it’s been working out great.
Once they know their stuff and how to pitch a service it’s a win/win situation. Their time investment is not that much, and the conversion rates of potential clients are pretty high. Perhaps you ought to seek out more quality people and train them better.
The method used by pinitup is what i was looking for. I agree that this works out well as I have seen it working myself, people who have a lot of contacts can actually make quite a tidy sum by just referring people to us for a website/service, and they wouldn’t necessarily be putting in a lot of effort to do it, so they would be happy with such an agreement.
So, if each sales person brings in $625/week that would be 10% of the total sales their leads brought in which would be $6250/week. Multiplied by 50 weeks/year is 312k of business annually.
How many of these salespeople do you have going?
We’ve got 3 sales people. Your math is right on for 1 person, although realistically a bit high because they’ll go do training for some weeks out of the year and vacation time. But relatively close number-wise. I wish I had more but I don’t think we could handle the workload, at least currently, and we’ve started developing in-house projects this past year.
How many developers/employees to you have to service this 900k of business? Do you have a company site we can see? I’m curious to see how you are able to generate so much business with such a low (by industry standards) commission rate.
I figured that would be your next question and I should of saved myself the grief. We work with high end clients with very large budgets and on the complete other end of the spectrum we work with small businesses. The repeat clients our sales people work with each time, so their income is pretty steady. 10% commission is good and it’s consistent, I still don’t think it’s low, maybe I got lucky or we did good on training from the start? Also 900k is really not that much money in the scheme of things, especially after 4 years. I am hoping to double that in two years.
I contract people locally and sometimes outsource when necessary. We use the same people each time for the most part.
You mean, can “You” see? Because apparently you’ve been trolling me and no one else has asked. However as you may have expected, I really rather not give you my information at this point, a part of me wants to in order to prove a point so you can see the alexa ranking, client sites (from big corporate sites, to local small businesses), and so forth, but it’s not worth the risk.
Who knows I might get a fake request for service from you or something of that nature. Not only that if you didn’t notice I left out how many people we have per project, per year, to service roughly 900k of work with that in conjunction with my revenue stream and so forth, I just rather you not have all that information. Maybe if you weren’t trolling me from the start I would of mentioned it right off the batt in order to try and help someone is a random post.
Heck if I didn’t feel threatened I’d take a screen shot of a couple of my accounts for proof of profits and proof of active contractors. All in all, if you get good people to do sales, 10% I think is normal, you may disagree and have had other experiences. Maybe your type of work slightly differs from mine.
There’s a big difference between trolling a forum and trying to call someone out on their claims. Sorry you feel so threatened! I have to admit it’s been fun antagonizing you a bit, though.
Your sitepoint account was created yesterday and has an average post-per-day of 57. Who’s trolling who?
You just admitted to be a troll. You’re simply trying to provoke me, and nothing else but waste time. Threatened on your intentions, which I just proved was correct. I don’t know if it’s because you feel challenged by me or if it’s a money thing or what. I don’t know how successful your company is but I’m sorry if you’re jealous. I think this thread is getting pretty far dislodged and I am going to end it here.