James Dooley: Hi, so today I'm joined with Dan Grant who's the director at Fat Rank and Promo SEO. And today is quite an interesting kind of discussion that we're going to have, which is how much commission do the business owners need to pay yourself or the company for any of the converted leads that they do on our pay-on-conversion lead generation model?
Dan Grant: Yes, so it's obviously a question we, as you know, kind of get quite a lot from our clients. Generally, we do pay-on-conversion model, so you know we know that that's obviously setting the leads free of charge, then it's not until they convert that we work, that they have to pay. A lot of the time that can happen within kind of a month or two of us building a website for a client, and then they'll say, okay, we've got these few jobs in, you know, how much do we pay for this? Obviously, it's at that point we then discuss what that model is. Now, generally, what we say and it sounds quite cliche, but the more that they're able to pay us, the more we're obviously able to invest in the site and reinvest into backlinks, into content, into ranking better organically, into you know, getting leads from different sources like Facebook ads and Twitter ads, things like that, different organic searches. So there's a lot of ways that we can obviously improve the quantity of leads. And I think you'll admit as well, our best clients, the ones that have said, okay, we believe in this model, we trust in this model, you've proved to us that you know, we're being sent those leads free of charge and we're converting them, it's now time that we double down and obviously invest in this so that we can improve it. And the reason they're our best clients, our best clients, is obviously over the years, they're the ones that we've reinvested into the websites and obviously they've seen a bigger and bigger and bigger return on investment each month as a result of that. So generally speaking, that is, you know, usually our answer. Now that's not to say that some clients will, you know, be different to that. Some clients will prefer to be quite conservative at the start and then build that up, or they might say, yes, we can afford to pay this, but you know, our profit margins are quite tight. So it is different from industry to industry, which is why there's no set answer for it. But I think typically the answer we'd probably give to most clients is, look, the more that you can give out of these jobs, considering the inquiries are obviously coming in for free, the more we'll generate more of those good quality, you know, inquiries for you, and obviously be able to build this up and kind of get it to a point where obviously it's really beneficial for both parties, as opposed to something that kind of ticks over over, you know, each month.
James Dooley: Yeah, yeah, for sure. I mean, from my point of view, this becomes a very frustrating kind of topic of conversation with certain business owners, because some business owners are very frugal. And I'm fine with a business owner being frugal and making certain that they're trying to get everything for the best price possible. But if they see us as being an investment and not as being an expense, and they double down with what the model is of what we can do, we can start improving the quality of the leads. And what I mean by that is, to generate leads via let's say Twitter ads or Facebook ads or Instagram ads is quite cheap to generate, right? You can generate a quantity of leads, but the quality normally is not that good, right? But further down the line, the more that they are able to start to pay, we can start to scale it out and try and start doubling down to create longer-form contact forms, to make certain that we're creating VSLs and sales funnels prior to even going to them, so that the conversions are a lot higher. We're asking the person who sees us via organic SEO or via PPC or via our YouTube ads, we're asking them a lot more questions, which then allows us to segment and dissect whether this is a good or not a good kind of inquiry for our customer. And the more that they're able to then pay into us, the more, like you said, we can double down. We can create multiple different websites. The first website we build, we might do a plumbing website, and it might be quite generic, that does everything related to plumbing. They might come back to us and start saying, these leads are not good enough, because they're all just like fixing a tap up in Aberdeen, and it's a Ā£50 job, and we can't pay him much commission. And then further down the line, the more we start working with him, the more we start to realise that wet rooms might make a lot more money for him, and they make a lot of profit on that. We can double down and build out a second website or even a third website or a fourth website, and specifically target the services and the products that make them the most money. Where if you are frugal at the very start and you're wanting to pay only two, three, four, five percent commissions, I'm not going to allow us to spend a load more money in building a second, a third, a fourth, and a fifth website. Where, if if some of these companies, if it was me and I could roll back twelve, thirteen years, and I had a construction company and I was in need of leads, which is where all it started, and someone came to me with this model, I'd nearly be giving him all my profits to start with. And I know it sounds very, very, you're going to say that because you're getting paid, but I would be, because I'd be doubling down on going, I want a consistent flow of quality inquiries that's coming into my inbox on a day-by-day basis. So if I can use this as a long-term partnership with you, in being able to achieve that goal, and I can get that, I can be making obviously more profits further down the line, obviously I'm going to want you to be making good profit, and maybe only then paying 20 percent commission. But if someone came to me saying, if you make Ā£10,000 on this job, pay me Ā£2,000, well, I'm not being funny, I'd be paying Ā£2,000 a hell of a lot to get Ā£10,000 back. It's the best business model I've ever heard of. And that's kind of how we've set it up, to make it so that we're wanting to deal with business owners that want to thrive, that want to innovate, that want to grow. And not only that, I'm not wanting, I'm not wanting business owners to go from two vans on the road to twenty vans on the road and having a logistical operational nightmare, going, this is going to, I don't want to grow that big. I don't want to grow from Ā£1 million to Ā£10 million in revenue. If they're generating a lot of leads, they can start upping the prices. They don't have to win every single job. They can up the prices, which then can limit how much jobs that they're winning, but then they're winning jobs at the right price. But we need to have these business owners investing in us as being