What's a reasonable payment to a freelancer for finding prospects and closing them?

[Eholic]

Hello,

I am thinking of paying a freelancer $200 for every closed client for my B2B Digital Marketing Agency.

The $200 is only a starting payment, but will be doubled after the 50th closed client.

However, it turns out there are 2 seperate parts which I thought was just 1 part. The first, to find potential leads (prospects) and secondly to close them. In which case $200 are turning out to be way less than what I first thought. Someone even had a go at me about that. They said that $200 for just closing a client is fine but the payment won't cut it for doing both tasks.

A different person told me that what I am wanting is a business development, where the following is involved: finding prospects and leads, warming them and then closing them.

What will be a reasonable payment to a freelancer for doing both - finding prospects and closing them? (a permanent position)

I am looking forward to your inputs.

Thank you in advance!

 

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[SEBASTlAN]

Did you mean to write $200 or $2000?

 

[AgainstAllOdds]

A good salesperson in a market like the U.S. will run you $100k a year with bonuses. Calculate 255 business days, so $392 for a day's work.

Is it reasonable that a salesperson will close one person per day? No? What about one per week?

One per week seems more reasonable, so $392 * 5 = $1,960 seems like the right amount of money for an "efficient/skilled" salesperson. That's quick math on the market rate.

Now you're trying to adjust it to be commission only, so expect that number to be higher. You're having the salesperson take on all the risk in exchange for a payout.

Assuming that the market pay rate is lower (let's say $50k a year), then divide the numbers in half.



Now personally, the approach I'd take is automating as much of the pipeline as possible - list building, warming up the leads, etc. If you can warm them up, then you can get the most money's worth out of a salesperson worth anything. Their job won't be low value (list building), but high value (closing).

Considering that you're a "B2B Digital Marketing Agency" you should have the processes in place to generate leads cheap. If you don't, that means your service is worthless and you should find a different line of work.

 

[Eholic]

Did you mean to write $200 or $2000?

Hello,

Would you be paying those $2000 as residual commission every single month for every single closed client, including the initial commission for the closing?

 

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[Eholic]

Did you mean to write $200 or $2000?

Alright, lets say I have increased the commission to $2000 for each and every closed client?

 

[GetShitDone]

This is exactly what my service specialises in.

Monthly Retainer + commission is our fee.

$200 is way too low.

Closers get paid more than $200 for closing alone (and that's for inbound, not outbound).

Lead Generators get paid thousands per month to do lead generation.

Run the numbers.

If you want people that can deliver, you'll have to invest more than $200 per client.

Alright, lets say I have increased the commission to $2000 for each and every closed client?

All the risk is still on them.

Is your offer proven for them to take on that risk? Do you have social proof? Is there a set sales funnel that you have that can automatically nurture the client?

These are all things that I make sure our clients have before deciding to work with them (and help them with if they don't).

I can tell you from first hand experience that no experienced closers (or lead generators for that matter) will work commission only unless you have a proven offer, testimonials, a solid sales funnel process, etc. And that's IF they work on commission for you.

You have to understand that you're asking someone to literally do everything when it comes to generating you high ticket clients. That in itself is worth its weight in gold.

Do you have the budget to pay a retainer + commission? Because most of the time - those are the types that are actually experienced enough in generating you results.

 

[Rabby]

Hello,

I am thinking of paying a freelancer $200 for every closed client for my B2B Digital Marketing Agency.

The $200 is only a starting payment, but will be doubled after the 50th closed client.

However, it turns out there are 2 seperate parts which I thought was just 1 part. The first, to find potential leads (prospects) and secondly to close them. In which case $200 are turning out to be way less than what I first thought. Someone even had a go at me about that. They said that $200 for just closing a client is fine but the payment won't cut it for doing both tasks.

A different person told me that what I am wanting is a business development, where the following is involved: finding prospects and leads, warming them and then closing them.

What will be a reasonable payment to a freelancer for doing both - finding prospects and closing them? (a permanent position)

I am looking forward to your inputs.

Thank you in advance!

Real answer: what they are happy to accept is reasonable. Reason, in this scenario, is entirely subjective.

I know of a company that paid $200 if you found a customer, filled out applications, and closed a mortgage for them. They left the mortgage business because nobody thought their flat fee of $200 was "reasonable."

I also know a guy who owns a hotdog stand, and if you paid him $200 for every customer he found, and closed, and sold a hotdog to, he would happily burn his own hotdog stand and work for you forever.

See? It depends on the sales cycle. It depends on the person, and the work they'll have to do. It depends on cost of living and expectations too.

There is absolutely nothing wrong with $200. Sorry other posters (I like you all, but I'm saying you're wrong here). If I could sell 1,000 of something per day, do you think I would pass up a $200 commission on it. Please. That's 50,000,000 per year if I take 2 weeks vacation and don't work weekends.

