How Should I Bill Client For Lead Gen?

[Fiver]

I have a company I'm working with that agreed to buy my leads. I suggested we do packages of 25 at a time.

What is the best way to bill them to begin this? 1/2 up front and 1/2 upon completion? But then what about the next 25 leads? Is the next invoice for the last half of package #1 and the first half of package #2?

Also, do most of you work with a contract or is money up front usually good enough?

 

[amateursurgeon]

I have a company I'm working with that agreed to buy my leads. I suggested we do packages of 25 at a time.

What is the best way to bill them to begin this? 1/2 up front and 1/2 upon completion? But then what about the next 25 leads? Is the next invoice for the last half of package #1 and the first half of package #2?

Also, do most of you work with a contract or is money up front usually good enough?

Tell them you bill up front. If they balk, you can negotiate down.

A simple contract is a good idea - you need to cover things like "what happens if the leads don't convert?". Depends on the amounts involved though. If you're only dealing with a few hundred bucks worth at at time, not worth it - if they're that unhappy you can afford to refund them. If it's more, contract worth it.

In either case, I suggest setting out the terms in an email to avoid arguments later.

 

[onlinemoniez]

Also quite interested in this. What about building relationships with professionals like attorneys and selling them leads?

How do you guys go about valuing leads other than the cost of the service being offered?

I guess ill answer my own question, call some attorneys, and see what they'll pay.

Sent from my SCH-I535 using Tapatalk 2

 

[dmnEPC]

Make sure you get no less than a third upfront, preferably 50% or more. But as mentioned try to go for it all. If they balk and refuse, put on a little show and come down to say 50% and tell them how you never do this. Play it up. Believe in it yourself. If you dont believe it they will see right through you, and eat you alive.


Get a contract. Even if its simply the clients expectations put down on paper. It does not have to be a big ordeal. But cover your ass. Skip this and you will more than likely get fucked in the ass (raw no lube) if not this time, maybe next

 

[moratraffic]

Definitely need to get a contract before you start any work. If it is a smaller job, you can rely on email messages, but even then, I at least like to send them a proposal and tell me they accept the proposal was sent so there is no confusion on either end.

As far as billing, the 1st month can be a bit lax to build the relationship, but after that, most large companies will want you to invoice them. I have found it a bit harder to get payment for leads upfront, so for most companies, we just invoice them weekly or monthly, depending on the volume.

Make sure to always get a cap so you know you will get paid for what you send them. If not, you will get the old excuse that you sent them too many and they can't afford that many at once (it has happened). For most local businesses, if you are doing anything more then 25 a month, then you should bill weekly.

We also bill for 80% of the amount generated to compensate for bad leads. You can have the cleanest traffic in the world, but you will still get junk leads, so to keep a solid relationship, we always give them that upfront. I've only ever had one complaint about bad leads with this model and it was resolved quickly without losing the client.

To get an idea of what to charge, just do some market research in our industry as to what they are going for. Once you get an idea, you know the low end that you can sell the leads for. The best opening question I have found when contacting a lead gen customer is to ask them what their customer's lifetime value is. When they tell you it is $1K, it is pretty easy to sell them leads for $25 to $50, if you have a solid salesperson. Sell the idea that these are extra customers and unrealized profit and you should have plenty of new clients.

 

[Kiopa_Matt]

Prove yourself by providing the first batch, and billing afterwards. After all, you (probably) need them more than they need you. Once they're happy with the first batch, tell them they're required to maintain an account balance.

Setup a billing system so it dings their credit card $x whenever their balance reaches a certain level, until they change the amount. As the leads are distributed, deduct the appropriate amount from their balance. If the balance hits $0, they stop getting the leads, and they remain in your possession.

Copy what the big guys are doing, basically. They're big for a reason.

 

[MSTeacher]

Also quite interested in this. What about building relationships with professionals like attorneys and selling them leads?

How do you guys go about valuing leads other than the cost of the service being offered?

I guess ill answer my own question, call some attorneys, and see what they'll pay.

Sent from my SCH-I535 using Tapatalk 2

Law leads are weird. There are rules about lawyers buying leads/referrals, I think they vary state to state. I ended up calling my state bar association, state govt, talked to a lawyer who represents lawyers, etc. no one could give a definitive answer on what's kosher and not. It boiled down to finding lawyers who were willing to get creative with compensation. That was ~2011. I did not try selling the leads to a network or advertiser, not sure if that's an option.

 

[(O_o)]

You should give them leads for a % of the $$$$ of when they close.

You'll make a lot more (if your leads are quality)

 

[onlinemoniez]

Law leads are weird. There are rules about lawyers buying leads/referrals, I think they vary state to state. I ended up calling my state bar association, state govt, talked to a lawyer who represents lawyers, etc. no one could give a definitive answer on what's kosher and not. It boiled down to finding lawyers who were willing to get creative with compensation. That was ~2011. I did not try selling the leads to a network or advertiser, not sure if that's an option.

All I know is that attorneys CANNOT rev share.