a partnership, not biting the hand that feeds them. And when we can grow this out together, it can work very well. Because if very quickly, if they're not willing to put the money in and see us as being a partner for their marketing and sales growth, we'll just have to switch them off, because it's not going to work for us. The amount of money that we're putting in, in building the websites, in the content, in the backlinks, in whatever other platforms, whatever it is, Twitter ads, Instagram ads, PPC, ranking in Google, creating high-quality videos of jobs, previous jobs that they've done, we need to see a return on investment. But we're trying to de-risk it for them, obviously, because we want them to make a return on investment that we complete. It's a no-win-no-fee for them until they get paid. Then they don't pay anything to us. But I think it's very important for when people are going, well, what's the lowest commission I can give you? The minute you came out with that, saying, I'd just be like, sorry, you're not the right customer for us, because we, it's us that are being selective in this relationship. Because it's not, you're a business owner and you can choose what lead generation company you're going to go with, because ninety-nine percent of lead generation companies out there, they charge you for the ad campaign, or they charge you per lead, right? Those leads are not exclusive. They're being sold to five, six, seven, eight different companies. So you might be paying Ā£50 a lead or Ā£20 a lead, but it's been sold to five or more of your competition, right? So your conversions are nowhere near as good. You might end up buying fifty leads that month, which might cost you a thousand pound, and not convert a job. The month after you start to pay for every single lead, for us, you only pay on the conversion. So it completely de-risks it. But we are at risk. So we've got to make certain that you're good enough to deal with our leads and that you're willing to pay us a high enough commission out of profits, and only out of profits. Never are you out of pocket yourself. For us to start saying, okay, we now want you to start paying Ā£100 a lead or Ā£50 a lead and stuff like that, our leads are completely exclusive, real-time leads that land into your inbox. And if you are good at converting the kind of inquiry that we're generating, you then should be making good profit. And then out of that, you pay as a commission out of the profits that you've made. So it's a very interesting debate that we actually have with some business owners. This actually is where certain customers, like you've said, Dan, certain customers blossom and grow and see us as being an investment and want to work with us in a partnership. The ones that just try to get everything on the cheap, long-term, it just doesn't work for us. Like, it's, we've got to be more selective than what they've got to be, because all the risk lies with us. Is there anything else on there on the commission front that you can add on to that, add to what you were saying?
Dan Grant: Yeah, there and just mentioned, obviously, we work in a lot of different niches, as you know, so we have a lot of different industries that you know are ticking over, where some clients are kind of just paying a certain amount a month, and some kind of up their prices, and some you're even lowering their prices in certain industries, depending on you know what the business position is and things like that. But a lot of the time, if those clients are paying more per month, we obviously prioritise them and put more money into them. So like I said earlier about reinvesting, if you're doing that, and you're a company that works with us, and you see that kind of, you know, the value in what we're doing, you see the value in the inquiries, and you see those jobs converting, if they're able to pay a little bit more, they only just kind of get bumped up on the ladder with us. When in terms of our niches, we'll say, okay, this niche is paying more now, we'll prioritise it. And that priority means quite a lot. Our marketing agency, where we're spending 100 percent of our time building out these websites, optimising these websites, and ranking these websites, so more money and time and effort goes into their niches by doing that. And in turn, it just snowballs, as you know. I mean, a lot of companies will kind of be a bit more hesitant to that, but then they don't see the growth that other companies will do by just being a bit kind of more, you know, trusting and putting that kind of effort and income in, you know, earlier on with that relationship. So that's kind of what generally tends to lead to a longer relationship that's better for us and obviously for the clients as well.
James Dooley: Yeah, for sure. I mean, not only that as well, something else that I've not really touched on is that we need to make certain that our, the clients that we send the leads to are converting, otherwise we don't get paid a penny, right? So all the risk lies with us. But what we also start doing, which is huge for these customers, is that we start to look at their online presence and look at their reputation online, and we're trying to also improve their branding online, because the better their branding is online, the better the conversion of the leads that we're generating. So we're also giving them free advice for digital marketing, free SEO advice with regards to, you need to shout and scream about these awards that you've won. If you've got some awards, if you've got certain accreditation, you need to be shouting from the rooftops about these accreditations that you have. And there's lots of other things like, you don't have enough reviews? Here's a way of how you can start generating more reviews online that make you look better as a company, which also then means that their own leads that they're generating, which they might be doing their own SEO, they might be doing their own PPC, they might be already using a different lead generation agency, we're not asking them to solely put all of the money in just to us. If I, I'd recommend them to do some SEO for their own website to generate their own leads. I'd recommend them to do some of their own PPC and using a PPC agency that can generate them some leads, because actually, when they start to do that, they definitely start seeing the value in what we're doing, because we're doing all of that on our on the sites that we're generating for them to generate them the leads, and then obviously we can run Twitter ads, YouTube ads, Pinterest ads, everything we can think that might work for them, we can run. But we're also really interested in trying to get their branding to look better online from a reputation point of view, so that they can convert more jobs, which then means that we can earn that little bit more money, and together we can grow.
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