So you need to evaluate the motivations of these people you're offering the commission to. You need to figure out how many of the thing they are likely to sell in a week/month/year. Design a "golden path" where they can make their finances better than they were. Sell them on that idea... help them get there... give them the opportunity and the tools to make as much as they want to make, if they're willing to work for it.

 

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[Kak]

Speaking in terms of what I like to do...

For this type of arrangement I normally offer massive profit shares and even in some cases an opportunity continue earning residual income.

The way I see it, if someone is gracious enough to win me business, I am going to make it a win for them as well.

 

[Kevin88660]

Hello,

I am thinking of paying a freelancer $200 for every closed client for my B2B Digital Marketing Agency.

The $200 is only a starting payment, but will be doubled after the 50th closed client.

However, it turns out there are 2 seperate parts which I thought was just 1 part. The first, to find potential leads (prospects) and secondly to close them. In which case $200 are turning out to be way less than what I first thought. Someone even had a go at me about that. They said that $200 for just closing a client is fine but the payment won't cut it for doing both tasks.

A different person told me that what I am wanting is a business development, where the following is involved: finding prospects and leads, warming them and then closing them.

What will be a reasonable payment to a freelancer for doing both - finding prospects and closing them? (a permanent position)

I am looking forward to your inputs.

Thank you in advance!

Not advisable for you to spend money on this, from a micro and macro perspective.

On a micro level, you want it to go full commission..unless if you are a big brand no one takes the work seriously.

On a macro level, you have to be in a space really lucrative to afford this. Company A wants make money selling a cost effective solution to company B, after deducting marketing expense to pay you and your closer...Yes I know you pay your closer but eventually the money must from the margin of what company A sells. Today’s economic environment I am not sure that’s an economic viable model. Margin isn’t that good these days And people want to keep themselves lean.

 

[ads0401]

I have 12 years experience as a freelance BD person and have been paid in a wide range of methods. Generally if the person is finding the leads and closing them the pay will be significantly higher than just hammering the phones and closing people.

Most of my commission has been in the 10-20% range of the closed deal for just closing and up to 50% if I am finding the lead and closing them. It varies industry to industry but digital marketing is a recurring fee so $200 seems on the low side if that's just a one off payment.

Hope that helps.

 

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[Fr33zerPop]

I work in explainer videos (antifreezedesign.com)
I have a former client that ended up being more of a broker, since he didn't need to provide creative input. So we worked out a deal where he gets 20% of the budget on the first job, and 10% thereafter for the next year on every project with that client.

So far, this was a win for both of us because it removed him from the creative process, gave me the client, and let him randomly get free money in the mail. I'm great at what I do in my computer-cave, so I really value people I meet that are great at making client connections, and happy to make it worth their while.

To agree with the sentiments above--everything is negotiable. It's a matter of finding the numbers that work for everyone so they feel that it's a win. Don't be afraid to suggest numbers that may not work for everyone. If anyone feels uncomfortable, then it's not a good solution. And if you can't come to an agreement, no worries. There are a million people and situations that aren't the right fit. It's not something we should wrap our personal value into-- although it's hard not to get sucked into that paradigm. We humans love to say things like, "What?! You insult me with your offer!" But that's just a misunderstanding of what's going on. Our value as people is far more than any of us could pay. We're just trying to exchange our goods and services for their money in a way where everyone feels like it was a win. If I can keep that attitude, I won't feel the common stress and fear of making the "wrong offer."

 

[SkyLake]

Real answer: what they are happy to accept is reasonable. Reason, in this scenario, is entirely subjective.

I know of a company that paid $200 if you found a customer, filled out applications, and closed a mortgage for them. They left the mortgage business because nobody thought their flat fee of $200 was "reasonable."

I also know a guy who owns a hotdog stand, and if you paid him $200 for every customer he found, and closed, and sold a hotdog to, he would happily burn his own hotdog stand and work for you forever.

See? It depends on the sales cycle. It depends on the person, and the work they'll have to do. It depends on cost of living and expectations too.

There is absolutely nothing wrong with $200. Sorry other posters (I like you all, but I'm saying you're wrong here). If I could sell 1,000 of something per day, do you think I would pass up a $200 commission on it. Please. That's 50,000,000 per year if I take 2 weeks vacation and don't work weekends.

There's everything wrong because the market rate is nowhere near that low.

In what universe do you live in where a salesperson would sell 1,000 of $200 worth of digital marketing a day?

 

[Rabby]

There's everything wrong because the market rate is nowhere near that low.

In what universe do you live in where a salesperson would sell 1,000 of $200 worth of digital marketing a day?

Same universe as you. The difference is I understand volume.

And I did say it depends on what you're selling.

If you're salty about the concept, you do business however you want.

 

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