Doing some research, an individual selling law leads said the following:

Bankruptcy: 20 - 60
Accident/Injury: 18 - 50
Divorce/Family Law: 18 - 40
Medical Malpractice: 20 - 60

 

[-joe-]

If the law's iffy about selling legal leads, there's always the option of 'renting' the site to them a month/week at a time. (ask to make sure that's legal, although I can't see why it wouldn't be)

 

[boatBurner]

The model we went with was to rent the web site out on contract for a monthly a fee. I feel like this gives you a lot more control of things in case the client doesn't pay. Instead, you'd be able to just flip the site to a competitor under the same terms. It might not be as lucrative up front as some of the other suggestions, although I think it's definitely still worthwhile (and even lucrative by itself), but I also think a predictable revenue flow enables you to put a little more leg work into the site's marketing to continue making it more effective.

As a side note, we haven't heard too many objections from companies when we throw them a few leads for free (because we didn't have a buyer up front) and then propose a site rental to continue seeing the same volume and quality of leads.

 

[MSTeacher]

Bankruptcy: 20 - 60
Accident/Injury: 18 - 50
Divorce/Family Law: 18 - 40
Medical Malpractice: 20 - 60

Seems a little low if you're going direct to the law firm?

 

[Fiver]

You should give them leads for a % of the $$$$ of when they close.

You'll make a lot more (if your leads are quality)

I agree I could possibly make more this way, but you don't have full transparancy of the sales cycle. So I have no idea if they closed the leads or not. I'd have to rely on the company being honest with me. And since this is a new relationship, I don't know if I can do that.

 

[(O_o)]

I agree I could possibly make more this way, but you don't have full transparancy of the sales cycle. So I have no idea if they closed the leads or not. I'd have to rely on the company being honest with me. And since this is a new relationship, I don't know if I can do that.

Its what I do with my lead gen clients. Luckily I went to college with the main people I give leads to so I can trust them.

Yes, def be wary. I gave 5 leads to this really friendly sounding guy in Houston that seemed trustworthy. He closed 2 of the leads and made like $2k. All he had to do was mail me a check for $300ish and I would have gave him more leads. He disappeared on me after that :\

 

[SLO Ur Roll]

Prove yourself by providing the first batch, and billing afterwards. After all, you (probably) need them more than they need you. Once they're happy with the first batch, tell them they're required to maintain an account balance.

Setup a billing system so it dings their credit card $x whenever their balance reaches a certain level, until they change the amount. As the leads are distributed, deduct the appropriate amount from their balance. If the balance hits $0, they stop getting the leads, and they remain in your possession.

Copy what the big guys are doing, basically. They're big for a reason.

^This. If your planning on dealing with multiple clients id suggest building out a custom pingtree and billing them via stripe or something similar.

 

[Fiver]

I'm much too small right now to build out a pingtree so I'm just going to invoice them.

But how do I do this?

I gave them 1st batch for free. I should've told them that if leads look good to them, I would invoice those upon delivery. May be too late now since I never mentioned billing for test leads up front.

And what about the 2nd batch? 50% up front for 2nd batch and then once I know they will pay that, just invoice for all future batches after I deliver? Or do I always invoice last 50% of previous batch + first 50% of next batch?

 

[tencentpiece]

You've given them one set of leads for free, get them to prepay for the next set upfront in full. That way even if you run off they break even, if they run off you break even etc.

 

[Fiver]

Prove yourself by providing the first batch, and billing afterwards. After all, you (probably) need them more than they need you. Once they're happy with the first batch, tell them they're required to maintain an account balance.

Setup a billing system so it dings their credit card $x whenever their balance reaches a certain level, until they change the amount. As the leads are distributed, deduct the appropriate amount from their balance. If the balance hits $0, they stop getting the leads, and they remain in your possession.

Copy what the big guys are doing, basically. They're big for a reason.

How do you set up a billing system like the one you described where I can have the credit card on file and bill before sending leads? And what does keeping a balance mean exactly?

Right now I'm using Freshbooks for my billing and I don't think you can do that with them as they only allow auto-billing per date along with standard invoicing.

 

[Kiopa_Matt]

How do you set up a billing system like the one you described where I can have the credit card on file and bill before sending leads?

I don't know. I'm a developer, so I just make what I need. Search around, and there's probably something out there available, or at least something that can be modified. Either that, or contract out to a developer. Not a small project, but not big either.

And what does keeping a balance mean exactly?

Same as your bank account, or PayPal. If your balance hits $0, you're not allowed any more money. Same concept, except with leads. For example, say the client's balance is $200, and you're selling leads for $20/lead. If the system sends them four leads, it'll deduct $80 from their balance, so they're left with $120. Once the balance hits $0, it'll automatically bang their card for another $200 (or whatever amount), raising their balance by that much.

Keeps the outstanding amount minimal for both sides, automates the entire process, plus makes it easier for you to collect since you're authorized to charge their card until they cancel, versus counting on them to pay each time you send an invoice.

 

[microphone head]

Can you not just set it up to bill it as a 'subscription service' of kinds in order to rebill them monthly? (x leads/month etc.)

Or is that just a nonsense?