business-structureI have a moving company website in Vancouver, Canada.
It generates money, for example, last month it made my carrier $4000 gross.
He pays $750 a month for this and says it’s too much…and this is the winter, in the summer he’ll gross double that.
Is my pricing structure fine?
Additionally, he’s very expensive to hire and that further reduces his conversion ratio, so going on percentage is NOT an option.
Any thoughts on this?
There’s no magic number, in that it depends on your client’s profit margins, the quality of the leads you’re generating, whether the leads tend to be redundant (i.e. they contacted them separately), whether they convert well, how fast they convert, etc. You basically see both extremes in the wild and everything in between, ranging from a pittance to pretty much all of the proceeds.
Reply to your client the same way you’d reply to a “price is too high” sales objection: get into your client’s head by basically asking “interesting… expensive compared to what if I may ask?” For all you know your client might have cheaper options or pricier options that yield much better leads and thus a better ROI.
If your client doesn’t have credible alternatives then they’re not in much of a position to negotiate, but keep in mind that clients keep grudges when they’re under the impression they’re getting gouged. Articulate the value proposition you’re bringing to the table so as to not put your long-term relationship in jeopardy, and don’t forget that some clients will want their pound of flesh as a matter of principle (for their self-esteem).
If you’re able to code and have enough volume (of leads and of movers), you could potentially work around the discussions altogether by setting yourself up as a bidding system. Basically make movers compete against each other for exclusive access to the leads each month. Break it down by area if relevant. Maybe implement it AdWords style (i.e. highest bidder pays the second highest bid). Set reserve prices that you’re comfortable with. And let the bidding commence.
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